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<blockquote data-quote="inactive" data-source="post: 2163351" data-attributes="member: 7488"><p>You can do that now, that is -deliberately under-insure any property you want. Some carriers don't like to, but you can set things up that way.</p><p></p><p>Except that, if you deliberately under-insure a home you are assuming a certain portion of the risk even if the dwelling is not a total loss. That's no bueno on a total loss. So if you have a large loss that is not a total, you are stuck with paying your pro-rata share (beyond the contracted deductible). For example, if you insure a $150k home for $100k, you are liable for 2/3s of the expense of the non total loss claim event. So a 75,000 loss will require you to pay $25,000. Usually your deductible is buried in that amount (meaning, not applicable in addition to the self-insured amount). The mortgage holder isn't very keen on their collateral being exposed to such a level under-insurance (beyond a typical deductible). The mortgage contract typically dictates the insurance you will carry. </p><p></p><p>You can skirt the insurance requirements by not having a mortgage. I don't just mean cash, but you can have home loans without them being a mortgagee on the property. My father has an installment loan on his home (it still lists the house as collateral), and it has no escrow (for tax/insurance) and no insurance requirements. He actually assumed the loan when he bought the house in the 80s. It's kind of a weird deal. But there are products out there.</p><p></p><p></p><p>We digressed through. I'm not fan of the tax assessor, but my larger point is that the tax valuation and the insured stated reconstruction costs are very distinct things.</p></blockquote><p></p>
[QUOTE="inactive, post: 2163351, member: 7488"] You can do that now, that is -deliberately under-insure any property you want. Some carriers don't like to, but you can set things up that way. Except that, if you deliberately under-insure a home you are assuming a certain portion of the risk even if the dwelling is not a total loss. That's no bueno on a total loss. So if you have a large loss that is not a total, you are stuck with paying your pro-rata share (beyond the contracted deductible). For example, if you insure a $150k home for $100k, you are liable for 2/3s of the expense of the non total loss claim event. So a 75,000 loss will require you to pay $25,000. Usually your deductible is buried in that amount (meaning, not applicable in addition to the self-insured amount). The mortgage holder isn't very keen on their collateral being exposed to such a level under-insurance (beyond a typical deductible). The mortgage contract typically dictates the insurance you will carry. You can skirt the insurance requirements by not having a mortgage. I don't just mean cash, but you can have home loans without them being a mortgagee on the property. My father has an installment loan on his home (it still lists the house as collateral), and it has no escrow (for tax/insurance) and no insurance requirements. He actually assumed the loan when he bought the house in the 80s. It's kind of a weird deal. But there are products out there. We digressed through. I'm not fan of the tax assessor, but my larger point is that the tax valuation and the insured stated reconstruction costs are very distinct things. [/QUOTE]
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