Posted On: November 4, 2008, 2:33 pm CST

Posted By: DB

As a direct writer I cannot arbitrarily lower the replacement cost on a policy to reflect an amount less than the estimated RC given by Marshall/Swift/Boeckh. The only way to lower the RC is to have the insured fill out and sign a RC worksheet showing their justification for desiring to reduce the coverage. Once they do that the onus is entirely on them in the event of a loss that results in an underinsured claim.

2 years ago we were constrantly bombarded with insured's saying we were underinsuring their home. they were basing that statement on the market value of the house and not the RC. Now it is the opposite. I have found that simply explaining the difference between RC and MV in 99% of the cases solves the problem. The answer is in communicating with your insured's on a regular basis and not only after a claim is filed.