Guaranteed Replacement Cost for HO3

[sankykid]

Does anybody know of a California HO3 carrier that will write the dwelling on a Guaranteed Replacement Cost basis?

[LadyBroker]

I don't think the word Guaranteed is used anymore, not since the Oakland fires. You can get Extended Replacement Cost, though, from everyone.

[gregcw]

Does anybody know of a California HO3 carrier that will write the dwelling on a Guaranteed Replacement Cost basis?

I'm not in California but in Oregon both MET P&C and Allied will write the true 'Guaranteed Replacement cost coverage MET P&C calls it "COV A Plus" and Allied calls it "Uncapped"

I don't think the word Guaranteed is used anymore, not since the Oakland fires. You can get Extended Replacement Cost, though, from everyone.

There are a few companies that do still offer a true "Guaranteed Replacement Cost" but most are offering only "Extended", "Expanded" or "Enhanced" Replacement Cost. The name and coverage varies by company with coverage ranging as 120%, 125% or 150% above the policy limit. Some companies are offering only Replacement Cost up to the policy limits with no other options.

Also, in the Oakland fires, wasn't it the California DOI that determined that everyone had 'Guaranteed Replacement Cost on their policies whether it was offered or not or even if it was and they chose to not purchase it?

[LadyBroker]

GregCW -- I believe you are correct that the CA DOI decided everyone was getting Guaranteed Replacement cost...even those that had always had only Basic Form coverage. I love how everyone wants Nordstrom coverage for the K-Mart price, and then complains about the quaiity of their insurance at time of loss. Have a great day!

[d's insurance store]

In response to 'Lady Broker'...if you go back in time to what I'll call the freewheeling California homeowner's market prior to the Oakland Fire, I think a closer look will reveal a great deal of complicity and bad underwriting practices from ALL sides in the property market equasion.

I remember those days as a captive agent for one of the big three, where top and bottom line sales were the measured benchmarks and proper underwriting took a very back seat to basic insurance concepts. There was enough stupidity and bending of rules to go around to all interested parties.

First, you had companies who had never suffered a California loss of this magnitude in an urban area, who were using bad, outdated cost estimators to come up with Coverage A limits. You had agents and consumers, ever conscious of the final rate quote who manipulated the cost estimators to 'win' quotes and keep the sales managers happy. Nobody cared because the unlimited cap would take up any slack in coverage...and besides, who ever heard of an urban wild fire anyway.

The marketplace at that time did not demand unlimited coverage...it was introduced as a marketing tool to differentiate one company from another until every company offered it. The original concept went back to the 70's years of ultra high inflation where policy limits could be overtaken within a policy year due to building cost inflation and the lifting of the coverage cap was seen as a good practice to avoid being underinsured.

It was not so much a case of consumers wanting "Nordstom Coverage' at a 'K Mart' price...it was just what everyone was offering and consumers and agents were taking advantage of. It was pure, plain and simple industry greed with the carriers choosing to turn a blind eye to good underwriting in the interest of bigger market share. I remember being encouraged to use the faulty cost estimator as a selling tool, telling prospects that the current carrier was ripping them off by over insuring their dwelling, and my company's tool was as accurate as it needed to be, and there was no coverage gap because of the unlimited replacement cost guarantee.

So, please don't blame the victim's here...I view this as a case of seeing the enemy and it was us...

[sankykid]

AAA writes Guaranteed Replacement Cost in California under their YourHome Advantage program, unfortunately as an independent agent I cannot write AAA. California Capital and Century National do offer 200% RC which, as an independent, is the closest to Guaranteed RC I can find.