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Need advice on how much to insure my home for with a full MIL daylight basement.

I am buying a home and need to choose my Insurance coverage for the home.
The house is a rambler with a full finished daylight basement (or raised ranch).
The total square ft is 5078. The downstairs is a complete walkout and has a full 2 bedroom, 1 bath, kitchen mother in law unit, and their is also a separate studio apartment with a wetbar and full bath. The total downstairs sq feet is 2440.

Now the insurance companies I have been calling (a lot of them) are all saying since  it is a rambler with a daylight walk out basement even though it is finished the way it is only needs to calculate the insurance at 2638 sq ft for the upper floor and not the sq feet below of 2440.

Does this sound right??

I did have one company, Safeco, that quoted me the full actual sq ft (5078) for replacement costs.

Which is the right way to insure this house?
 I am now confused. I would rather over insure than underinsure. I think it should be calculated at 5078 sq feet even though it is a rambler with a walkout basement (or raised ranch). The downstairs is fully livable space. It's like having 2 rambler houses.

Thanks for your help
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May 22 2011 - Everett
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Answers (5)

Call other insurance agents. Try Geico.
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July 16 2011
Profile picture for FaithMarie
Thanks everyone.
I insured the house for the full square footage. My Insurance company also sent someone out to actually estimate the full total cost to replace the house and have it rebuilt if something were to happen.

FYI---Always check around and don't just go with the first quote from an insurance company. Insist on getting a professional to come out and do a FULL replacement value and have them check how much the materials would cost to ACTUALLY rebuild your house to what it is now.

If I didn't do the RESEARCH, my house would have been under-insured!!

So best advice I can give is RESEARCH RESEARCH RESEARCH!!

My house is now insured for 3 times the amount that was quoted by many large reputable companies!!

I now have peace of mind knowing my home is insured properly. Also I learned a lot by researching and could probably sell someone insurance now, lol.

Thanks again everyone!!
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July 15 2011

FaithMarie,

FaithMarie,

The insurance company should be using the 5078 sq/ft as the total livable space, however the above grade and below grade finishes should be valued at different replacement costs.  I don't like to give "typical" replacement cost because that is different for every home.  Lee's ballparks are a little low for the Puget Sound Area but close. 

If you want me to run a replacement value, just let me know it will take about 10 minutes!

Sincerely,
Keith

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July 15 2011

Basements are usually only $50ish a square foot to finish out, compared to $120+/foot upstairs, which is why they don't count basements when predicting the reconstruction cost of the home (in the same way as upstairs). 

The answer is located in the cost estimate software:  it will read: What is the basement square footage? (you input an answer), then it will ask what percentage is complete (you would input 100%), and then it will ask if the quality of the finish out is high (high quality, builders grade, custom, etc.).  After you input this information, it will predict the cost to finish out the full amount of that much square footage.  Then it will ask the same questions for above ground square footage, etc. to give you a full and complete estimate.  Make sure your agent is using and "MSB Cost Estimator" made by Marshall/Swift Boekh.  They are the most widely cited and used and (presumably) accurate.

Lee Lewis

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July 06 2011

Basements are priced differently then above ground living space so they will figure in the cost for the basement it will just be seperate from the main living space. My advice is to find an insurance company that meets your needs and then request a replacement cost appraisal. They will send an inspector to develop an estimated cost based on the construction and location of your home. This is paid for by the insurance company and is very routine.They have 2 different types of inspections that they do. The first is an exterior which is typically on homes under $500,000 and an interior which is both interior and exterior and usually done on homes over $500,000. Hope this helps, and congratulations on your new home.

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May 22 2011
 
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Need advice on how much to insure my home for with a full MIL daylight basement.
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