05/17/2024
Some homeowners Insurance companies have a "Welcome to Lawrence County" shock in store for you. They will refuse to insure your home.
True story - I bought a house on Taylor Street two years ago for $45,000. I got a real bargain. Bought another, similar (age, size, condition) house in Mahoningtown this year, also $45,000. When you purchase homeowners Insurance the premium is not based on what the house cost you, but (logically) on what it will cost the Insurance Company to re-build it. I have no problem with that, because that, ultimately, is the risk the Insurance Company is taking.
The new wrinkle (at least with Auto-Owners Insurance) is that if the purchase price of the house is less than 50% of the replacement cost, they will refuse to insure. The Insurance company can twist and manipulate the calculation of the Replacement cost in any way it chooses, to drive up the replacement cost value and therefore the premium. In my case the replacement value (according to Auto Owners) of each of the houses is around $500,000. Auto Owners took the premium payment then flat cancelled both policies because I got a bargain. Since central city New Castle has many houses selling for under $250,000 and the replacement cost on just about all of them should be about equal, congratulations, New Castle, you just got Red-Lined. And you know that if one Insurance Company can get away with this, they all will.