Insurance and the Tornado, the second disaster!

[RSKY]

Gonna be short and sweet on this one. Nearly all the churches destroyed in Mayfield were greatly under insured. Massively under insured. My sister's 100+ year old church building was destroyed in the tornado. It was insured for around $7 million. First estimates to rebuild were north of $30 million. Another across the road from a sister was destroyed. Insured for $700 thousand, rebuild $3 million.

You get the idea.

Some businesses were also underinsured. At least one had dropped all insurance because it was too high and was looking for another carrier. He lost everything.

Check your coverage!! Some companies get your business by undercutting competitors prices and then under insuring their client. They do this by not increasing coverage as rebuilding costs increase.

Check many carriers.

RSKY

 

[ultrarunner]

Rebuilding cost off the charts both labor and materials plus cleanup/environmental.

Im expecting steep increases industry wide.

Some companies do offer replacement coverage when you accept their value.

The irony is sometimes the cost to trace is far greater than the value of the finished product.

Some churches have deep.povkets to draw on from the nationwide congregation...

 

[ljjhouser]

I wouldn't be surprised if ins companies start including exceptions in policies to NOT cover certain materials - such as OSB. Here, 7/16 osb has gone from $8.68 to $48.99 a sheet and 1/2" is $58. Don't know how anyone can build with it.

That seems to change every week.

 

[ultrarunner]

No doubt on cost but I see units going out all the time do someone is buying.

Mostly foil backed OSB used for roof sheathing...

 

[deezler]

I wouldn't be surprised if ins companies start including exceptions in policies to NOT cover certain materials - such as OSB. Here, 7/16 osb has gone from $8.68 to $48.99 a sheet and 1/2" is $58. Don't know how anyone can build with it.

That seems to change every week.

Ok, what? Your location just says "midwest" but are you sure about those prices?

7/16" OSB is $17.65 at home depot today here in Michigan.

In general, lumber is still 50-100% higher than the pre-pandemic norms, but it's not astronomical anymore, and prices are still dropping daily. People are building like crazy around here.

 

[Jstpssng]

^^^^^
It wasn't just lumber, either; everything went through the roof. Appliances were nearly impossible to find for a while.
Has anyone been on a new car lot lately?

 

[Birdhunter1]

When I got home from the haul our church did to Mayfield back in December I called my insurance agent to review building replacement costs in the current materials and labor market vs what we insured for when we started the policy.

 

[California]

Under-insurance and high repair costs are two current issues.

I just wrote about a third issue over in the Real Estate thread: Some large national insurors had too much exposure in California and were hit hard with the recent major fires, so they simply quit doing business here. I hope that won't happen where you are.

My old, non-code farmhouse became unacceptable to the insurance agency we've had for decades. None of the companies they represent will write insurance on a property like mine. Simplest issue, no perimeter foundation, its on short piers, normal homeowner-built construction a century ago.

The third agency I inquired with, wrote me a policy from an out of state company that seems to specialize in poor peoples junk. For the same liability insurance I had before, high-deductible fire replacement, and no theft coverage, I now pay three times what last year's coverage cost.

 

[Larry Caldwell]

Gonna be short and sweet on this one. Nearly all the churches destroyed in Mayfield were greatly under insured. Massively under insured. My sister's 100+ year old church building was destroyed in the tornado. It was insured for around $7 million. First estimates to rebuild were north of $30 million. Another across the road from a sister was destroyed. Insured for $700 thousand, rebuild $3 million.

You get the idea.

Some businesses were also underinsured. At least one had dropped all insurance because it was too high and was looking for another carrier. He lost everything.

Check your coverage!! Some companies get your business by undercutting competitors prices and then under insuring their client. They do this by not increasing coverage as rebuilding costs increase.

Check many carriers.

RSKY

Small communities that have been destroyed by a disaster lose a lot of social equity. It's becoming clear that the communities here that were wiped out by the wildfires in 2020 will never be the same. People were left with bare dirt and mostly inadequate insurance coverage.

Even so, I think the numbers you are getting are pretty wild. At the average commercial building construction cost of $500/sf, $30 million should build 60,000 sf. Give the congregation a very generous 25 sf per occupant, that's room for 2000 people plus some unoccupied areas. Outside of a major metropolitan area, I would expect construction costs to be closer to $350/sf.

 

[MossRoad]

Small communities that have been destroyed by a disaster lose a lot of social equity. It's becoming clear that the communities here that were wiped out by the wildfires in 2020 will never be the same. People were left with bare dirt and mostly inadequate insurance coverage.

Even so, I think the numbers you are getting are pretty wild. At the average commercial building construction cost of $500/sf, $30 million should build 60,000 sf. Give the congregation a very generous 25 sf per occupant, that's room for 2000 people plus some unoccupied areas. Outside of a major metropolitan area, I would expect construction costs to be closer to $350/sf.

We have no idea of what type of structure the original church he’s talking about is.

If it’s an old brick beast with hand-carved stone trim, and ornate interior carvings, etc., the replacement cost will be astronomical.

 

[MossRoad]

Gonna be short and sweet on this one. Nearly all the churches destroyed in Mayfield were greatly under insured. Massively under insured. My sister's 100+ year old church building was destroyed in the tornado. It was insured for around $7 million. First estimates to rebuild were north of $30 million. Another across the road from a sister was destroyed. Insured for $700 thousand, rebuild $3 million.

You get the idea.

Some businesses were also underinsured. At least one had dropped all insurance because it was too high and was looking for another carrier. He lost everything.

Check your coverage!! Some companies get your business by undercutting competitors prices and then under insuring their client. They do this by not increasing coverage as rebuilding costs increase.

Check many carriers.

RSKY

RSKY,
thanks for the updates, and the warning/advice. Many of us think we just looked at numbers a few years ago and it’s 15-20!

Any pictures of what the church looked like before? Or an address and maybe we can get a street view?

 

[Alan W.]

As a trustee for our church I had the insurance company come out last year and we went over all the property, vehicles and buildings. Did the same for my home and property.
Ended up basically redoing the entire policy.
Time does slip by. Its easy to get outdated on coverage.

 

[MinnesotaEric]

Gonna be short and sweet on this one. Nearly all the churches destroyed in Mayfield were greatly under insured. Massively under insured. My sister's 100+ year old church building was destroyed in the tornado. It was insured for around $7 million. First estimates to rebuild were north of $30 million. Another across the road from a sister was destroyed. Insured for $700 thousand, rebuild $3 million.

You get the idea.

Some businesses were also underinsured. At least one had dropped all insurance because it was too high and was looking for another carrier. He lost everything.

Check your coverage!! Some companies get your business by undercutting competitors prices and then under insuring their client. They do this by not increasing coverage as rebuilding costs increase.

Check many carriers.

RSKY

You can build huge, ugly steel pole barns for that money, install a mezzanine level in the sanctuary, have offices, and whatever else, but it will be an ugly building.

 

[Larry Caldwell]

We have no idea of what type of structure the original church he’s talking about is.

If it’s an old brick beast with hand-carved stone trim, and ornate interior carvings, etc., the replacement cost will be astronomical.

That's a product of another century. I doubt any destroyed houses get rebuilt with fish scale siding. If you want a church, build a church. If you want a museum, build a museum.

 

[Larry Caldwell]

You can build huge, ugly steel pole barns for that money, install a mezzanine level in the sanctuary, have offices, and whatever else, but it will be an ugly building.

For the money they are talking, they had a church, a school with a gymnasium and hardwood floors, and a six manual pipe organ.

 

[MossRoad]

That's a product of another century. I doubt any destroyed houses get rebuilt with fish scale siding. If you want a church, build a church. If you want a museum, build a museum.

I know a few people that would disagree with you on restorations. Fastest, most obvious examples are historic districts, where the homes are required to be restored to their original appearance.

 

[coldsteelva]

In some of these instances...assuming no mortgages - would it not be better to look at self-insuring for structure rather than paying out crazy premiums for the just in case event? Liability insurance is totally separate and needs to be paid for.

 

[California]

In some of these instances...assuming no mortgages - would it not be better to look at self-insuring for structure rather than paying out crazy premiums for the just in case event? Liability insurance is totally separate and needs to be paid for.

I discussed under-insuring, with the agent I finally found who would take this old non-compliant farmhouse.

He pointed out that replacement cost would also require several expensive building permits. Because no building permits have ever been issued for this property, it would need a whole new conforming septic system, likely similar testing and possible upgrade for the well and water system (PVC water mains are no longer acceptable), a soil test expert to discover and remove the abandoned underground fuel tank nearly certain to exist on every old farm in the region. There are several huge redwood trees close to the buildings, a danger in earthquake country and a fire hazard. So they would have to be removed or else the new building sited away from them using up part of the apple orchard. A neighbor got bids over $30k for similar tree removal. My property tax would increase drastically.

I decided to insure for what I estimated rebuilding the structure would cost, not for what it would cost to build a modern home that is typical for the area. In case of disaster I would likely just replace with a double-wide to stay within budget. This orchard farmhouse isn't our primary home, that's in town over in the Central Valley.

Liability insurance is the big issue. It would be foolish to cheapskate that. Or worse, to have no one to represent you in case of a claim.

 

[RSKY]

The pipe organ was separately insured for 1.5 million. Many stained glass windows. Front and sides were huge stone blocks about 4’ long and 2’ high. Don’t know if you could ever get replacements. Beautiful old church inside and out.

 

[ultrarunner]

I discussed under-insuring, with the agent I finally found who would take this old non-compliant farmhouse.

He pointed out that replacement cost would also require several expensive building permits. Because no building permits have ever been issued for this property, it would need a whole new conforming septic system, likely similar testing and possible upgrade for the well and water system (PVC water mains are no longer acceptable), a soil test expert to discover and remove the abandoned underground fuel tank nearly certain to exist on every old farm in the region. There are several huge redwood trees close to the buildings, a danger in earthquake country and a fire hazard. So they would have to be removed or else the new building sited away from them using up part of the apple orchard. A neighbor got bids over $30k for similar tree removal. My property tax would increase drastically.

I decided to insure for what I estimated rebuilding the structure would cost, not for what it would cost to build a modern home that is typical for the area. In case of disaster I would likely just replace with a double-wide to stay within budget. This orchard farmhouse isn't our primary home, that's in town over in the Central Valley.

Liability insurance is the big issue. It would be foolish to cheapskate that. Or worse, to have no one to represent you in case of a claim.

I've thought about it too when I was having trouble on a well built 1990's home...

Insurance simply said I was less than two miles from the vast East Bay Regional Park system.

It matter not that between me and the park is a Fire House plus three more within 2 miles, or that I have upgraded high pressure city fire hydrant on my property or clay tile roof, triple pane windows, no exploded wood construction, boxed eves and fully fire sprinklered...

In the end CSAA auto club came through...