1. Property Module IV Replacement Cost Determination

2. Dwelling Replacement Cost Guide Review Module IV
Module IV Objectives
Review Module III
Dwelling Replacement Cost Guide
Review Module IV
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3. Review Module III
Q: How many losses can a prospective insured have to be eligible for coverage in FIE?
A: No losses in the past three years of any kind.
Q: How many losses can a prospective insured have to be eligible for coverage in Protector Plus?
A: The insured must have had no losses in the past three years.
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4. Review Module III
Q: Can you write Renters policies in the Galveston and
Brazoria counties?
A: Yes, HO-BT policies do not cover the dwelling.
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5. TENANT HOMEOWNERS PACKAGE
Review Module III
TENANT HOMEOWNERS PACKAGE
Special Requirements:
Minimum ___% deductible Loss Deductible Clause No. 3.
Mandatory minimum of $____ Theft Deductible also required on amounts of insurance of $20,000 up to $________.
Replacement Cost Coverage (HO-101) can be written if the policy is written for at least $__________ Contents Coverage.
Scheduled Personal Property (HO-160) may be written in conjunction with an HO-BT.
Maximum limit single item: $________
Maximum aggregate total: $________ 1
250
25,000
25,000
2,500
10,000
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6. Dwelling Replacement Cost Estimation Guide
Proper insurance to value is one of the most important considerations in insuring property. The insured needs to be properly protected. In addition, rates are based on the assumption that each exposure will be properly insured to replacement cost. If not, the premium developed will be inadequate and create the need for rate levels which may adversely affect our competitive position.
To properly protect our policyholders and our competitive position, always encourage the policyholders to carry an amount of coverage adequate to pay for the complete rebuilding of the home and to replace the personal property. The Dwelling Replacement Cost Estimation Guide is designed to determine the minimum replacement cost of a dwelling.
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7. Select the type of dwelling that most nearly fits the description.
Dwelling Replacement Cost Estimation Guide
Step 1 -
Select the type of dwelling that most nearly fits the description.
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8. Dwelling Replacement Cost Estimation Guide Dwelling Type: One Story
Single floor, usually at grade level.
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9. Dwelling Replacement Cost Estimation Guide
Dwelling Type: 1 1/2 Story
Two floors, one grade level and one above. Upper floor may have full ceiling heights. Bedrooms at upper level. Number of square feet of upper level living area is 40% to 70% of living area of lower level.
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10. Dwelling Replacement Cost Estimation Guide Dwelling Type: Two Story
Two floors, both having full ceiling heights. Bedrooms at upper level. Number of square feet of upper level living area is greater than 70% of living area of lower level.
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11. Dwelling Replacement Cost Estimation Guide
Dwelling Type: Bi-level/Raised Ranch
Two floors. One usually four feet below grade level and the other one four feet above grade level. May be set on slight sloping terrain. If a garage is built-in, it generally would be located in the lower of the dwelling.
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12. Dwelling Replacement Cost Estimation Guide
Dwelling Type: Split level (Tri-level)
Usually having three separate levels and distinct living areas separated by different floor elevations. Grade level has foyer, family, and powder room. Second level has living, dining and kitchen. Third level has bedrooms.
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13. Dwelling Replacement Cost Estimation Guide
Dwelling Type: Town House or Row House
Two or more single-family dwellings connected by a common sidewall. Usually two or three story with the kitchen and living areas on the lower level and bedrooms on the upper floors.
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14. Dwelling Replacement Cost Estimation Guide
Dwelling Type: Duplex
Two-family house. Contains two separate single-family units in one dwelling. Each unit contains its own plumbing, electrical, baths, and kitchen -two of everything. Connected by a common sidewall - may have one or more floors.
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15. Calculate the Floor Area
Dwelling Replacement Cost Estimation Guide
Step 2 -
Calculate the Floor Area
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16. Dwelling Replacement Cost Estimation Guide
Measure the TOTAL FLOOR SQUARE FOOT AREA. The dimensions of basement, attached garage, porch, etc., must be noted but not included in the TOTAL floor calculation. Exceptions:
1. Residences are calculated on the total floor square foot area, including built-in garages. Deduct the cost of the built-in garage.
2. Bi-level residences must include the total lower level area including the basement garage.
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17. Dwelling Replacement Cost Estimation Guide
Calculation example: TOTAL square foot area
Dwelling at (40’ X 25’) = 1,000 s.f. X 2 levels = 2,000 s.f.
The costs of the items listed below are given in the “Additional Features” section of this manual:
Garage: 2 car attached.
Porch: 20’ X 8’ = 160 square feet.
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18. Step 3 - Dwelling Replacement Cost Estimation Guide
Select the kind of exterior construction that most nearly fits the definition.
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19. Dwelling Replacement Cost Estimation Guide
Class “A”
Masonry Block, Painted - An 8” concrete block wall, painted on the exterior.
Stucco on Frame - Stucco applied over wire and paper or solid sheathing.
Stucco on Masonry - Stucco applied over a masonry block wall.
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20. Dwelling Replacement Cost Estimation Guide
Class “B”
Aluminum Siding or Vinyl Siding - Lap or bevel aluminum or vinyl-coated siding laid either horizontally or vertically over the exterior wall.
Asbestos Shingles - Asbestos shingles laid over a wood frame wall.
Wood Siding - Lap or bevel wood siding laid either horizontally or vertically over the exterior wall.
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21. Dwelling Replacement Cost Estimation Guide
Class “C”
Adobe Brick -Solid - A soft brick formed from local clay, rough in shape and texture.
Wood Shakes - Wood shakes laid in overlapping layers on the exterior wood frame.
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22. Dwelling Replacement Cost Estimation Guide
Class “D”
Brick Veneer - Face brick attached to a frame structure using corrugated clips. The brick provides ornamentation only and provides no structural support for the building.
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23. Dwelling Replacement Cost Estimation Guide
Class “E”
Solid Brick - Solid brick wall, typically two rows thick with each row grouted together, with face brick.
Stone Veneer - Stone attached to a frame structure using corrugated clips. The stone provides ornamentation only and provides no structural support for the building. .
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24. Dwelling Replacement Cost Estimation Guide
Class “F”
Solid Stone - Solid stone wall with stone facing.
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25. Interior Finish Adjustment
Dwelling Replacement Cost Estimation Guide
Step - 6
Interior Finish Adjustment
The base cost in Step 4 contain the following finishes depending on the living area of the home.
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26. Dwelling Replacement Cost Estimation Guide
Refer to page 2046 for the Interior Finish Adjustment.
Option 1 = Walls: 100% paint
Floors: 95% carpet, 5% vinyl
Option 2 = Walls: 75% paint, 25% paper
Floors: 90% carpet, 5% vinyl, 5% tile
Option 3 = Walls: 50% paint, 25% paper, 20% panel, 5% tile
Floors: 50% carpet, 10% tile, 40% parquet
Option 4 = Walls: 35% paint, 30% panel, 10% tile, 25% grass cloth
Floors: 40% carpet, 15% tiel, 40% parquet, 5% slate
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27. Calculate Additional Features
Dwelling Replacement Cost Estimation Guide
Step - 7
Calculate Additional Features
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28. Dwelling Replacement Cost Estimation Guide
To the “Base Cost” developed in Step 5, add or deduct the costs for:
Bathrooms
Garage or Carport
Fireplace
Porch
Breezeway
Decks
Central Air Conditioning
Basement
Other Miscellaneous Features such as:
Alarms
Garage Door Opener
Jacuzzi/Hot tub etc..
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29. Dwelling Replacement Cost Estimation Guide
Calculate an estimated Replacement
Cost of a Dwelling using the
Estimated Replacement Cost Computerized System
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30. High Value Dwelling Replacement Cost
Dwelling Replacement Cost Estimation Guide
High Value Dwelling Replacement Cost
NOTE: High value homes include many features that are not standard in mainstreet home construction. The High Value Dwelling Replacement Guide is used for dwellings 3,500 square feet or more and generate a replacement cost between $300,000 to $750,000.
Homes submitted over $750,000 should be supported by a current replacement cost appraisal or a detailed contractor’s estimate of replacement cost.
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31. Q: List the eight essential steps to determine the estimated
Review
Q: List the eight essential steps to determine the estimated
replacement cost of a dwelling:
A: 1. Determine the Dwelling Type
2. Calculate the Floor Area
3. Determine the type of Exterior Wall
4. Calculate the Roofing-Type Adjustment
5. Determine the Interior Finish Adjustment
6. Calculate Additional Features
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32. Review
Determine the estimated Replacement Cost for the following dwelling:
Dwelling Type: 2 story Private Dwelling
Total Floor Area: 2,640
Exterior Wall Type: 80% brick veneer, 20% wood frame
Year Built: 1978
Roofing: Asphalt Shingle
Interior Finish: Option 2
Additional Features: 2 1/2 baths
2 Car Garage
Open Breezeway
Deck
Zip Code:
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33. Quote of the day..
“In business, the competition will bite you if you keep running; if you stand still,
they will swallow you.”
Semon Knudsen
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