insurance

I heard a discussion today on the radio about insurance. It was pointing out how home(condos,townhouses,single family,etc) values have dropped drastically and that we shouldn't be paying the same price for insurance as we have in the past. We could all save money for our associations,and on our property. Has anyone had theirs lowered?
Do you have to get the property appraiser to change the value of your home first?
What do you think?
Barbara

I have annually reviewed our clients portfolio with their agent. I use a network of several brokers, all of whom bid for the properties on an on-going basis. In my first year, after replacing an asphalt roof with a stone-coated steel roof, we were able to put the insurance out to bid and received a savings of $15,000.00. Those fund then were used to help pay for steel garage doors. Since that time, our insurance was $29,000.00 in 1999 and today our policy is $33,000.00 with an additional unbrella policy of $2,000,000.00. All associations should put the insurance out to bid on a regular basis. To always hope that your single agent, whom you've had for a bazillion years, is going to get you a good deal is badly mistaken. Agents are paid on commision. If you let them, they will go for the ususal annual increase of three (3) to six (6) percent!!!

As a former BOD member (treasurer), I once said to our former agent: I've paid for your children. I've paid for your children's college education. I've paid for your children's weddings. I am not going to pay for your grand-children, nor am I going to pay for your retirement!!! needless to say, he didn't like that. The association likes the additional $15,000.00 over five years that's a lot of painting!!!

Value certainly matters, though the prime movers of premiums in a given area are frequencies and severities - the former being how often losses occur, the latter how bad (costly) losses tend to be. FL was hit with a double whammy via hurricanes, which led to the current severe tightening of the market. The drop in home prices has little influence on actuarial determinations.

It's not about value (market, real estate, land values etc)! It's all about "Sticks and Bricks" and what it would cost to replace/rebuild the structure. Insurance companies typically use Boeck or Marshall/Swift in order to calculate the cost of rebuilding the structure. Work with your agent in order to calculate the Replacement cost. With the inflation index guide that is usually setup on most homeowner policies, the dwelling cost can get out of control after many years; so it's a good idea to review this. However, just because the market value has dropped significantly, that doesn't mean that the replacment cost has dropped. The dwelling/structure cover should still based on what it would cost to have a contractor rebuild the dwelling.