Why do homeowner insurance policies vary so much?

Every insurance company uses some form or a "replacement cost estimator" to come up with a rebuilding value. Since this is what it would cost to replace your home, based on square footage, year built, where it is and any "extra" amentities - this is smart. The problem is that there are many versions of "replacement cost estimators" and no two come up with the same figure.

Us in the insurance world, would wish there would be a more standardized solution or at least less comparisons out there. After all, the cost to rebuild based on square footage in a certain zipcode, will not change. The year it was built and certain things like cherry wood floors would change but not the basic cost per square feet.

That is why independent insurance brokers like us use a variety of insurance companies. To re-build or replace a home could often be $100,000 to $200,000 based on who'e estimator you are using. Then the resulting premium cost vary by $400-$800 a year. So it definitely pays to shop around and get the best cost for your insurance dollars when it comes to your home.

​Tom Larsen