After the hurricane and having claims denied already, I’m now questioning my policy details. My policy says the purchase price was $350,000, but I actually bought the home for $199,000.
Shouldn’t this have been caught during underwriting? And who’s at fault here—me, the insurance agent, Citizens, or my lender?
Just to clarify a few things:
Did you file a claim, and if so, was it denied? If denied, what reasons did they give?
Usually, homes are insured based on replacement cost, not purchase price, so the amount you bought it for doesn’t always match the insured amount.
@Avery
Yes, my claim was denied by Citizens, and they said it was due to storm surge.
What’s throwing me off is the listed purchase price of $350,000. I paid $199,000, but the replacement cost is set at $137,000, while the purchase price is shown as $350,000.
@Dakota
Yeah, storm surge usually isn’t covered by homeowners insurance, so that denial makes sense.
The purchase price on the policy might not be that important. It’s more critical to confirm that the replacement cost of $137K would cover a rebuild if you faced a total loss.
@Avery
Exactly. The listed purchase price doesn’t impact your premium. They could put any number there, and it wouldn’t change anything.
Are you saying they actually sent a document that says ‘purchase price $350k,’ or are they estimating the rebuild cost at that amount?
Jony said:
Are you saying they actually sent a document that says ‘purchase price $350k,’ or are they estimating the rebuild cost at that amount?
It’s written as:
Purchase Price: $350,000
Actual Purchase Price: $199,000
Replacement Cost: $137,000
Insurers don’t really focus on the home’s value—it’s all about what it would cost to rebuild.
The $350,000 might be the dwelling coverage amount, which reflects the rebuild cost.
Did they deny you because of flooding, or was your damage under the deductible?
Just guessing, but the claim was probably denied due to flood reasons. Being ‘overinsured’ isn’t typically a problem in hurricane claims.
In the end, the listed purchase price doesn’t change much—they were going to deny it anyway since you filed for flood damage on a homeowners policy.