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Comment by secabeen | Hacker News Reader

Are there any California HO providers that still offer Guaranteed Replacement? I had it at one point with AAA, but they jacked rates on me, and it got too expensive. I'd like to get it again, but haven't been able to find it.

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Typically Guaranteed replacement is offered by HNW providers such as PURE, AIG, and Chubb. Travelers might do so too. It's hard to find though, so talking to an insurance broker that can access those specialist markets (i.e. they do not sell online) might be your best shot. Also, most insurers will offer some kind of Extended Replacement Cost which pretty much does the job too.

Interesting development though is in CA, insurers are legally required to recommend you a replacement cost coverage amount that is adequate for your place. That probably has a lot to do with the changes you've seen on "guaranteeing" something vs just recommending.

Yeah, the HNW policies are also stupid expensive. AAA was the only provider for normal people I found that still offered it. Extended replacement cost theoretically does the job, but in coastal california, we're already looking at rebuild costs in the $300+/sqft level. Add in the cost increase from labor shortages, and I could see it spiking significantly above that. (Looking at my policy, I see the Extended Replacement providing 30% more than baseline, and 80% more than baseline for FEMA declared disaster, which I suppose is probably enough. I still prefer reasonably priced Guaranteed replacement, as that pushes all that risk on to the insurer, rather than requiring me to guess what the rebuild cost of my home will be).

I did run your automated advice system with my recent policy renewal. Reporting was pretty good, although I was surprised that you consider a $3000 deductible "abnormally high". I don't think it's worth trading money with the insurance company as premiums to cover small stuff like that. Not everyone shares my feelings, though.

Yes, you're right - "abnormal" is a bit in the eye of the beholder. It would have been a relative assessment - a 3k deductible is much more than most people carry (even HNW, an area I've worked in before).

On guessing rebuild, in CA you shouldn't have to guess, as it's the insurer's legal requirement to recommend something accurate, and the DOI supports the consumer there. Generally those increases will do the job on like-for-like replacement - the big problem is if your Building limit has not been reviewed for years, as they get out of date.

Guaranteed is definitely expensive since it has cost insurers some big claim headaches, so not surprised it's even harder to find now as some insurers are hurting after all the fires.

Ahh, good to know that the DOI has some teeth on the accuracy of the recommendations. That makes me more comfortable to take the extended replacement. Still frustrated that I can't just sell that risk to an insurer. After all if GR has caused big claim headaches in the past, and ER wouldn't have had those headaches, wouldn't that be to the customer's benefit to have GR?

The headaches as I understand it are mathematical really - without a limit to cap costs, outliers have the potential to completely mess up the pricing. Anything where one claim could destroy the predictability of results is hard. So only a few wildly inaccurately priced GRs can take down a whole book - hence capping. If you aren't likely to have outliers, you don't need limits, and some HNW insurers are removing limits entirely since they just price accordingly.

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