Insurance and the Tornado, the second disaster!

   / Insurance and the Tornado, the second disaster! #1  

RSKY

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Kentucky, West of the Lakes, South of Possum Trot.
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Gonna be short and sweet on this one. Nearly all the churches destroyed in Mayfield were greatly under insured. Massively under insured. My sister's 100+ year old church building was destroyed in the tornado. It was insured for around $7 million. First estimates to rebuild were north of $30 million. Another across the road from a sister was destroyed. Insured for $700 thousand, rebuild $3 million.

You get the idea.

Some businesses were also underinsured. At least one had dropped all insurance because it was too high and was looking for another carrier. He lost everything.

Check your coverage!! Some companies get your business by undercutting competitors prices and then under insuring their client. They do this by not increasing coverage as rebuilding costs increase.

Check many carriers.

RSKY
 
   / Insurance and the Tornado, the second disaster! #2  
Rebuilding cost off the charts both labor and materials plus cleanup/environmental.

Im expecting steep increases industry wide.

Some companies do offer replacement coverage when you accept their value.

The irony is sometimes the cost to trace is far greater than the value of the finished product.

Some churches have deep.povkets to draw on from the nationwide congregation...
 
   / Insurance and the Tornado, the second disaster! #3  
I wouldn't be surprised if ins companies start including exceptions in policies to NOT cover certain materials - such as OSB. Here, 7/16 osb has gone from $8.68 to $48.99 a sheet and 1/2" is $58. Don't know how anyone can build with it.

That seems to change every week.
 
   / Insurance and the Tornado, the second disaster! #4  
No doubt on cost but I see units going out all the time do someone is buying.

Mostly foil backed OSB used for roof sheathing...
 
   / Insurance and the Tornado, the second disaster! #5  
I wouldn't be surprised if ins companies start including exceptions in policies to NOT cover certain materials - such as OSB. Here, 7/16 osb has gone from $8.68 to $48.99 a sheet and 1/2" is $58. Don't know how anyone can build with it.

That seems to change every week.
Ok, what? Your location just says "midwest" but are you sure about those prices?

7/16" OSB is $17.65 at home depot today here in Michigan.

In general, lumber is still 50-100% higher than the pre-pandemic norms, but it's not astronomical anymore, and prices are still dropping daily. People are building like crazy around here.
 
   / Insurance and the Tornado, the second disaster! #6  
^^^^^
It wasn't just lumber, either; everything went through the roof. Appliances were nearly impossible to find for a while.
Has anyone been on a new car lot lately?
 
   / Insurance and the Tornado, the second disaster! #7  
When I got home from the haul our church did to Mayfield back in December I called my insurance agent to review building replacement costs in the current materials and labor market vs what we insured for when we started the policy.
 
   / Insurance and the Tornado, the second disaster! #8  
Under-insurance and high repair costs are two current issues.

I just wrote about a third issue over in the Real Estate thread: Some large national insurors had too much exposure in California and were hit hard with the recent major fires, so they simply quit doing business here. I hope that won't happen where you are.

My old, non-code farmhouse became unacceptable to the insurance agency we've had for decades. None of the companies they represent will write insurance on a property like mine. Simplest issue, no perimeter foundation, its on short piers, normal homeowner-built construction a century ago.

The third agency I inquired with, wrote me a policy from an out of state company that seems to specialize in poor peoples junk. For the same liability insurance I had before, high-deductible fire replacement, and no theft coverage, I now pay three times what last year's coverage cost.
 
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   / Insurance and the Tornado, the second disaster! #9  
Gonna be short and sweet on this one. Nearly all the churches destroyed in Mayfield were greatly under insured. Massively under insured. My sister's 100+ year old church building was destroyed in the tornado. It was insured for around $7 million. First estimates to rebuild were north of $30 million. Another across the road from a sister was destroyed. Insured for $700 thousand, rebuild $3 million.

You get the idea.

Some businesses were also underinsured. At least one had dropped all insurance because it was too high and was looking for another carrier. He lost everything.

Check your coverage!! Some companies get your business by undercutting competitors prices and then under insuring their client. They do this by not increasing coverage as rebuilding costs increase.

Check many carriers.

RSKY
Small communities that have been destroyed by a disaster lose a lot of social equity. It's becoming clear that the communities here that were wiped out by the wildfires in 2020 will never be the same. People were left with bare dirt and mostly inadequate insurance coverage.

Even so, I think the numbers you are getting are pretty wild. At the average commercial building construction cost of $500/sf, $30 million should build 60,000 sf. Give the congregation a very generous 25 sf per occupant, that's room for 2000 people plus some unoccupied areas. Outside of a major metropolitan area, I would expect construction costs to be closer to $350/sf.
 
   / Insurance and the Tornado, the second disaster! #10  
Small communities that have been destroyed by a disaster lose a lot of social equity. It's becoming clear that the communities here that were wiped out by the wildfires in 2020 will never be the same. People were left with bare dirt and mostly inadequate insurance coverage.

Even so, I think the numbers you are getting are pretty wild. At the average commercial building construction cost of $500/sf, $30 million should build 60,000 sf. Give the congregation a very generous 25 sf per occupant, that's room for 2000 people plus some unoccupied areas. Outside of a major metropolitan area, I would expect construction costs to be closer to $350/sf.
We have no idea of what type of structure the original church he’s talking about is.

If it’s an old brick beast with hand-carved stone trim, and ornate interior carvings, etc., the replacement cost will be astronomical.
 
 
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