How to value a house destroyed in a fire?
Question Details:
My home caught fire in 04/10. The insurance adjuster said the home should be replaced. It is a 1998 double wide. The adjuster told me the value of the home is $25,000 and that's what they would pay for the home (not including contents). The taxes that I pay on my home are bsed on a valuation of $66,000 and my insurance premium has coverage on the house as actual cash value not to exceed %55,000. So if I am paying taxes on $66,000 and insurance based on $55,000, then is the $25,000 the right amount?
If the actual cash value of the double wide was $25,000, then that's what you are entitled to receive. You aren't entitled to the value of the land, because you still have the land.
Your taxes are almost certainly based on a total land-plus-building valuation. That $66,000 might not be the current market value, of the land with a 1998 double wide, because tax assessments for any given town or other taxing district are all done as of a particular date.
What I suspect happened here is that you had this home, and the insurance policy, for several years. When you first took out the policy, the home might have been worth $55,000. I suspect that a double wide loses value as it gets older, like many types of assets. Whether your insurance agent did his or her job very well, in terms of your premiums and how much coverage you really needed, is another question.
