my home is worth 158.800 it is payed off and i only wont to carry 95,000 insc is this poss.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 17, 2017

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Insurance Question from Grapevine, TX

Asked on 12/17/2017

my home is worth 158.800 it is payed off and i only wont to carry 95,000 insc is this poss. the 95,000 should include liability

Answer given on December 26, 2017

Even though your home has no mortgage, insurance companies do not allow you to determine the amount of insurance you will carry.  If you do not insure your home for its full replacement value, and there is a partial claim, the insurance company could end up paying the full amount of the insurance for a minor loss.

Insurance rates are based on the home being properly insured, so if they allow underinsurance the insurance company cannot accurately determine the premium to be charged for each home.  The insurance company will penalize you for underinsuring through the co insurance clause of the policy.  This clause is mathematically determined as did over should.  The amount you insured is divided by the amount that should have been carried. That sum is the percentage of insurance that was actually carried. That will be the percentage of insurance you will receive for a loss.  So if you have $50K but should have had $100k, you will only get 50% of the claim.

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