Advice on purchasing home insurance in US for overseas resident and level of cover
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UPDATED: Oct 7, 2011
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Insurance Question from Rushville, NE
Asked on 10/07/2011
Advice on purchasing home insurance in US for overseas resident and level of cover Hi, I really have 3 questions. I'm a New Zealand resident who owns residential rental property in Nebraska. Insurance cover has been provided for 7 years without a claim but is now increased by 40% and cover is 6 times the property value.When attempting to get insurance quotes in the US I find that two questions stop the process: my residential address in the US (I don't have one) and my social security number (I don't have one). Why is this required by so many insurance companies in the US? Also why is it necessary to cover replacement value when I wouldn't rebuild?
Answer given on October 11, 2011
Each state and each insurance company has their own rules for obtaining insurance on residential property. Since you do not live in the US, nor are you a citizen, there can be complications in obtaining insurance.Your lack of a US mailing address can pose problems for insurance companies, since they are not set up to send mail outside of the US. A resolution to the mailing address problem is to hire a local property manager to maintain the property, handle the insurance and the rents. The mailing address can be that company’s address. If the insurance company is requiring a social security number (which is not usually required by insurance companies) you may be able to use the Tax ID number of the property manager.Insurance companies require you to insure the property to its estimated replacement cost, whether or not you intend to rebuild the property. In today’s real estate market the market value could be well below the cost to rebuild, which can seem unfair. However, if the property were partially damaged, the company would be expected to pay for the repairs, and if you were allowed to underinsure the home, then the company would not be receiving the appropriate premium for the risk they are assuming.
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