Who Does State Farm Use for Reconstruction Costs?

[csmith2]

Title says it all. I'm curious because in my area either they are very much undervaluing homes or my companies (most use M&S) are overvaluing them. Very often I am running across situations where my value is several hundred thousand over theirs...

 

[Biggdogg]

State Farm, and I believe most captives use Xact Value.

 

[Exdpguy]

Xcactware 360 Value is who SF uses.

 

[csmith2]

thanks guys! I actually was reading through a policy summary they sent one of my prospects yesterday and it was right there at the bottom. I did find one thing interesting in this particular case... They have this home insured for $210k and xact360 says it should be in the low $300s... My prospect was a bit surprised that State Farm was so low even compared to their own estimator, and its not like they have been in the house forever either, just about three years.

Guess now I know why State Farm reconstruct costs are so much lower than what I am getting...it seems some agents are just shooting from the hip in my area so they can get low rates and more customers...

 

[djs]

I'm guessing, but I would assume they are using the value straight out of 360. There are so many variables with that program that its easy to have pretty wild swings of reconstruction costs.

My guess is the state farm agent didn't look at the house and estimate it correctly, but did use the value of the estimator.

Dan

 

[new_agent]

It is generally accepted by sf agents to "adjust" the xactware until they get the outcome they want. This includes taking several hundred square feet off if necessary. Remember sf generally doesn't do inspections. They rely on the agent to do it.
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It is generally accepted by sf agents to "adjust" the xactware until they get the outcome they want. This includes taking several hundred square feet off if necessary. Remember sf generally doesn't do inspections. They rely on the agent to do it.

Of course all don't do this but many do.

 

[NCAgent]

You don't have to change a single thing about the house in the cost-estimator. You can leave the same square footage, number of beds, baths, etc. in there for a lot of these estimators. They have little drop-downs for "economic, average, above-average, custom, premium" where they change the RC amounts. Going from economic to premium sometimes has a 300-400k replacement cost difference.

I had a client where I heard about his house and did custom, giving 450k RC. Apparently if I did premium though it would have been around 750k (!) which is what it got changed to when he had an inspection. Very rarely does that happen (and the house was out of the ordinary) but make sure you are in the higher end of the spectrum in case things like that happen.