Insurance Settlement vs. Actual Property Value
If you’re a survivor of the Camp Fire, then you’ve probably already had a conversation with your insurance carrier. One lady we spoke with told us that she received a $300,000.00 settlement for her lost home and property. She proudly stated that the settlement was more than her house was worth.
She mentioned that she was as happy as a clam because, with all the cheap labor in Paradise, she was going to have money left over once she rebuilt her home.
We DEFINITELY want to discuss the issue of cheap labor in Paradise. But, before we do, we want to address the issue of rebuilding cost vs. current home value.
Apparently, the lady we spoke with has no idea what it costs to build a home. If she did, she would be angered by her insurance company’s offer. Although housing values in Paradise are quite low compared to those in the bay area, building costs in Paradise are about the same AS everywhere ELSE in Northern California.
Fact is, if you lost a home in Paradise that was worth somewhere in the neighborhood of $275,000.00, the cost to rebuild will probably be more than double. We’d guess more like $650,000.00. Yes, normally prices in Paradise would be slightly less. Unfortunately, supply demand mathematics suggest prices to rebuild in Paradise may be abnormally high. Even higher than in the Bay Area.
As far as cheap labor is concerned – FORGET IT. Again – remember – supply-demand!
Take your time settling with your insurance company. And remember, once you sign on the dotted line with a building contractor the insurance company is out of the picture. By the way, if you get left holding the bag by your contractor, you’re the one that will be stuck – not your insurance carrier.