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Does home owner insurance premium only go up?
Old 06-03-2019, 12:28 PM   #1
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Does home owner insurance premium only go up?

My house sits very close to the last southern California fire zone. It got to about 10 blocks away. We received cellphone alerts to evacuate, but we were safe. We could see the fire from the closest hills and smoke all around.

My premium was due recently and saw 20% increase this year. The explanation was there were more claims in our area which caused the premium to increase.

So, once premium increased, will it simply keep going up year after year or once claims reduced, we might see some reduction of premium?
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Old 06-03-2019, 12:49 PM   #2
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Will be surprised if it goes down, even though your thoughts are logical.
I never see my car insurance go down, even as the cars got older, with the explanation being that the medical costs keep going up.
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Old 06-03-2019, 01:06 PM   #3
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..... or once claims reduced, we might see some reduction of premium?
ha ha ha ha ha.... good joke..
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Old 06-03-2019, 01:11 PM   #4
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I'm sure it depends on the carrier, but we have experienced both car insurance going down and the HO insurance doing down, albeit after several years of 20% increases on each. We have one carrier for all of our coverage, and the decrease in auto and home were several years apart.

In our case, we had several years of hail, tornadoes, and hurricanes devastating the state, so we think they decreased rates after a few years of having plenty of money to cover claims.

So, it could happen, but I wouldn't hold my breath.

Also, the decrease was nowhere near back to where it was, but it was a nice surprise to pay less after many years of those double-digit increases.
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Old 06-03-2019, 02:11 PM   #5
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Homeowners insurance companies have been hit hard by flooding, hurricanes and now the fires in CA. So I've been told. Also, the cost of rebuild and repairs has gone up due to a hot market for people who can frame a house, lay roof tiles, attach drywall, and install plumbing and electrical lines. Again, that is what I have been told.
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Old 06-03-2019, 02:29 PM   #6
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Homeowners insurance companies have been hit hard by flooding, hurricanes and now the fires in CA. So I've been told. Also, the cost of rebuild and repairs has gone up due to a hot market for people who can frame a house, lay roof tiles, attach drywall, and install plumbing and electrical lines. Again, that is what I have been told.
I believe this is the crux of the matter. And not only home rebuilding costs, but all those sophisticated new systems in our cars that we like so much are very expensive to repair or replace.

I have all my insurance with one company (USAA) and I can count on the fingers of one hand the number of times my premiums have decreased over the last 50 years.

But in fairness, my total car and home insurance premium is still less than 1% of the value of the assets, so I don't see any reason to complain.
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Old 06-03-2019, 03:38 PM   #7
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If you want your premiums to go down, you have to be proactive. Shop your insurance every year and don't be afraid to move to a new, lower priced company. Every company will pay the claim, some faster and some slower. The state Insurance commissioner makes sure they pay along with pressure from social media. Those that complain of rates, and never shop around are the type of people Insurance companies love. I am retired from a property and casualty Insurance company which does give some insight into the way rates are established and maintained. There is no advantage in most cases to being with a company for 30 years.
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Old 06-03-2019, 04:02 PM   #8
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I've had car insurance go down over the years, mainly because as I get older, I guess they figure I'm a better risk. I guess when I get TOO old though, that risk might go back up. I also had it drop when I moved to a less populated county...lower claims rate area, I guess?


I don't think I've ever had homeowner's insurance go down, though.
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Old 06-03-2019, 05:46 PM   #9
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I've had car insurance go down over the years, mainly because as I get older, I guess they figure I'm a better risk. I guess when I get TOO old though, that risk might go back up. I also had it drop when I moved to a less populated county...lower claims rate area, I guess?
Your car also gets older so the potential damage is less, this lowering your premiums for Comprehensive and Collision.

I'd budgeted for a 10% increase in my insurance this year and hoped I'd be overstating it- unfortunately, it came in at just that for Auto, HO and Umbrella. I live in Tornado Alley, which doesn't help.
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Old 06-03-2019, 05:48 PM   #10
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Every now and then, insurance companies change their actuarial tables, their community ratings and so on. It's possible if you have been re-rated into a lower risk group (maybe on the edge of a higher risk zone with the boundaries changed).

Construction costs are going up pretty rapidly, which may be the main driver of increases.
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Old 06-03-2019, 07:49 PM   #11
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I've heard that long-term customers may be labeled as folks whose rates can be more easily raised since it is unlikely they will shop around for better insurance deals. Also, in some states one's credit score can be used as part of the insurance rating.
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Old 06-03-2019, 08:08 PM   #12
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Mine went down by about 10 bucks. I live in Florida where rates only increase and I just settled a large claim. Go figure.
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Old 06-03-2019, 11:14 PM   #13
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same house, no changes to coverage amts or deductions.

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Old 06-04-2019, 04:07 AM   #14
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Ins. rates are based state to state. Even though we are 400 miles from the Gulf Coast, we also pay high premiums to pay for hurricanes that come through every 10-15:years and don't affect us. By the time a hurricane comes in, losses are already paid for.

What gets me is ins. companies offering teaser rates to get your business. Look up in 5 years and premiums are based for.replacement values twice what the house is worth on the retail market. If there was a total loss and I chose not to rebuild, I might get.paid 1/3 the replacement value--what my premiums are based on. And their computer that estimates replacement cost is not even close.to what the home could be rebuilt for. RIp-off!!!!
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Old 06-04-2019, 05:27 AM   #15
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When we bought our new house 5 years ago our old agent, 130 miles south same state, said to get coverage with an agent up there in the new town. We did that, reluctantly, first year $500. Second year $650, third year $800. At that point I called my old agent and sent her all the paperwork. She worked up a quote and brought it down to $480. All the same company SAFECO in all cases. The only change was we raised the deductible to $10K. My old agent of 30 years came through for us as she always did.
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Old 06-04-2019, 10:54 AM   #16
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What gets me is ins. companies offering teaser rates to get your business. Look up in 5 years and premiums are based for.replacement values twice what the house is worth on the retail market. If there was a total loss and I chose not to rebuild, I might get.paid 1/3 the replacement value--what my premiums are based on. And their computer that estimates replacement cost is not even close.to what the home could be rebuilt for. RIp-off!!!!

This is good for those that shop their insurance every year or so. If *everyone* did this, then your rates would go up...it's like the cable bill. Those that keep the service for years and years and don't shop rates/look for discounts help subsidize the new subscribers.
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Old 06-04-2019, 12:46 PM   #17
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If you want your premiums to go down, you have to be proactive. Shop your insurance every year and don't be afraid to move to a new, lower priced company. Every company will pay the claim, some faster and some slower. The state Insurance commissioner makes sure they pay along with pressure from social media. Those that complain of rates, and never shop around are the type of people Insurance companies love. I am retired from a property and casualty Insurance company which does give some insight into the way rates are established and maintained. There is no advantage in most cases to being with a company for 30 years.
+1000

I switch auto/home insurance companies every 3 years, on average. Without switching, I don't think I've ever seen my rates go down. If you are too complacent and don't shop around periodically for better rates on your insurance, cable/satellite/internet, and certain utilities (like natural gas providers here in Georgia), you are virtually guaranteed to be paying more than you need to.
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Old 06-04-2019, 01:28 PM   #18
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The only time I had a significant decrease (50%) in HO insurance I switched HO and auto coverage to a new carrier. Auto stayed the same. You need to carefully review things like deductibles and extras (pet coverage, locksmith fees) that I do not value. I also found some good auto rates at The Hartford with their 12 month policies but it excludes < 55 yr old drivers. Probably not a good time to shop right now.
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Old 06-04-2019, 01:42 PM   #19
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I've heard that long-term customers may be labeled as folks whose rates can be more easily raised since it is unlikely they will shop around for better insurance deals. Also, in some states one's credit score can be used as part of the insurance rating.
I used to work in pricing of these coverages. It's highly regulated and no company is allowed to charge more for a group just because they won't shop around. If, however, a company can prove with its statistics from past experience that first-year customers have lower loss potential, they can certainly get a discount for new business approved. Since new business has just been freshly "underwritten" (the company has decided to accept the risk based on past claim records and other underwriting criteria), new customers typically DO have better results.

And yes to your second observation. We've never been able to prove cause-and-effect but there's a very strong correlation between credit score and loss potential.

As jazz4cash noted, you HAVE to do your homework. Is the offering from a new company for the same lints and deductibles? Have they whittled away at coverages that are important to you? WHY are you getting a lower premium? Make sure the reasons are ones you can live with.
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Old 06-04-2019, 02:13 PM   #20
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If you want your premiums to go down, you have to be proactive. Shop your insurance every year and don't be afraid to move to a new, lower priced company. Every company will pay the claim, some faster and some slower. The state Insurance commissioner makes sure they pay along with pressure from social media. Those that complain of rates, and never shop around are the type of people Insurance companies love. I am retired from a property and casualty Insurance company which does give some insight into the way rates are established and maintained. There is no advantage in most cases to being with a company for 30 years.
^^this^^
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