Having gone through Katrina, I can tell you that in a widespread disaster, building costs can skyrocket. I currently have about $100K coverage on a home that I paid $39K for.
Insurance Outrage
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Having gone through Katrina, I can tell you that in a widespread disaster, building costs can skyrocket. I currently have about $100K coverage on a home that I paid $39K for.
Moemg
Gone but not forgotten
You are probably in a top hurricane zone . I would go to an insurance broker . I would also raise my deductible to the highest level . I live on Sarasota Bay and raising my deductible plus shopping around & getting rid of my pool slide lowered my insurance to a reasonable level. Don't fear being cancelled . Someone will always pick you up . I have lived here for ten years and have been cancelled probably six of those .
unallowable
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True this house is in a hurricane zone even tho this part of Florida has dodged the bullet for quite a few years (no direct hit). Thanks for the reassurance "Don't fear being cancelled". I will get a broker and see what the market looks like elsewhere - then I know my position. I talked to my agent today and he said he would see what he can do. Will see what his best looks like and compare. Thanks,
meierlde
Thinks s/he gets paid by the post
A couple of points, on the auto policy and likley on the real property policies you need to have a set level of liability. The umbrella is cheap because it steps in once the claim exceeds the amount of the base policy. How do you think you pay less that 200 a year for $2 million of coverage, it does not include the first 300k or so of loss.
On the flood insurance, its not the companies that do the insurance, its FEMA, the companies all act as agents for FEMA, so the premium on flood insurance should be the same. This is because floods are such wide are things in many cases that no insurance company wants to take the risk. (Just like its becoming on Costal Windstorm) so that the public takes the risk. Recall that for example a number of insurance companies went out of business after 1906 because the earthquake bankrupted them.
On the flood insurance, its not the companies that do the insurance, its FEMA, the companies all act as agents for FEMA, so the premium on flood insurance should be the same. This is because floods are such wide are things in many cases that no insurance company wants to take the risk. (Just like its becoming on Costal Windstorm) so that the public takes the risk. Recall that for example a number of insurance companies went out of business after 1906 because the earthquake bankrupted them.
unallowable
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merierlde, I don't so much question the flood insurance I anticipated that it would be expensive and was happy to be able to get it It's the seemingly arbitrary raising of my regular HOI to an amount much higher than appraisal (which includes the land).
The answer probably is somewhere in the comment someone made that market value and replacement value are different.
Perhaps I need to re-think the need for the umbrella coverage. Thanks
The answer probably is somewhere in the comment someone made that market value and replacement value are different.
Perhaps I need to re-think the need for the umbrella coverage. Thanks
meierlde
Thinks s/he gets paid by the post
On umbrella coverage look at your net worth as a measure of how much you need. Consider that a high limit umbrella policy ensures that the insurance company will come up with better counsel, and be less willing to settle leaving you holding the bag.
On flood insurance its expensive if you are in a new structure in a flood zone. But you can get an estimate for the flood insurance premium from floodsmart.gov Input the address and it will tell you the risk and the premiums. If your in a preferred risk area (outside 1% flood zone) then the premium is around 400 for 250k.
So you can know what you will pay from the government web site for flood and there is no need to go shopping for it.
On flood insurance its expensive if you are in a new structure in a flood zone. But you can get an estimate for the flood insurance premium from floodsmart.gov Input the address and it will tell you the risk and the premiums. If your in a preferred risk area (outside 1% flood zone) then the premium is around 400 for 250k.
So you can know what you will pay from the government web site for flood and there is no need to go shopping for it.
Moemg
Gone but not forgotten
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Wow, The annual flood ins premium is $340 - - house is not new. I will check the site you refer to. I am OK with that amount I think.
The regular property ins is based on liability limit of $95k annually ($1,120). This supposedly cheaper because I have the umbrella. I paid for mostly in cash. I plan to sell a rental property to pay off the balance after I retire in 15 months (counting down months) and my income is less. (capital gains will be less then I hope - maybe a topic for another time). The house was a foreclosure and fulfilled a long time dream of mine to own a place on the river. The whole place - incl 1.75 acres - appraised at less than $60k. I don't think it is the bank that is requiring high coverage.
Perhaps I'm just a cheap b---- and the cost is reasonable. Anyway, the information I have gotten from everyone here is very helpful.
The regular property ins is based on liability limit of $95k annually ($1,120). This supposedly cheaper because I have the umbrella. I paid for mostly in cash. I plan to sell a rental property to pay off the balance after I retire in 15 months (counting down months) and my income is less. (capital gains will be less then I hope - maybe a topic for another time). The house was a foreclosure and fulfilled a long time dream of mine to own a place on the river. The whole place - incl 1.75 acres - appraised at less than $60k. I don't think it is the bank that is requiring high coverage.
Perhaps I'm just a cheap b---- and the cost is reasonable. Anyway, the information I have gotten from everyone here is very helpful.
East Texas
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It may help to separate your issues into sections for the conversation with your agent.
Dwelling coverage - insurance companies insure for replacement cost, not market value, of your house (and not the land). Ask your agent to walk you through the program they use to calculate replacement cost. Make sure all the information in the program (e.g. square feet of rooms, number of bathroom, construction) is correct. Replacement cost coverage for your contents is generally 60% of the dwelling coverage. That number can be increased for a premium.
Flood coverage - It looks like you have a good understanding of it. I can’t remember if the dwelling coverage is replacement or depreciated. Ask your agent.
Auto Physical Damage - if you have older cars, talk to your agent about dropping collision. I really wouldn’t drop comprehensive because it’s inexpensive and covers a myriad of losses (some fool slicing your tires, hail damage - non-collision types of losses). I also wouldn’t consider a comprehensive deductible more than $100. Ask your agent to quote you $100 and $250 deductibles and you’ll see why. The difference is minimal. Auto physical damage is based on market value of the car at the time and place of loss. Your car is always worth less than you think it is in case of a total loss. That’s why it’s important to purchase Gap insurance if you have a loan on a new car.
Liability. Liability is the most important part of any insurance policy. It protects you in case of a situation in which you are legally liable for a loss to property or person. On the auto policy, the people who go for the state minimum on their car insurance find out that it’s just not enough coverage in case of an accident. You can be successfully sued for any damages over and above your liability limits. You have liability coverage under your homeowner’s policy to protect you in case someone is hurt on your property. It’s just not worth risking your financial future to save a few dollars. Liability is the cheapest part of your auto policy if you have a good claims and driving record. I’d rather you drop comp and collision and raise your liability limits if you have to make a decision based on cost. The absolute minimum you should have on your auto liability is 300/500/100 and $300,000 on your homeowner's policy. You should also have MedPay and PIP to cover you and passengers in your car in case of an accident regardless of fault. MedPay is really cheap.
Umbrella. This is always a balancing act. The old rule of thumb was to have liability coverage three times your annual income. That’s pretty much out the window. It needs to be enough to protect you financially. The homeowner’s and auto liability are primary; the umbrella sits on top of them. If you have 300/500/100 on your auto and 300,000 on your homeowner’s plus a $1mil umbrella policy, you have $1.3mil coverage. The umbrella goes a bit further on giving your coverages not in your auto or homeowner’s policies so you need to have a clear understanding of what it does for you. One thing you might want to ask your agent is to see if you can have $1mil on the underlying coverages and that may give you enough of a comfort zone to drop the umbrella. Raising the underlying liability coverages is so inexpensive I’m surprised most people don’t do it. Again it depends on your claims and driving record.
I cannot emphasize enough that having high limits of liability is the key to protecting your financial future whether it be in the underlying policies or with an umbrella. Also, make sure your dwellings are adequately insured for replacement coverage and you understand the deductibles (windstorm usually has a huge deductible). You don't want to have a house fire, a tornado flatten it, or some other type of catastrophic loss and find out you were not adequately covered.
I hope this helps.
Dwelling coverage - insurance companies insure for replacement cost, not market value, of your house (and not the land). Ask your agent to walk you through the program they use to calculate replacement cost. Make sure all the information in the program (e.g. square feet of rooms, number of bathroom, construction) is correct. Replacement cost coverage for your contents is generally 60% of the dwelling coverage. That number can be increased for a premium.
Flood coverage - It looks like you have a good understanding of it. I can’t remember if the dwelling coverage is replacement or depreciated. Ask your agent.
Auto Physical Damage - if you have older cars, talk to your agent about dropping collision. I really wouldn’t drop comprehensive because it’s inexpensive and covers a myriad of losses (some fool slicing your tires, hail damage - non-collision types of losses). I also wouldn’t consider a comprehensive deductible more than $100. Ask your agent to quote you $100 and $250 deductibles and you’ll see why. The difference is minimal. Auto physical damage is based on market value of the car at the time and place of loss. Your car is always worth less than you think it is in case of a total loss. That’s why it’s important to purchase Gap insurance if you have a loan on a new car.
Liability. Liability is the most important part of any insurance policy. It protects you in case of a situation in which you are legally liable for a loss to property or person. On the auto policy, the people who go for the state minimum on their car insurance find out that it’s just not enough coverage in case of an accident. You can be successfully sued for any damages over and above your liability limits. You have liability coverage under your homeowner’s policy to protect you in case someone is hurt on your property. It’s just not worth risking your financial future to save a few dollars. Liability is the cheapest part of your auto policy if you have a good claims and driving record. I’d rather you drop comp and collision and raise your liability limits if you have to make a decision based on cost. The absolute minimum you should have on your auto liability is 300/500/100 and $300,000 on your homeowner's policy. You should also have MedPay and PIP to cover you and passengers in your car in case of an accident regardless of fault. MedPay is really cheap.
Umbrella. This is always a balancing act. The old rule of thumb was to have liability coverage three times your annual income. That’s pretty much out the window. It needs to be enough to protect you financially. The homeowner’s and auto liability are primary; the umbrella sits on top of them. If you have 300/500/100 on your auto and 300,000 on your homeowner’s plus a $1mil umbrella policy, you have $1.3mil coverage. The umbrella goes a bit further on giving your coverages not in your auto or homeowner’s policies so you need to have a clear understanding of what it does for you. One thing you might want to ask your agent is to see if you can have $1mil on the underlying coverages and that may give you enough of a comfort zone to drop the umbrella. Raising the underlying liability coverages is so inexpensive I’m surprised most people don’t do it. Again it depends on your claims and driving record.
I cannot emphasize enough that having high limits of liability is the key to protecting your financial future whether it be in the underlying policies or with an umbrella. Also, make sure your dwellings are adequately insured for replacement coverage and you understand the deductibles (windstorm usually has a huge deductible). You don't want to have a house fire, a tornado flatten it, or some other type of catastrophic loss and find out you were not adequately covered.
I hope this helps.
Sarah in SC
Moderator Emeritus
My broker found me coverage through these folks--American Strategic Insurance in St. Petersburg, FL. Might be worth getting a quote as they were cheaper than State Farm for coastal coverage.
If I was a litigious lawyer (I know, redundant) then I'd sue people based on their gross worth. I'd let them worry about paying their other debts...
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Your best courses of action are to shop around, insist on realistic coverage (and move on to another carrier or agent if they don't cooperate), and increase deductibles to self-insure some of the risk.
On the coverage creep issue, I have run into the same thing and just was just insistent about the coverage limits. Essentially, I'm taking the risk myself on the difference.
On the coverage creep issue, I have run into the same thing and just was just insistent about the coverage limits. Essentially, I'm taking the risk myself on the difference.
East Texas
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While I usually agree on absorbing as much of the risk as possible, with dwelling coverage it's a little different. Read your policy very carefully. If you don't maintain full replacement coverage or if you have less than 80% replacement coverage (mutually exclusive in most cases), you will only get actual cash value instead of replacement coverage in case of a loss. The company might even cancel you if you insist on being below 80% of their replacement coverage calculations.
The deductible gives you some wiggle room and even that has to be reasonable. Doubling your deductible (even if your mortgage company would allow it) might save you very little in the way of premium. That's why a good agent / company is a requisite for the insurance novice.
OTOH, physical damage coverage (comp and collision) are optional with car insurance unless there is a loan on the car. Once again, significantly increasing the deductibles won't proportionately decrease the premium.
What you look for are the discounts. Your agent can discuss all of them with you.
The deductible gives you some wiggle room and even that has to be reasonable. Doubling your deductible (even if your mortgage company would allow it) might save you very little in the way of premium. That's why a good agent / company is a requisite for the insurance novice.
OTOH, physical damage coverage (comp and collision) are optional with car insurance unless there is a loan on the car. Once again, significantly increasing the deductibles won't proportionately decrease the premium.
What you look for are the discounts. Your agent can discuss all of them with you.
If you want to get an "independent" view of your replacement cost on your home, try AccuCoverage® - Replacement Cost Calculator to Help Determine How Much Home Insurance You Need. This is an organization that also commercial analysis and has been around for some time. It cost $8 and will take 15-30 min to complete the survey but you will have results that will give you a solid foundation for discussing your insurance replacement values
Nwsteve
Nwsteve
meierlde
Thinks s/he gets paid by the post
My homeowners company has offered to raise the deductable to 1% from 1000 for other than windstorm and the hail (1% of policy limit) but the numbers they supplied implies no losses for 10 years. (Take the premium reduction and the increase in deductable, divide the deductable increase by the premium decrease and you get the number).
BTW I assume you have auto and home with the same company. Living in the middle of Texas in a small town, the multi line discount pays 70% of the auto insurance (all be it on an old pickup but with collision if I went to no collision or comp then the auto insurance looks like it might come close to being paid by the combined discount)
East Texas
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We live in East Texas in a very rural county. I had all my insurance with the same company for 30 years. Then they did the right thing for their membership and revamped the homeowner's policy to add more coverages at less cost. Unfortunately, I was in the .00000001% (my number, not theirs) that couldn't fit into the new policy. So we had to go with Texas Farm Bureau for a Farm & Ranch policy. I will continue to keep all my other insurance with USAA.
The challenge for the OP in Florida is the high expense - and the extraordinarily high deductble - of windstorm coverage.
A 1% deductible is standard in Texas (excluding that whole windstorm issue if you're within so many miles of the Gulf) unless you buy back a lower deductible.
meierlde
Thinks s/he gets paid by the post
Yes I live in the Texas Hill country so the coastal thing is not an issue. But its easy to see why the wind and hail thing, the house I live in would have had 3 new roofs from the insurance company in 25 years due to wind and hail. At one time 1/2 the roofs in Fort Worth were replaced by insurance companies due to one storm.
Anyway in Tx a nice discount can be had by putting a hail resistant roof on. (on the order of 18-20%).
Anyway in Tx a nice discount can be had by putting a hail resistant roof on. (on the order of 18-20%).
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