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Ongoing escalation of insurance
07-16-2012, 08:28 AM
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#1
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Recycles dryer sheets
Join Date: Jan 2008
Posts: 136
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Ongoing escalation of insurance
Guys, apologize if this isn't the correct forum.
As my wife and I are rolling toward ER, 65 months to go, knock wood. One of the biggest costs we face is home and auto insurance. Home insurance has gone up 90% over the last 10 years, without a claim.
My question is has anyone found a way to purchase a similar policy to an umbrella for home, cars, etc? Along the lines of a catastrophic policy, high deductible, covers all assets. We're located in Texas.
Any thoughts are greatly appreciated.
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07-16-2012, 08:38 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Quote:
Originally Posted by serie1926
Guys, apologize if this isn't the correct forum.
As my wife and I are rolling toward ER, 65 months to go, knock wood. One of the biggest costs we face is home and auto insurance. Home insurance has gone up 90% over the last 10 years, without a claim.
My question is has anyone found a way to purchase a similar policy to an umbrella for home, cars, etc? Along the lines of a catastrophic policy, high deductible, covers all assets. We're located in Texas.
Any thoughts are greatly appreciated.
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Do you live near the coast then a few names are the reason, Eike, and Rita come first to mind. If inland its the number of hailstorms that lead to mass re-roofing, since people don't put on metal roofs.
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07-16-2012, 08:41 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Part of this is due to the ongoing pathetic interest rates on income investments. Historically insurance companies make some of their money not just on the difference between premiums collected and claims paid out, but also on the "float" -- the ROI on the premium money collected but not yet paid out. RThis can be a significant portion of earnings in "typical" times. When the return on "float" gets closer and closer to zero as the Fed continues to keep near-zero interest rates, insurers aren't able to profit much at all from float and have to rely on the spread between what they collect and what they pay out a lot more. Thus they raise premiums to compensate for the loss of income that would normally come from "float".
Having said that, the homeowners insurance market in Texas is pretty dysfunctional and the regulation is rather insurer-friendly. Near the coast may be more problematic, too.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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07-16-2012, 08:42 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by serie1926
Guys, apologize if this isn't the correct forum.
As my wife and I are rolling toward ER, 65 months to go, knock wood. One of the biggest costs we face is home and auto insurance. Home insurance has gone up 90% over the last 10 years, without a claim.
My question is has anyone found a way to purchase a similar policy to an umbrella for home, cars, etc? Along the lines of a catastrophic policy, high deductible, covers all assets. We're located in Texas.
Any thoughts are greatly appreciated.
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I'm not aware of any alternative to carrying home and auto insurance as an umbrella policy requires those types of insurance to be in place and only kicks in once those policy limits are exceeded.
You must be located near the coast because I'm in TX as well and my homeowners premiums are actually less than they were 10 years ago. We did increase our deductible, but that certainly wouldn't account for the difference in our experience vs. yours. I assume you've considered your deductible amount and shopped the competition?
__________________
Numbers is hard
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07-16-2012, 08:47 AM
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#5
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,773
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A lot of people here have been surprised when they shopped their insurance around after being with the same carrier for several years. They found huge savings by switching carriers.
We haven't done that (yes, we are idiots ) but our insurance for car and home together is almost to the penny what it has been for at least 10 years.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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07-16-2012, 09:02 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by Bestwifeever
A lot of people here have been surprised when they shopped their insurance around after being with the same carrier for several years. They found huge savings by switching carriers.
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+1
Being a loyal policyholder is sometimes a huge detriment when it comes to insurance companies. Many see inertia as a great way to run up the premiums.
Quote:
Originally Posted by Bestwifeever
We haven't done that (yes, we are idiots ) but our insurance for car and home together is almost to the penny what it has been for at least 10 years.
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I want to go on record here that I made absolutely no reference to you being an idiot. Call me stupid, but I thought I needed to point it out.
__________________
Numbers is hard
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07-16-2012, 09:30 AM
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#7
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Thinks s/he gets paid by the post
Join Date: May 2006
Location: Orlando
Posts: 2,636
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We just got our quote for the next 6 months for auto insurance from USAA. The entire premium went up 10% which includes close to a 20% increase in the bodily injury, med payments, and PIP areas. Guess where all the fraud is?
I would love to drop the BI limits but I can't because of the umbrella policy requirements (and I don't feel like self-insuring a gap in coverage from the auto policy to the umbrella policy) and it probably really doesn't make sense from a financial risk point of view.
I live in the Tampa Bay area and apparently the two hot spots for auto insurance-related fraud in FL (which apparently leads the country) are in the Tampa Bay area and the Miami area. This I learned from the poor USAA rep who got an earful while assisting me in trying to trim the policy in other areas to reduce my premium.
With USAA, I know the increases are related to real data and not just paying more dividends to stockholders but that doesn't make me feel much better. Insurance companies have no motivation to fight the fraud or to appy concentrated pressure on law enforcement to do it because they can just raise premiums.
Where is our FL state legislature? Our insurance commission? I know, stupid question. I can't remember all the details, but some law was passed in the late 1980's in CA when I lived there that capped the annual premium increases on auto policies. There was much hand-wringing about insurance companies leaving the state but how could an insurance company not participate in the huge CA market?
What I seem to recall happening was a big crackdown on fraud. The cap on premium increases made the fraud issue the insurance company's problem because they could no longer just pass along the increased cost of doing business. They brought their enormous influence and resources to bear on the fraud issue and something happened.
Unfortunately, there is no one with any power to advocate for the lowly premium payer in FL. There was a law passed to try and stem the PIP fraud but they must still be arguing the details and it's probably a bloody battle between the legislators and our huge population of personal injury lawyers and their HUGE lobby in this state. Every third commercial (well, at least it was before the presidential candidates got busy) and billboard is for a personal injury attorney.
Very frustrating.
The cost of homewoner's insurance and the unpredictable cancellations and increases keep us out of the real estate market.
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07-16-2012, 09:49 AM
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#8
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Recycles dryer sheets
Join Date: Jan 2008
Posts: 136
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"Very frustrating." Preaching to the choir!
Appreciate the input all!
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07-16-2012, 09:50 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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I think the best things you can do is shop around for auto/home coverage and looks at increased deductibles (though in some cases the increased risk isn't worth the reduction in premium).
If you have an older car then sometimes it makes sense to drop collision coverage and self insure.
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07-16-2012, 10:08 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,865
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Have you considered perpetual insurance? With such a policy you make an initial deposit, then no more again unless you want to increase coverage. When the policy ends you get your full deposit back. http://en.wikipedia.org/wiki/Perpetual_insurance
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07-16-2012, 10:27 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 4,872
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Quote:
Originally Posted by serie1926
Guys, apologize if this isn't the correct forum.
As my wife and I are rolling toward ER, 65 months to go, knock wood. One of the biggest costs we face is home and auto insurance. Home insurance has gone up 90% over the last 10 years, without a claim.
My question is has anyone found a way to purchase a similar policy to an umbrella for home, cars, etc? Along the lines of a catastrophic policy, high deductible, covers all assets. We're located in Texas.
Any thoughts are greatly appreciated.
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Buying home and auto insurance from the same company can reduce your rates. Next just shop around, you can find big savings simply by changing companies. You can also increase deductibles. In the extreme you can downsize the house and your car so insurance is cheaper. I live in a city and when I ER and no longer have to drive to work I'm considering getting rid of the car.....I'd save $1000/year on car insurance immediately.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”
Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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07-16-2012, 10:31 AM
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#12
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Thinks s/he gets paid by the post
Join Date: May 2006
Location: Orlando
Posts: 2,636
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Quote:
Originally Posted by pb4uski
I think the best things you can do is shop around for auto/home coverage and looks at increased deductibles (though in some cases the increased risk isn't worth the reduction in premium).
If you have an older car then sometimes it makes sense to drop collision coverage and self insure.
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I'm getting my auto policy quoted with the broker that does my renter's insurance but he said even he was shocked by the latest increase in HIS policy in the BI/PIP/Med Pay coverages heavily affected by fraud.
Comprehensive coverage is pennies and collision coverage is nickles compared to the cost of the BI/PIP/Med Pay and those costs actually went down this latest round. We did drop them on the oldest car but the cost for both coverages for the other 2 cars with $300 (comp) and $500 (coll) deductibles is $33 per month. There is no bang for the buck increasing deductibles as I could double the deductible and save maybe $20 over 6 months.
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07-16-2012, 06:17 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by nun
Buying home and auto insurance from the same company can reduce your rates. Next just shop around, you can find big savings simply by changing companies. You can also increase deductibles. In the extreme you can downsize the house and your car so insurance is cheaper. I live in a city and when I ER and no longer have to drive to work I'm considering getting rid of the car.....I'd save $1000/year on car insurance immediately.
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I couldn't go that extreme, but I take it to the level right before. A 12 year old car on liability for around $25 a month, and under $100 a year in property taxes. I could easily afford a new car, but I loathe giving the insurance company and the tax man any more of my money than possible.
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07-16-2012, 06:40 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,127
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I have umbrella insurance and for me it is relatively inexpensive. Yet what I find is that it seems that only the major carriers offer them.
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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07-16-2012, 07:21 PM
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#15
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,855
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Quote:
Originally Posted by Buckeye
We just got our quote for the next 6 months for auto insurance from USAA. The entire premium went up 10% which includes close to a 20% increase in the bodily injury, med payments, and PIP areas. Guess where all the fraud is?
I would love to drop the BI limits but I can't because of the umbrella policy requirements (and I don't feel like self-insuring a gap in coverage from the auto policy to the umbrella policy) and it probably really doesn't make sense from a financial risk point of view.
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USAA stopped insuring Hawaii homes for a number of years due to their hurricane exposure, and when they re-entered the market they quoted me a premium that was over seven times as high as Armed Forces Insurance.
If you're eligible, I'd try AFI for umbrella and maybe even homeowner's. AFI may be like Vanguard-- great rates until you actually need some service-- but if you don't file claims then it may be fine.
In the meantime, I'd like to thank you for enabling USAA to lower our vehicle insurance rates last month... apparently they're going to make Florida pay more so that the other 49 states don't have to!
__________________
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Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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07-16-2012, 07:37 PM
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#16
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Thinks s/he gets paid by the post
Join Date: May 2006
Location: Orlando
Posts: 2,636
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Quote:
Originally Posted by Nords
USAA stopped insuring Hawaii homes for a number of years due to their hurricane exposure, and when they re-entered the market they quoted me a premium that was over seven times as high as Armed Forces Insurance.
If you're eligible, I'd try AFI for umbrella and maybe even homeowner's. AFI may be like Vanguard-- great rates until you actually need some service-- but if you don't file claims then it may be fine.
In the meantime, I'd like to thank you for enabling USAA to lower our vehicle insurance rates last month... apparently they're going to make Florida pay more so that the other 49 states don't have to!
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Could we send you a few ambulance chasers personal injury lawyers? Why don't they like the sun in Hawaii as much as the sun in FL? Or do you think FL laws make it easy for them, in cahoots with our greedy citizens, to screw the system? No, that can't be it. Our state legislators and Gov. Skeletor ("I'm an ex-CEO. I'll whip the state into shape!") wouldn't let that happen.
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07-16-2012, 08:50 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
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Quote:
Originally Posted by GrayHare
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Thanks for mentioning this - I had never heard of this concept before!
After Googling for 10 minutes, I have only found 2 insurers that presently offer Perpetual Insurance policies - both only underwrite in the PA/NJ/DE areas.
Anyone know of a list of insurers that still underwrite Perpetual Insurance policies? I may not be that interested in it, but I know of someone that would be.
__________________
Dryer sheets Schmyer sheets
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07-16-2012, 08:50 PM
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#18
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,855
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Quote:
Originally Posted by Buckeye
Could we send you a few ambulance chasers personal injury lawyers?
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All you need is a strict gun-control law and a 55 MPH speed limit!
__________________
*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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07-16-2012, 10:49 PM
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#19
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,468
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Just got my flood insurance bill today, and opened it with some trepidation, recalling this thread.
Luckily, it went up less than 5%. Whew. Could be worse.
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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07-17-2012, 09:01 AM
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#20
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Thinks s/he gets paid by the post
Join Date: May 2006
Location: Orlando
Posts: 2,636
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Quote:
Originally Posted by W2R
Just got my flood insurance bill today, and opened it with some trepidation, recalling this thread.
Luckily, it went up less than 5%. Whew. Could be worse.
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Not much fraud associated with flood claims I guess. At least the scammers haven't gotten to that yet!
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