Anyone insured a big house?

[Aerides]

^

And a lot of folks think things are similar to car insurance - that your personal claim history, or lack thereof, should be significant. It's got a lot more to do with your specific area, the actuarial risks, and the local costs, and less to do with your personal behavior than a car.

Also a good time to take a look at things like contents and replacement values and see what you're insured for there. We dropped most of that.

 

[Sunset]

For comparison, 5600+ square foot house here. Home owner's insurance is $931/yr. We are on public water with hydrants nearby. We're also on the highest point for miles, so the potential for flooding is low.

That is super cheap. I pay $600 for a 1200sqft house valued at $160K and have all the same things you mentioned.

You BOTH are cheap we pay ~$1,400 for a 1,000 sq ft , and have a hydrant in the FRONT yard !

 

[Teacher Terry]

^

And a lot of folks think things are similar to car insurance - that your personal claim history, or lack thereof, should be significant. It's got a lot more to do with your specific area, the actuarial risks, and the local costs, and less to do with your personal behavior than a car.

Also a good time to take a look at things like contents and replacement values and see what you're insured for there. We dropped most of that.

This post got me to look at my insurance and it went from 670/ year to 740 and it’s a 855 sq ft condo. I had personal property replacement insurance for 45k. When I started pricing what it would cost me to replace everything it was only 20k. So I reduced it to 30k to be safe and reduced my liability to 100k instead of 300k.

I don’t have any yard and everything outside my front door is community property because it’s an inside hallway so wouldn’t be my responsibility. There’s no steps in my condo. I don’t have any of the typical risks you would have with a house or townhome.

 

[2retireearly]

I believe your $100,000 claim has a lot to do with your new, very high premium. When you try to get a new policy, they will probably ask if you have had any recent claims. They may not want you, or may, also , raise your premium because of that claim. I had a water hose break on a washing machine...on a prior, inexpensive home. But it happened in the first year, and I had reported another water pipe brake, when it looked like the damage was high..it wasn't ...ceiling was cheap to fix..so I never claimed it..but...they had the report in their data base. So 2 water claims in first year. They dropped me (clai on the water hose, only $1000). And I had a heck of a time gtting new insurance, due to have those 'water' claims. Premiums are regulated..and have to be based on claims, and where you live, the exact area of town, etc...also fire hydrants, etc..But all based on 'facts'. Good luck with shopping around. Inquire from your neighbors, how much they pay in premiums...

 

[Retired Expat]

Long story short - I overbought vis a vis house about 8 years ago. Was on top of the worlds business-wise, didn't anticipate having to retire, get out of business so soon.

Current value: 1.75 million.

6600 sq feet........ NO fire hydrants, whole neighborhood is on private wells.

No mortgage owed.

Had a $100k claim 2 years ago...mind you, many people in town had the same claim (record quick rain, basements destroyed).

Last year, paid $7800.

NOW - I just got the renewal.....$25,000+.

I knew it would bump.....but geez.

I maybe right or wrong but at this property value and no fire hydrants....perhaps only a few companies do it. I will have an agent shop it....but man, I think I'm in for it.

Anyone want topless pictures of a 47 year old overweight guy? If so, I can start a paid membership website.

Happened to me in a big house right up against the Santa Monica mountains. That year due to wild fires a thousand homes were lost, the rain that followed washed away a couple thousand more. Allstate left, Statefarm put a moriatorium on policies in my area despite the hydrant and every house having a pool for water storage. I had to insure with Lloyds of London. Cost a fortune! Never came back down to normal either. Happy I moved!

 

[catii]

Claims are definitely a factor, but we had a $372K claim back in 2014 (freak storm blew off second-floor roof, followed by 6 inches of rain in 3550 sqft home), & my rate went up less than $100/year.

If you, or any family member, is former military, definitely check out USAA. I've been with them since 1970, & have almost complaints. I get solicited by insurance salesmen several times a year, all of whom guarantee me better rates...until I mention USAA. Then, they go away quietly. Our house, rental properties, cars, personal property, & umbrella are all with USAA.

 

[Koolau]

News flash: Insurance companies do not like to make pay outs. My car insurance company agent was my cousin. He advised me to never turn in a small claim. He said it would cost us more in the long run. So, I switched to 1000 deductible. If I'm not gonna get a side mirror replaced by insurance, why pay for it?

We had a water claim at home. Cousin said. Do NOT let that happen again. He'd have no ability to keep us from being dropped.

 

[cyber888]

$25K for home insurance - that's insane.

 

[Crabbyjerry]

I just checked my homeowner's insurance. It was $1735 last payment, which was in August 2022. However, earlier this year I had them up the coverage on secondary structures by $100,000. I had a 36x60 pole barn garage built over the course of 2021-2022, and the secondary structure coverage was horribly inadequate.

The house isn't huge. The county thinks its 3929 square feet, but it's more like 2440, plus a 960 square foot basement, and a 432 square foot 3-season sunroom. It's on well and septic, and I have no idea where the nearest fire hydrant is. It has a fairly large swimming pool, about 50,000 gallons...never thought of that as a water source, but good to know they could use it if needed!

The county has it assessed for $858K, and Redfin estimates $847K. I don't think either one takes that garage into account though; probably too recent to be on the books.

The 8/2021 payment was only $1430. 8/2020 was only $1324 and 8/2019 was only $1302.

I have a feeling the next insurance payment is going to go up considerably though. My reasoning behind that, is that I saw the bill on my Grandmom's house, which is much smaller and more modest, only assessed in the low $300K range. And it has a fire hydrant out front. It's a cape cod, maybe 1500 square feet. The bill, due at the end of the month, is $1949!

Different county though. More crime-ridden in general, although her particular neighborhood isn't too bad. But I wonder if that has something to do with it?

Would you share what a nice barn like that size would cost and does it include floor and utilities

 

[mcbraemer]

Our facts:
Central Ohio, Columbus area
2000sf
$400K est
No hydrant near structure
Home Ins Premium $1306 annually
Premium as percentage of property value 0.33%

Your premium as percentage of property value.1.43%

Your premium seems quite high to me. Based on my percentage I would expect your premium to be closer to: (0.0033) x $1750000 = $5775 annually.
There are lots of other factors but it seems high

 

[meierlde]

Her statement makes no sense. Homeowners insurance rates are strictly regulated by state insurance departments and rate requests are gone over with a fine-toothed comb. Every assumption made that might overstate the need for a rate increase is picked apart and attacked and every assumption that might have been too conservative is ignored. That's what they do. No company can get away with jacking up rates for some sort of revenge.

If you're comfortable volunteering details about your location- are you anywhere with a risk of wildfires, tornadoes, hurricanes or other expensive potential catastrophes? All insurance companies have catastrophe models and they may vary- both assumptions and the company's own spread of business in the area.

Go ahead and give them time to seek new quotes, but feel free to get quotes from other companies/agencies in the meantime. And do pay attention to fine print. One area is replacement cost vs. depreciated cost. Many companies will pay only the depreciated value of your roof in a windstorm, not 100% of the cost of a new one.

Note that if you are in Ca, Tx or FL rates are going to skyrocket a lot.
Fl due to Hurricanes and Ca due to wild fires, Tx due to the big freeze

in 2021.Or perhaps soon anywhere near a coast. In addition the whole reinsurance industry has been losing money and as a result raising the reinsurance rates. (Reinsurance allows a company to lay off parts of its bigger risks to other companies
etc.) .

 

[athena53]

$25K for home insurance - that's insane.

Depends on the location. My sister and BIL sold a home on Hilton Head after the homeowner's insurance got to $8,000 annually. Last sold in 2008, which may have been the year they sold, for $745,000. On-line estimate of current value is $1.4 million. I'm willing to bet insurance on that place is running around $25K now. While it's close to the ocean it's not even oceanfront.

What drives the cost isn't the break-and-enter burglaries (especially since they put limits on coverage for jewelry, computers and other portable expensive items) or even house fires since smoke detectors have made those rare. It's the catastrophes- hurricanes, tornadoes, wildfires, floods. If you live in Montana you'll pay a lot less for coverage than you will in coastal Florida.

 

[Andre1969]

Would you share what a nice barn like that size would cost and does it include floor and utilities

I forget all the details on various costs, but it probably was close to $100K, when said and done. The building was originally around $76,000. However thanks to COVID there were delays in getting the permit, breaking ground, and so on. Then material prices shot up, and it was worked into the contract that if materials went up too badly, then I'd have to either pay part of it or hold off on construction in the hopes that prices went down. Or cancel entirely. I just wanted it done and over with, so I paid. That was around $14,000 I think. Site prep was $4,000. They had to level the yard, and I forget how many truckloads of dirt they ended up bringing in for that. Oh, and i paid around $5,000 for a tree company to come out and take down some trees. A couple of them had grown at an angle, where if they fell they would hit the garage. I had a few more taken down as well, that weren't garage-related, but I can't remember what the cost breakdown was. I probably could have gotten someone else to do it cheaper. Or, who knows? That was still at a time labor seemed pretty tight, whereas now suddenly tree service people seem a dime a dozen around here.

As for the floor, yep, that was included. 4" concrete. It seemed a bit thin to me, but they said it was more than adequate. And no problems yet. No electric, though. This company said my county was a pain when it came to electrical permitting, so they didn't get into that. I figure I'll do the electric at some point, but it doesn't seem to have been too much of a problem yet. There are two other buildings I can use at workshops in the meantime, and the new garage is close enough that I can just run an extension cord to it if needed.

As for the building itself, it's 36x60, and the main floor has a 10 foot ceiling There are four garage doors. 3 on one of the 36 foot ends, and one towards the back end of one of the 60 foot sides. So in theory you could actually drive all the way through it if you wanted. The area of the upstairs that has a floor is about 15x60. The ceiling is 8 feet in the middle, but at the edges of the floor slopes down to about 6 feet. I also had gutters installed, with gutter guards.

 

[Surewhitey]

You BOTH are cheap we pay ~$1,400 for a 1,000 sq ft , and have a hydrant in the FRONT yard !

Same in the big city of Dallas. Just went from $1k to $1.400 for 1150 sq ft. Highlands & flat 1950s land. About 1-2 miles from the fire department though. Home is valued just over $400k.

 

[Koolau]

As we're in a condo, the assn. covers beyond 25K so we must seek a policy for our contents, etc. It started at $125 and is up to about $450 now.

 

[Closet_Gamer]

We just bought a beach house which we are renting part time. Its admittedly la arge and very expensive home, 600 ft from the sand.

The insurance journey was insane. I am carrying four seperate policies from four companies.

1 - Traditional home insurance
2 - Wind and Rain
3 - Flood
4 - Liability
(4.5 - bumped my personal liability even tho the house is in an LLC)

No insurer would even write a core home policy that is likely to cover a full reconstruction. For the above, I'm paying about $20K per year with big deductibles and some self-insurance if reconstruction exceeds the core policy values.

I've read about big insurance companies pulling out of key states where the regulators are drawing hard lines. The insurance market is in real trouble.

The stated cause is the size of major incidents which have put the re-insurers in jeopardy. They lost money 5 years in a row and re-insurance rates are up 30-40%.

I suspect there is also an SVB style issue. Insurers of all sorts liability match through high quality bonds. To the extent those bonds are depressed in value, they cannot sell to cover losses above expectations. So they have to bump insurance premiums to close the gap. Where they can't do that, they have to cap the risk or exit the market.

This is far from over and we may find that some houses are simply un-insurable. Getting liability under control is critical. We may also see the emergence of new co-op style insurance companies (which is how I think Farmers started??)

 

[Teacher Terry]

Claims are definitely a factor, but we had a $372K claim back in 2014 (freak storm blew off second-floor roof, followed by 6 inches of rain in 3550 sqft home), & my rate went up less than $100/year.

If you, or any family member, is former military, definitely check out USAA. I've been with them since 1970, & have almost complaints. I get solicited by insurance salesmen several times a year, all of whom guarantee me better rates...until I mention USAA. Then, they go away quietly. Our house, rental properties, cars, personal property, & umbrella are all with USAA.

I was with USAA for awhile but the rates kept going up. Now I have my car with GEICO and my condo with liberty mutual. I would prefer to have them both with the same company but GEICO doesn’t do home insurance but contracts with a company that I have never heard of. It’s still cheaper to have 2 companies.

 

[Koolau]

We just bought a beach house which we are renting part time. Its admittedly la arge and very expensive home, 600 ft from the sand.

The insurance journey was insane. I am carrying four seperate policies from four companies.

1 - Traditional home insurance
2 - Wind and Rain
3 - Flood
4 - Liability
(4.5 - bumped my personal liability even tho the house is in an LLC)

No insurer would even write a core home policy that is likely to cover a full reconstruction. For the above, I'm paying about $20K per year with big deductibles and some self-insurance if reconstruction exceeds the core policy values.

I've read about big insurance companies pulling out of key states where the regulators are drawing hard lines. The insurance market is in real trouble.

The stated cause is the size of major incidents which have put the re-insurers in jeopardy. They lost money 5 years in a row and re-insurance rates are up 30-40%.

I suspect there is also an SVB style issue. Insurers of all sorts liability match through high quality bonds. To the extent those bonds are depressed in value, they cannot sell to cover losses above expectations. So they have to bump insurance premiums to close the gap. Where they can't do that, they have to cap the risk or exit the market.

This is far from over and we may find that some houses are simply un-insurable. Getting liability under control is critical. We may also see the emergence of new co-op style insurance companies (which is how I think Farmers started??)

This is very pessimistic. I hope there is an answer.

 

[MichealKnight]

Her statement makes no sense. Homeowners insurance rates are strictly regulated by state insurance departments and rate requests are gone over with a fine-toothed comb. Every assumption made that might overstate the need for a rate increase is picked apart and attacked and every assumption that might have been too conservative is ignored. That's what they do. No company can get away with jacking up rates for some sort of revenge.

If you're comfortable volunteering details about your location- are you anywhere with a risk of wildfires, tornadoes, hurricanes or other expensive potential catastrophes? All insurance companies have catastrophe models and they may vary- both assumptions and the company's own spread of business in the area.

Go ahead and give them time to seek new quotes, but feel free to get quotes from other companies/agencies in the meantime. And do pay attention to fine print. One area is replacement cost vs. depreciated cost. Many companies will pay only the depreciated value of your roof in a windstorm, not 100% of the cost of a new one.

Well for the first time in my life - I feel almost teary over something financial.

The insurance agent I've used for 10 years who said they'll shop the policy just called me and claims - NOBODY wants to even touch me because I had a big claim 2 years ago. I explained that yes, it aa a $152,000 claim......and the insurance person I dealt with (the one who approves the repairs) sent their restoration people out, made the estimate and said that this was not negligence but it was a "once in a generation rainfall" that happened really fast, and really hard.

But according to the agent - nobody wants it due to that claim.

So right now, I either pay $26,000 a year ($17,000 MORE than I had in my early retirement budget).......or have a 1.7mm house - - sitting around with no insurance.

Someone here mentioned a state "FAIR" plan I'll look into that now though I wonder if they insure expensive houses.

 

[Koolau]

Well for the first time in my life - I feel almost teary over something financial.

The insurance agent I've used for 10 years who said they'll shop the policy just called me and claims - NOBODY wants to even touch me because I had a big claim 2 years ago. I explained that yes, it aa a $152,000 claim......and the insurance person I dealt with (the one who approves the repairs) sent their restoration people out, made the estimate and said that this was not negligence but it was a "once in a generation rainfall" that happened really fast, and really hard.

But according to the agent - nobody wants it due to that claim.

So right now, I either pay $26,000 a year ($17,000 MORE than I had in my early retirement budget).......or have a 1.7mm house - - sitting around with no insurance.

Someone here mentioned a state "FAIR" plan I'll look into that now though I wonder if they insure expensive houses.

I have no idea if it's possible - but can you spend the $26K to instead upgrade your house to be more resistant to the hazards it faces? (More clips, stronger roof, improved drainage around the house, fire suppression in kitchen, etc.)

Going naked would be scary, but a lot of people do it. Good luck!

 

[Teacher Terry]

Maybe it’s time to sell and downsize to something more affordable.

 

[Koolau]

Maybe it’s time to sell and downsize to something more affordable.

I understand your suggestion, but it seems like a complete capitulation to the insurance "cabal" to move in order to get away from a single bad claim experience.

I have no problem with the insurance companies making money, but to essentially squeeze someone out because of one claim seems improper. Now, if the claims people or investigative people could come to the house and say "that needs improvement, that needs replaced, etc." then maybe it would be appropriate to charge an excessive fee.

 

[Kings over Queens]

Well for the first time in my life - I feel almost teary over something financial.

The insurance agent I've used for 10 years who said they'll shop the policy just called me and claims - NOBODY wants to even touch me because I had a big claim 2 years ago. I explained that yes, it aa a $152,000 claim......and the insurance person I dealt with (the one who approves the repairs) sent their restoration people out, made the estimate and said that this was not negligence but it was a "once in a generation rainfall" that happened really fast, and really hard.

But according to the agent - nobody wants it due to that claim.

So right now, I either pay $26,000 a year ($17,000 MORE than I had in my early retirement budget).......or have a 1.7mm house - - sitting around with no insurance.

Someone here mentioned a state "FAIR" plan I'll look into that now though I wonder if they insure expensive houses.

The "fair" plan isn't what you think, and isn't going to be an option I'd suggest. It's going to be bare bones coverage and very expensive, and in the event of a claim, I promise you aren't going to be satisfied with the service.

You might want to check with other brokers. I'd also ask for a list of the carriers who declined and the actual declination the broker received. Trust, but verify. It's not like a broker has ever lied about marketing an account before.

 

[LateToFIRE]

Yes, I've insured just about every type of property at some point or another, including high value homes. Clearly, your insurer is just not into you (or your location or housing type) any longer and would rather you just move along now.

Options:

(1) Yes, you can sell and move to something smaller, but that's a big decision you should not make under the gun.

(2) Of course, you should ask around and shop around, chances are there is a more willing insurer out there.

(3) You should consider taking some amount of self-insurance - in other words increase the deductibles

 

[Amethyst]

Easy to say, but won't prospective owners also discover that the house is "uninsurable" due to the claim?

Maybe it’s time to sell and downsize to something more affordable.