Anyone insured a big house?

[Teacher Terry]

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

People spending that much money to buy a house probably won’t care that the insurance is so expensive.

 

[Amethyst]

Don't kid yourself. Remember this forum is full of people with money, who got that way by holding onto every $$ and being careful.

People spending that much money to buy a house probably won’t care that the insurance is so expensive.

 

[aja8888]

Don't kid yourself. Remember this forum is full of people with money, who got that way by holding onto every $$ and being careful.

Exactly stated. Every dollar to me is a separate and important asset!

 

[Route246]

These numbers are so far out of whack compared to NorCal. $1.75M is barely a down payment here in Palo Alto or Los Altos (just look those cities up in Zillow) and 6600 sq ft anywhere is going to run $20M-plus.

That said, what are your deductibles? Insurance companies work from actuarial tables so they are setup to never lose money as they can lay off their high risk policies somewhat with reinsurers and pass off the remaining risk to policy holders.

As much denial from the fossil fuels industry about climate change the insurance companies are where the rubber meets the road and they are merely passing on costs to customers for future anticipated anomalous weather events. I read that it is getting more difficult to get insurance in coastal areas of Florida...ditto for the gulf coast.

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.

 

[Koolau]

As much denial from the fossil fuels industry about climate change the insurance companies are where the rubber meets the road and they are merely passing on costs to customers for future anticipated anomalous weather events. I read that it is getting more difficult to get insurance in coastal areas of Florida...ditto for the gulf coast.

I think insurance companies have a fair amount of leeway in whom they insure. BUT I doubt insurance companies go to the state insurance regulators and talk about global warming. They say "Here's what happened last year due to hurricane xyz." The state regulators have to approve rate increases.

 

[pjigar]

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

We are naked! But then again we have a very modest (county appraised $240K) house with a metal roof. I would not recommend OP go without an insurance if the house is a substantial part of his/her networth.

 

[LateToFIRE]

People spending that much money to buy a house probably won’t care that the insurance is so expensive.

In VHCOL locations (ex. West/East Coast cities), $1.75M is unfortunately not an unusual value for housing, which often means that other parts of your budget could be stretched pretty thin. Also, as in my case, I've often bought homes, only to have the value double or even quadruple over time - not exactly a terrible problem to have, but what I mean is you start out paying a reasonable price for a home, and in 10 years everybody thinks you're rich and wants a piece of you - the insurers, the tax man, anybody who does any work on the house jacks up the bids accordingly, etc.

 

[Koolau]

In VHCOL locations (ex. West/East Coast cities), $1.75M is unfortunately not an unusual value for housing, which often means that other parts of your budget could be stretched pretty thin. Also, as in my case, I've often bought homes, only to have the value double or even quadruple over time - not exactly a terrible problem to have, but what I mean is you start out paying a reasonable price for a home, and in 10 years everybody thinks you're rich and wants a piece of you - the insurers, the tax man, anybody who does any work on the house jacks up the bids accordingly, etc.

It's so true that a little bit of time in an area can make a huge difference in the value of your property. If you happened to have "chosen well" when you bought, your "modest" property can (as if by magic) become quite valuable. THEN, everyone wants a piece of you - even though your income may be pretty much fixed. It's sorta like buying a penny stock that suddenly takes off. You didn't plan for it, but it can happen. YMMV

 

[MichealKnight]

Thanks

Appreciate all replies I'll keep reading.

I have one hope. Talking to a different broker, the owner of his agency and he feels 65% chance of getting this right. He claims underwriting as already looked at it.

Because its a big house he says home inspector will come take a look for stuff like mold, cracks in foundation or major safety hazards and then we'll see.

So.....

instead of paying $26k a year I'm trying to get them to let me pay monthly. In a perfect but imperfect world - I'd pay 2 months with status quo company (2200 a month).....but if this new guy comes thru I move my home and car insurance to the....which would see my total cost of home and car insurance go up $1500 a year........versus $17,0000 a year.


I won a few small 3bed/2 bath townhomes for rental purposes. Man one day I wanna move into one of those.

I'd overcharge myself on the rent and get huge returns on my rental investment .

 

[cyber888]

I say - sell it. It might go up to $30,000 next year. I would be very scared.

My house is 3,400+ sq. ft. full brick home with a water hydrant right in front of my house, so 50% smaller than your 6,600 sq ft big house.

I paid $1,189 to insure it this year. House is worth around $600K.
I hope I don't pay more than $1,300 next year.

 

[LateToFIRE]

I [own] a few small 3bed/2 bath townhomes for rental purposes. Man one day I wanna move into one of those.

I'd overcharge myself on the rent and get huge returns on my rental investment .

Lol, you gotta be a landlord to understand landlord humor!

 

[Katsmeow]

In Texas for that kind of valued house would have home insurance around $8-12K. I know 1M house has about $4-5K insurance. A 500K house has $2K insurance.

It all depends on where you live. For example rural house cost more here. Our country home valued at $350K has $2200 insurance.

Not my experience. We recently sold a house in Texas, value in the high $500s. We were in a suburban area. My homeowner's insurance went up this year to over $6800. We had never had a claim and this was about a 60% increase in premiums!

20 mins later, a nice young lady - I'm sorry folks - but 20 bucks says she just had lunch at Chipotle,

Huh? What's wrong with Chipotle

 

[JoeWras]

Huh? What's wrong with Chipotle

I've been abused here for liking Chipotle too. I'm a 60 year old chubby, meat loving, conservative leaning, man. And I proudly love Chipotle!

 

[Koolau]

I've been abused here for liking Chipotle too. I'm a 60 year old chubby, meat loving, conservative leaning, man. And I proudly love Chipotle!

Yeah, we don't have Chipotle in Hawaii though back in the vast midwest, they seem to be thick! Never tried them but maybe it's time.

 

[MichealKnight]

Circling Back

In case someone in the future stumbles on this thread just wanted to report back.

The insurance agent I was using - who told me not to resign with my current home insurer - came back and told me that they tried other companies but nobody else would write it. Then they physically yelled it me for being pensive and wanting to explore alternatives when "we did all this work for you" - I reminded them that it was their agency that told me to sit on my hands and now, at the last second I was forced to make a decision.

So I paid -$7200 for 1 quarter versus just paying the full year like I usually do.

One local agent was very nice but she also couldn't place it.

Found another local agency - who is franchised by one of the more recognized mainstream insurers. I have NO doubt that this company will be a bit harder and stingier to make claims with as they probably don't specialize in $1mm+ homes. The owner of this agency told me - - the insurer he represents actually has lower underwriting standards. The 3rd party inspector who came to the property told me the same thing.

BUT....instead of the proposed $26,000 per year......I'm gonna pay $8000 per year like I was used to paying.

Woo-Hoo. This was really gonna put a crimp in my financial plans.

Thanks all who replied and empathized, appreciate you.

 

[LateToFIRE]

Glad to hear you reached a good resolution! All these stories about property insurance increases wus startin to scare the heck outta me.

 

[COcheesehead]

This story to me is absolutely crazy. We insure a $1m ish home for $576 a year.

 

[Telly]

This story to me is absolutely crazy. We insure a $1m ish home for $576 a year.

Well, don't move to Texas! Not the DFW area, that's for sure!
$576 a year might get you insurance on a pup tent!

 

[COcheesehead]

Well, don't move to Texas! Not the DFW area, that's for sure!
$576 a year might get you insurance on a pup tent!

Where I live, western Colorado, is where all the Texans seem to be moving.

 

[Sunset]

This story to me is absolutely crazy. We insure a $1m ish home for $576 a year.

That is incredibly cheap !!

Any special reason, like very high deductible or something else ?

We pay twice that for a home worth ~250K

 

[LateToFIRE]

This story to me is absolutely crazy. We insure a $1m ish home for $576 a year.

I'm guessing your deductible is... $1M

 

[ncbill]

In case someone in the future stumbles on this thread just wanted to report back.

The insurance agent I was using - who told me not to resign with my current home insurer - came back and told me that they tried other companies but nobody else would write it. Then they physically yelled it me for being pensive and wanting to explore alternatives when "we did all this work for you" - I reminded them that it was their agency that told me to sit on my hands and now, at the last second I was forced to make a decision.

So I paid -$7200 for 1 quarter versus just paying the full year like I usually do.

One local agent was very nice but she also couldn't place it.

Found another local agency - who is franchised by one of the more recognized mainstream insurers. I have NO doubt that this company will be a bit harder and stingier to make claims with as they probably don't specialize in $1mm+ homes. The owner of this agency told me - - the insurer he represents actually has lower underwriting standards. The 3rd party inspector who came to the property told me the same thing.

BUT....instead of the proposed $26,000 per year......I'm gonna pay $8000 per year like I was used to paying.

Woo-Hoo. This was really gonna put a crimp in my financial plans.

Thanks all who replied and empathized, appreciate you.

Chubb?

They're one of the insurers who require a $1+ million home before they'll underwrite a policy.

 

[LateToFIRE]

Chubb?

They're one of the insurers who require a $1+ million home before they'll underwrite a policy.

I was a loyal Chubb customer up until 15 years ago - then they pulled the ole jack your premium to ludicrous levels trick. We had NEVER filed a claim - EVER. There's fire hydrant 10 feet from the building, there's a fire station around the block, the building is wired to the gills with monitored security and fire alarms. I mean WTF man, was I pissed. So, switched to Firemans. Then after a few years they eventually did the same thing. Now, I'm with PURE. Premiums have been going up, but nothing like Chubb.

P.S. This is the kind of high-value property insurance where they send an APPRAISER out to the property to verify all is in order. Not like they didn't know what they were insuring.

 

[COcheesehead]

That is incredibly cheap !!

Any special reason, like very high deductible or something else ?

We pay twice that for a home worth ~250K

I am guessing land value is part of it. Our lot value is likely close to $200k. We have a fire hydrant in front, LOL. We live where there is little in the way of natural perils, no hurricanes, no floods. It’s high desert mesas and canyons so wildfire is unlikely as are tornadoes. We are not in the hail belt like eastern Colorado is. The structure has a lifetime metal roof.
I think our deductible is $1000.

 

[Retired2021]

Insurance has been brutal last 3 years. I've shopped every year and decided to stay with my highly rated insurer each time. I've been with them since 1991. This year the premium increased 20% and the total insured amount increased 1%.
Dwelling Limit - $644k
Dwelling Limit plus 150% - $322k
Dwelling Extensions - $64k
Personal Property - $354k
Personal Liability - $300k (plus $2m umbrella)
Loss of Use - Actual amount limited to 24 months
Medical Payments - $25k
Water backup - $10k
Deductible - $5k
Roof and hail deductible - $0

I paid the premium, then 1 week later logged back online and changed the Deductible to $10k and the Roof and Hail Deductible to 5%. Reduced my premium from $1,640 to $1,020. Chicago suburb. I guess I can live with it.

My brother lives in Treasure Island, FL and is naked. Every hurricane evacuation he hopes to return to his single family home with no storm surge or wind damage. Don't think I could live with that.