Another thread on homeowner's insurance increases

[SecondCor521]

Hi all.

I think I've seen several threads here recently on large increases in homeowner's insurance policies.

I just got my renewal from USAA and they're increasing my rates by about 25%. I haven't had any recent changes to my policy that would have caused such an increase; I suspect it's just a market adjustment by USAA.

I've already reviewed my coverage with them recently and everything is accurate and my coverage levels and deductibles are what I want. I just want to pay less for it.

I'm obviously considering shopping around, but historically USAA has been unbeatable so I'm not optimistic.

What have others done to successfully combat this development? Are there ideas I'm not thinking about?

Thanks.

[jebmke]

My renewal by USAA in MD was nowhere near that -- don't recall the exact number but close to 5% I think. What state? Have replacement values jumped a lot in your state generally?

[braumeister]

USAA here as well, but mine only went up 12% this year. I'm in a higher COL city in a fairly low COL county. Considering the surge in the cost of building materials and contractors' costs, I'm not complaining.

[JoeWras]

Quote:

Originally Posted by SecondCor521 What have others done to successfully combat this development? Are there ideas I'm not thinking about? Thanks.

1) Get mad. Complain here. This didn't help.

2) Call company and reduce my "Contents and Possessions" number. This helped a lot.

In my state, the default practice is to value your possessions on the value of the house. Since all we have is a bunch of crap in the house, there's no way it has tripled in value since 2008 like they estimate. I reduced it to a still generous number not based on percentage, which is allowed. This made a significant difference.

[Dtail]

Mine went up 33% last year, but since that number was still "only" $2,021 yearly, I didn't shop around.
My renewal is not until April, but would shop around if the next increase is similar.
I use a broker for my Umbrella, Car and Home insurances.

[Yipper]

These home insurance threads have scared me quite a bit so I was very anxious to see our updated policy premium when it arrived earlier this month.

Not scary for us at all... HCOL area in the northeast w/ ~$800K house built in the late 1800's... $706 last year and now $726 this year. Auto (2 cars - 2015 BMW and 2021 Honda) went from $1,655 to $1,727.

We have NJM so maybe the "No Jingles or Mascots" tagline is actually saving us some $$ as they don't have all the fancy commercials that I love.

[SecondCor521]

Thanks all.

Property is a 20 year old SFH in Boise, Idaho. Cost of living here is going up because of population inflow from other HCOL areas and inflation in general. Market prices of homes specifically have gone up about 50% in the last three years, but I don't know about construction pricing. Maybe that's all it is and I get to suck it up.

I can't adjust the "possessions" number on my USAA policy, although I would if I could. There's also an "other structures" number which is too high as well but similarly non-adjustable. I'll go poke through my policy again and see.

@JoeWras, it does help a little to whine here! Just not monetarily.

[OldShooter]

Quote:

Originally Posted by SecondCor521 ... I'm obviously considering shopping around, but historically USAA has been unbeatable so I'm not optimistic. What have others done to successfully combat this development? Are there ideas I'm not thinking about? ...

Use an independent agent. Shop the whole coverage package every two or three years. There is no reason to not shop. Shopping costs you nothing.

[MichaelB]

Quote:

Originally Posted by braumeister USAA here as well, but mine only went up 12% this year. I'm in a higher COL city in a fairly low COL county. Considering the surge in the cost of building materials and contractors' costs, I'm not complaining.

My insurance doubled over 3 years and after the second year I dropped my insurer and went with USAA. I had a lengthy discussion with a USAA agent and saw the high premium was in response to very high costs to rebuild. They’ve risen much higher than property prices.

Since then we’ve looked into some remodeling and found that contractor and remodel prices have gone up even more then the USAA tool showed and we may be underinsured.

[jazz4cash]

In MD ours went from $1900 to $3300 last year. They dod put a roof on in 2020 and had a few chunky increases since then. I shopped around and found a premium around $1700 bundled w/ auto. They required a home inspection which I’d never heard of before but it makes a lot of sense.

[JoeWras]

Quote:

Originally Posted by SecondCor521 Thanks all. Property is a 20 year old SFH in Boise, Idaho. Cost of living here is going up because of population inflow from other HCOL areas and inflation in general. Market prices of homes specifically have gone up about 50% in the last three years, but I don't know about construction pricing. Maybe that's all it is and I get to suck it up. I can't adjust the "possessions" number on my USAA policy, although I would if I could. There's also an "other structures" number which is too high as well but similarly non-adjustable. I'll go poke through my policy again and see. @JoeWras, it does help a little to whine here! Just not monetarily.

Yeah, I know. It ultimately helps you feel better. Just know, we're all in it together too -- except for the wise guys who keep posting: "What rise, mine only went up $3!"

Too bad you can't adjust the "contents" portion. This varies state to state and company to company.

[OldShooter]

Quote:

Originally Posted by MichaelB ... Since then we’ve looked into some remodeling and found that contractor and remodel prices have gone up even more then the USAA tool showed and we may be underinsured.

I had an interesting situation with a newly-built house recently. Our (independent) agent gave the insurance company a house value number when they wrote the coverage. That number was quite a bit below what the house cost, but it was the largest on the company would permit. Somewhat later they sent someone to look at the house and estimate its value. That number was lower yet, with a corresponding reduction in premium. IIRC maybe 70% of what the house cost us to build. The agent suggested that we buy the insurance company's "replacement cost guaranteed" add-on. It was quite a premium saving from where we started. So now we are covered for actual replacement cost/no risk of being underinsured.

[SecondCor521]

Quote:

Originally Posted by OldShooter Use an independent agent. Shop the whole coverage package every two or three years. There is no reason to not shop. Shopping costs you nothing.

Yeah, I think I probably will. Some questions:

1. The independent agent gets paid via a spiff from the insurance company, and it's invisible to me, right?

2. Once an independent agent finds me a great deal, can I purchase directly from the insurance company then (still giving the spiff to the agent, of course)? I'd rather deal directly with the insurance company than to pay the agent and have the agent pay the insurer.

Quote:

Originally Posted by JoeWras Too bad you can't adjust the "contents" portion. This varies state to state and company to company.

Indeed. I can either choose 50% or 75% of my house value. That seems insane to me personally, because I am a frugal minimalist. The actual ratio of value of possessions/house is more in the 2.5% range. "Other structures" is 10% at minimum; with no other structures my actual ratio is 0%.

[ivinsfan]

SecondCor the "contents" issue is tricky. Different companies carry it different ways. I think a lot of companies use the % configuration and in a total loss just cut you a check. Of course it's really just a way for them to get more money from you.


Now the other structure issue is tricky...how can they charge you if you don't have any. Because of our business and having other family members as co-owners of our business we just grit our teeth and pay FB...we just all agreed we needed to be covered by the same company in case of any business/family issues.

[OldShooter]

Quote:

Originally Posted by SecondCor521 1. The independent agent gets paid via a spiff sales commission from the insurance company, and it's invisible to me, right?

Right.

Quote:

Originally Posted by SecondCor521 2. Once an independent agent finds me a great deal, can I purchase directly from the insurance company then (still giving the spiff to the agent, of course)? I'd rather deal directly with the insurance company than to pay the agent and have the agent pay the insurer. ...

(a) I doubt they'd let you do this. Many reasons. (b) But most importantly you do not want to do it. Because of his/her independence, the agent has clout with the insurance company. Odds are they have placed many clients with that company, If there is any kind of dispute or issue, the agent will be on your side and there is the implicit threat that the insurance company could lose all of that agent's clients. The agent also probably has history with disputes with the company, knows who to talk to, and what cards to play. To the insurance company you, alone, are just a round-off error. No clout at all. Nobody cares whether you individually stay or go.

[pb4uski]

I can't complain much about our homeowner insurance costs. Our renewals are coming up so I have the information handy.

For our Florida condo, our share of the Association's property insurance is $821 and that is a big increase from last year. In addition, we pay $1,015 for condo insurance just a little higher than last year; so $1,836 in total.

Our summer home insurance is $911 about the same as last year.

Less than $3k a year for two properties, not to bad methinks.

[Dash man]

We also have USAA and our homeowners policy went up 12% this year. We insure three other properties with them too. They send us a check in December and another in February, so we’re not switching. The December check was for $506. The last February check was for being a member for forty years and was $1,683. They vary year to year, but taking them into consideration makes my premiums seem cheaper.

[FindingForward]

Quote:

Originally Posted by JoeWras 1) Get mad. Complain here. This didn't help. 2) Call company and reduce my "Contents and Possessions" number. This helped a lot. In my state, the default practice is to value your possessions on the value of the house. Since all we have is a bunch of crap in the house, there's no way it has tripled in value since 2008 like they estimate. I reduced it to a still generous number not based on percentage, which is allowed. This made a significant difference.

This must vary so much by market. I tried this exact thing and was told it was auto set as a % of the home/land value - my only option was a one-level drop - I could request 50k less in C & P value with a special waiver, but that would net me an annual premium savings of - wait for it - $20. On a $3500+ policy.

The agent explained C & P was not a driver behind skyrocketing rates - playing with that wouldn't do much. Nor would raising the deductibles.

My rates are due to my weather-specific, lawsuit-happy geo region - and there's no getting around it, other than relocating out of the state entirely.

[JoeWras]

Quote:

Originally Posted by FindingForward This must vary so much by market. I tried this exact thing and was told it was auto set as a % of the home/land value - my only option was a one-level drop - I could request 50k less in C & P value with a special waiver, but that would net me an annual premium savings of - wait for it - $20. On a $3500+ policy. The agent explained C & P was not a driver behind skyrocketing rates - playing with that wouldn't do much. Nor would raising the deductibles. My rates are due to my weather-specific, lawsuit-happy geo region - and there's no getting around it, other than relocating out of the state entirely.

Yes, this is very dependent on your company and state.

Changing it made a significant difference for us. Over 10% saved. I explained it here: https://www.early-retirement.org/for...ml#post2970267

[tulak]

Quote:

Originally Posted by OldShooter Right. (a) I doubt they'd let you do this. Many reasons. (b) But most importantly you do not want to do it. Because of his/her independence, the agent has clout with the insurance company. Odds are they have placed many clients with that company, If there is any kind of dispute or issue, the agent will be on your side and there is the implicit threat that the insurance company could lose all of that agent's clients. The agent also probably has history with disputes with the company, knows who to talk to, and what cards to play. To the insurance company you, alone, are just a round-off error. No clout at all. Nobody cares whether you individually stay or go.

For b, I use an independent agent and pay the insurance company directly. Does this vary by state?

I’ve used an independent agent since 2015. Since then, I’ve been insured with two different companies, three different times.

I’ve always used the same company for home/auto/umbrella coverage. I prefer to keep them all with one company to make it easier, plus you usually get a discount.

Regardless if you stick with USAA, it doesn’t hurt to talk to an independent agent and see what they can offer.