Homeowner Insurance Doubled?!!

[athena53]

This hail thing is killing our homeowner's insurance. Look, hail causes damage and can result in a claim. But the way this has changed in the last 10 years or so is out of control.

I guess I was an idiot to pay for my own roof this year.

Many insurers are offering lower premiums for coverage of depreciated value only. If you have a 15-year roof and it's 12 years old, the replacement cost will be pro-rated. That would cut down a lot of the vultures who go door-to-door after a storm or put up signs: "Free new roof*. *Must have insurance."

I spent 38 years in property-casualty insurance. The numbers don't lie. When claims plus expenses are higher than premiums, rates have to increase. Insurers are stuck between a rock and a hard place- they can't operate at a loss year after year but the rates are strictly regulated and the regulators (many of whom are elected) want rates to be "affordable".

 

[RetiredAndLovingIt]

It's not just Florida, Farmers recently announced they are limiting the number of new policies they will write here in California.
Allstate and State Farm announced they would no longer be writing new policies earlier this year.

 

[jkern]

I too live in the SF Bay Area. My house is located in the Castro Valley hills and backs up to a canyon. I currently pay $1667/year with a $2500 deductible.

My insurance company came out and took pictures of the back of the house about 6 months ago. A couple of months later I received a letter stating that my policy will not be renewed. Then I received another letter stating that they missed the required notification timeline and I have one more year.

I'm dreading what my insurance will be when I have to renew it next year.

 

[Koolau]

I too live in the SF Bay Area. My house is located in the Castro Valley hills and backs up to a canyon. I currently pay $1667/year with a $2500 deductible.

My insurance company came out and took pictures of the back of the house about 6 months ago. A couple of months later I received a letter stating that my policy will not be renewed. Then I received another letter stating that they missed the required notification timeline and I have one more year.

I'm dreading what my insurance will be when I have to renew it next year.

Can you negotiate for, say, insure the house but not the roof?

 

[athena53]

Can you negotiate for, say, insure the house but not the roof?

Probably not. Rates as well as forms for Homeowners and other personal coverages are regulated and the company has to use what's been approved. Unless they have a policy form that specifically excludes the roof and an approved rate schedule for it, they can't do it.

And, a thought I had while mowing the lawn: anyone who thinks the insurers are raking in $$ for covering catastrophes may want to get in on the action by buying catastrophe bonds. Full details here but briefly: the investor puts up $XX,000 and gets a coupon rate around 6.25% over the three-year term. If an earthquake or other natural catastrophe occurs with a cost to the industry over a certain threshold (measured by an independent company), the bondholders' principal can be eroded up to 100% depending on the size of the loss.

Anyone want to take that on? I don't.

 

[Koolau]

Probably not. Rates as well as forms for Homeowners and other personal coverages are regulated and the company has to use what's been approved. Unless they have a policy form that specifically excludes the roof and an approved rate schedule for it, they can't do it.

And, a thought I had while mowing the lawn: anyone who thinks the insurers are raking in $$ for covering catastrophes may want to get in on the action by buying catastrophe bonds. Full details here but briefly: the investor puts up $XX,000 and gets a coupon rate around 6.25% over the three-year term. If an earthquake or other natural catastrophe occurs with a cost to the industry over a certain threshold (measured by an independent company), the bondholders' principal can be eroded up to 100% depending on the size of the loss.

Anyone want to take that on? I don't.

Heh, heh, certainly NOT for 6.25%!

 

[Sunset]

All this talk of insurance made me look, and while I had trouble finding a truly independent agent, I decided to just phone up the local State Farm agent.

Bottom line, for house, Umbrella, and 2 autos, our insurance is going from ~$3,300 to ~$2,200
With a little better coverage on the umbrella and autos.

We were with AllState for 8 years, so I guess they felt we weren't going to leave. .

 

[JoeWras]

I just get a notice of new policy on my account, i.e. my renewal.

I opened it up and got nauseous.

I'm putting the keyboard down now and getting outside today. What I saw was enough to make me wanna puke.

 

[street]

I guess if they are forced to stay if taken to court, then double or triple premiums to meet what they need from high claim areas.

I don't feel it is right for people that never make a claim then having to pay high premiums for total destruction from other parts of the US.

 

[levindb]

I also had a doubling of insurance premiums in the last 2 years. I was able to find an agent who provided a great price...the key is that different agents have different pools of companies they work with. It may be wise to call a few in your area.

Also, when I got the original quote, the standard in our area was to insure the contents of our home at 40% of the dwelling value. Since we just furnished our home in 2020, we had a pretty good idea of what it would take to buy replacements, and that 40% was way more than needed. We asked that the contents be insured to 20% and saved over $1000 in annual premium.

 

[cyber888]

This hail thing is killing our homeowner's insurance. Look, hail causes damage and can result in a claim. But the way this has changed in the last 10 years or so is out of control.

I guess I was an idiot to pay for my own roof this year.

I feel bad for you. My home insurance paid for everything after a big hail incident hit my roof. They issued me a check for $17K. I went with a 5-star rated contractor who did an excellent job and he charged me $15.9k. I still had more than $1000+ left, and spend it on a new Samsung flatscreen TV [emoji23]

 

[athena53]

I guess if they are forced to stay if taken to court, then double or triple premiums to meet what they need from high claim areas.

I don't feel it is right for people that never make a claim then having to pay high premiums for total destruction from other parts of the US.

Most large companies have subsidiaries in hurricane-prone states that write ONLY in that state. That means their entire cost structure, including premiums and reinsurance, is based only on risks in that state. (Reinsurance is "insurance for insurance companies"- basically laying off a bet- and is required and closely scrutinized by regulators who want to know the insurer has appropriate protection against catastrophes.)

I do remember a proposal for a countrywide catastrophe pool- homeowners' insurers in all states would put a % of their premiums into the pool and it would be available for natural catastrophes. It was supposed to mitigate costs in catastrophe-prone areas but of course that would be because people in Utah and Idaho were subsidizing them.

It never got anywhere.

 

[Mr._Graybeard]

I'm an Erie Insurance policyholder for home/auto/umbrella. Rates have been very stable since we switched to them about 10 years ago. I haven't had to file a claim with them yet, however.

 

[zaqxsw]

I switched from Allstate (after a decade) to Erie earlier this year on a auto, home, and boat package. Auto rates dropped over 60% with the same coverage. Home went up several hundred $ per year, but a Cadillac policy! Much more coverage than with Allstate. Total: about 50% less with better coverage. Really hard to believe...

 

[JoeWras]

I'm still trying to absorb the concept of a 40% increase I got notification for.

Questions: what is your deductible? What makes sense for a deductible in today's world?

Mine is $2500. I'm thinking of raising that, if my insurer allows. I really see insurance as a catastrophic need.

 

[Al18]

Got my renewal notice from Allstate yesterday - price dropped $1 from last year.

$2M PUP went up $100 - no claims ever. Auto went up 10%