Homeowners Insurance Quote Received - Reciprocal Exchange alternative?

aja8888

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Here in south Texas, we (my daughter) just received a quote for the homeowner's coverage on her $325,000 value home from the broker we worked with last year. They said her current coverage quote was going up significantly and they are offering less expensive coverage through:

SURECHOICE UNDERWRITERS
RECIPROCAL EXCHANGE

We have not gotten any policy to review, only a coverage sheet which lists 3% deductible for wind and hail and 1% for everything else.

We have requested a copy of the policy details to see the exclusions, etc.

What is a "reciprocal exchange" and is it safe to insure with them? Apparently, the two page document of the quote says they are state registered and legal.

Anyone insured with this kind of insurer?
 
Call your state insurance commissioner's consumer info line. Your broker should have been able to answer your questions too. Also check AM Best rating.
 
Just to be clear, those are percentages of the property value, not the damage, correct? We had a policy revised from a flat dollar deductible to a % of property value. It’s a big difference but a good tradeoff IMO.
 
Just to be clear, those are percentages of the property value, not the damage, correct? We had a policy revised from a flat dollar deductible to a % of property value. It’s a big difference but a good tradeoff IMO.
Yes, percent of property value.
 
I found their website and they are doing business in Florida and other Gulf area states. Looks like they have been around 2 years plus and are not highly rated from Weiss @ 3.3 overall.
 
What is a "reciprocal exchange" and is it safe to insure with them? Apparently, the two page document of the quote says they are state registered and legal.

Anyone insured with this kind of insurer?
You'll find more info on the SURE website.

A reciprocal is an entity owned by policy holders. Is it "safe" to insured with them? short answer, yes, but you want to make sure that unfunded liability's don't get passed to the members (policy holders). It's not likely but you asked about safety. The larger exposure is making sure that policies are protected the respective state solvency funds.

You will find fewer alternatives in coastal area's and the recip may be the best option.
 
You'll find more info on the SURE website.

A reciprocal is an entity owned by policy holders. Is it "safe" to insured with them? short answer, yes, but you want to make sure that unfunded liability's don't get passed to the members (policy holders). It's not likely but you asked about safety. The larger exposure is making sure that policies are protected the respective state solvency funds.

You will find fewer alternatives in coastal area's and the recip may be the best option.
I'm having my daughter try to get other quotes from solid insurance companies. She's NOT in a coastal area!
 
Here in south Texas, we (my daughter) just received a quote for the homeowner's coverage on her $325,000 value home



We have not gotten any policy to review, only a coverage sheet which lists 3% deductible for wind and hail and 1% for everything else.
So for wind and hail, she would pay $325K X 0.03 = $9750 before the insurance stepped in to cover wind/hail damage? Right? How much do they cover after that - everything?

No idea if that's good or bad, but sounds like a big loss up front - like about one roof full of shingles, she would have to pay for before the insurance kicked in. Again, no judgement on my part. Just trying to understand.
 
That's pretty much how the math works Koolau. Percentage deductibles for wind claims are fairly standard anymore.
 
I've had homeowners insurance with Tower Hill (through USAA) in FL for about 5 years. It became a reciprocal exchange about 2 years ago. Policyholders pay into the pot (10% of the premium price) as well as paying their premium. I read all the info when the change was presented and policyholders are not on the hook for any losses. Luckily, I have a fixed deductible ($5,000) for both the 'regular' part of my policy and the wind part of my policy. Many (most?) homeowners policies issued in FL have a percentage wind deductible versus a fixed deductible.
 
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