Homeowners Self Insurance

[StillHacking]

Success

Well, there is good news. I found another agent that will insure with Citizens at a price surprisingly comparable to my canceled policy with Fed Nat. My current agent was hung up on me getting another 4-point inspection. Not being in FL at this time it would have been a pain to accomplish this before the deadline. My new agent was fine with my wind mitigation report from 3/21. I may have jumped the gun on self-insurance but this has been a wealth of information and insight. The peace of mind is what insurance is for even when there are of course out of pocket and other unpleasantness with any debacle. At my leisure, I will explore liability and or blanket policy coverage and maybe consider self-insurance in the future. Thank you all for the input.

 

[ncbill]

Not sure if we could have avoided it... it may have been that the replacement was forced by the insurer rather than the state... IOW, the buyer could not get home insurance until the panel and breakers were updated. I didn't fight it too much as the cost wasn't very significant compared to the selling price.

Federal Pacific & Zinesco panels (& Sylvania-branded panels made by Zinesco) should be replaced ASAP:

https://passionelectric.com/3-electrical-panel-brands-that-need-upgrades/

 

[HMMY]

We had to get a new homeowner's policy for my parents in Florida. No one would insure the roof since it hadn't been replaced since the house was built in 1979. There was a leak in the bedroom. We ended up getting a dwelling only policy that covered fire and hurricane with a $2,500 deductible for all perils and $4,440 deductible for hurricane. The insurance company required us to update the electrical panel and the City required us to run a 4th wire to the panel to be up to code (total cost $3,500). We just replaced the roof ($15,000). It will only reduce our premium by $400, but the roof will be covered. I would never move to Florida.

 

[Rambler]

OK gang, I don't post often but sincerely appreciate the depth of knowledge shared here. Anyhow My savings and assets are strong, so even with current market turbulence DW and I should be fine unless there's an apocalypse.
My primary house in Pennsylvania is paid for and insured. Second house in Florida is also paid off and I have been informed my insurance will be canceled by the end of next month.
There is pushback on the life expectancy of the roof as I shop for new policies. Roof is tile and in good shape as per a 4 point and wind mitigation inspection on 3/1/2021. Anyone in Florida knows they are sticklers on roof lifespan and inspections. Unoccupied houses scare them too. we visit for almost 6 months throughout the year. Zillow and such values the FL home at 492K but in my opinion it's worth only half that. If I had to replace it even at 500K it would be unpleasant but I could do it. I have quite a bit of cash on hand.
I feel self-insurance might be a good idea at this point perhaps with an umbrella policy for personal injury as a backup. House has been there since 1969 with no claims that I know of since 1992. Certainly nothing catastrophic ever.
Your input on this would be appreciated.

As far as I know, an umbrella policy is worthless without primary insurance. My umbrella insurance requires my homes, autos, and RV be insured to max available liability before the umbrella would kick in. I agree that, other than liability, as unpleasant as it would be, I could rebuild my house with what I have…but there is no way I’d survive a $5million liability suit without the primary and umbrella liability insurance.

 

[HMMY]

As far as I know, an umbrella policy is worthless without primary insurance. My umbrella insurance requires my homes, autos, and RV be insured to max available liability before the umbrella would kick in. I agree that, other than liability, as unpleasant as it would be, I could rebuild my house with what I have…but there is no way I’d survive a $5million liability suit without the primary and umbrella liability insurance.

Yes, my umbrella requires a minimum $300k liability under homeowner's policy and purchase of liability when renting a car (we do not own a car); otherwise, umbrella does not kick in.

 

[street]

I took my home/auto/umbrella policy a few days ago to State Farm to give me an apple-to-apple quote on the same coverage I have now. Haven't heard anything back yet to see if they can do better. I had a few questions for them to answer if I do switch to SF.

 

[Buckeye]

I've heard for several years that Florida homeowner's policies are dicey because of the hurricane threat. Basically, the market in Florida is broken.

But, even in my home state, the advice from insurance brokers is to take the highest deductible you can get, since even a small claim could trigger a non-renewal action on the part of the insurance company. That could easily cost you more than paying a few small losses out of pocket.

My understanding is the big driver of homeowners insurance cost right now is the roof replacement scam which scams the insurance company and not the homeowner. I know there are multiple homeowners in my neighborhood who have participated in this scam and my next door neighbor was being solicited to do the same before I commented that we both knew there was nothing wrong with her roof and she would become part of the homeowners insurance problem if she participated in this BS. A roofing salesman comes to you and says, "Looks like your roof has some wind damage and needs to be replaced. Yes, it's in year 19 of it's 20-year life but you can get it replaced for only the cost of your deductible. We'll take care of everything with the insurance company." Some of the roofing companies inflate the cost of the roof/insurance claim and the homeowner pays nothing. One neighbor was crowing on our neighborhood Facebook page about getting her roof replaced for free. After a few comments were made she deleted the post because she started to understand she had just participated in an insurance scam.

If the insurance company fights the claim, there is a stable of lawyers ready to sue. The insurance companies are getting buried in lawsuits. I think I read that 90% of all homeowners insurance lawsuits are in Florida. The FL legislature just had a special session to address the issue since they were very busy on culture war stuff during the regular session that recently finished. I think they made it illegal for a roofing company to pay a homeowner's deductible, insurance companies now have the option to offer reduced coverage on roofs, some limits on attorney's fees, and a few other things that are intended to reduce the roof replacement scamming and the payouts from lawsuits.

 

[MichaelB]

Well, the Florida legislature just passed a homeowners insurance reform bill. It limits lawsuits and attorney fees, and creates a reinsurance fund of $2B for underfunded and struggling insurers. It doesn’t do much else. A summary can be seen here. It’s late, hurricane season starts next week and insurers will be reluctant to write new policies.

If the cost of lawsuits and attorney fees are indeed the driving force behind the high rates and insolvent insurers we should expect to see a major reduction in premiums next year. I’m very skeptical and am reminded that health care and insurance lobbies made similar claim for years, but states that implemented tort reforms saw no real difference in health care costs as a result.

 

[athena53]

As far as I know, an umbrella policy is worthless without primary insurance. My umbrella insurance requires my homes, autos, and RV be insured to max available liability before the umbrella would kick in. I agree that, other than liability, as unpleasant as it would be, I could rebuild my house with what I have…but there is no way I’d survive a $5million liability suit without the primary and umbrella liability insurance.

I wouldn't say "worthless" but many insurers, as in your case, require underlying coverage. Let's say you need to have $100K per person on your Homeowners liability. The umbrella attaches after that. If you somehow got away with NOT carrying the $100K coverage you'd be on the hook for that first 100K. It also means the insurance company is unlikely to bother defending the claim if they think it will settle for under $100K- they have no skin in the game. OTOH, if you have the first $100K insured with them, they'll throw their best adjusters and lawyers on it.

 

[Buckeye]

Well, the Florida legislature just passed a homeowners insurance reform bill. It limits lawsuits and attorney fees, and creates a reinsurance fund of $2B for underfunded and struggling insurers. It doesn’t do much else. A summary can be seen here. It’s late, hurricane season starts next week and insurers will be reluctant to write new policies.

If the cost of lawsuits and attorney fees are indeed the driving force behind the high rates and insolvent insurers we should expect to see a major reduction in premiums next year. I’m very skeptical and am reminded that health care and insurance lobbies made similar claim for years, but states that implemented tort reforms saw no real difference in health care costs as a result.

You might also throw in the cost of the roofing replacement fraud that fuels the lawsuits. I know that is real. I have seen it happening in my own neighborhood. Insurance companies are paying out $15,000-$20,000 roofing claims (well, that was before the latest escalation in material costs) that should have been $0. I have seen what I consider to be 3 fraudulent replacements in a 3 block area so the bleeding over the entire state has got to be significant.

 

[MichaelB]

You might also throw in the cost of the roofing replacement fraud that fuels the lawsuits. I know that is real. I have seen it happening in my own neighborhood. Insurance companies are paying out $15,000-$20,000 roofing claims (well, that was before the latest escalation in material costs) that should have been $0. I have seen what I consider to be 3 fraudulent replacements in a 3 block area so the bleeding over the entire state has got to be significant.

I also know it exists because it happened to my neighbor. Some of this is mitigated by roof inspections and premiums rise sharply for older roofs, so I’m not sure how much this impacts the overall cost of insurance in Florida. It is more difficult to address, and I expect that’s why it was not included in this insurance reform effort.

 

[JoeWras]

Oh the roof hail chasers are in full force around here. Pea sized hail is doing massive damage. /sarc

It is killing us all.

 

[dm]

My insurance cost have doubled in the last two years. I was with St. John’s and they went under, now with Slide. But the value of my house has also doubled, I’m just glad that my taxes are held due to homestead rules.

I recently talked with my insurance agent about my roof, many homes around me have sold and required new roofs for insurance purposes. I purchased my home two years ago and it was not a issue, but it is 18 years old now. I was told that they would currently go 30 years for a tile roof. But that could always change, less so if I don’t change insurers.

 

[Buckeye]

Yes, my umbrella requires a minimum $300k liability under homeowner's policy and purchase of liability when renting a car (we do not own a car); otherwise, umbrella does not kick in.

Does the umbrella insurance never kick in or only after you cover the first $300,000 out of pocket?

 

[Stormy Kromer]

As far as I know, an umbrella policy is worthless without primary insurance. My umbrella insurance requires my homes, autos, and RV be insured to max available liability before the umbrella would kick in. I agree that, other than liability, as unpleasant as it would be, I could rebuild my house with what I have…but there is no way I’d survive a $5million liability suit without the primary and umbrella liability insurance.

You don't have to insure your house to get an umbrella. You can solve this by getting a renter's policy (HO-4) on your contents that includes personal liability to meet your underlying requirements for your umbrella. Easy and cheap.

 

[FLSUnFIRE]

You don't have to insure your house to get an umbrella. You can solve this by getting a renter's policy (HO-4) on your contents that includes personal liability to meet your underlying requirements for your umbrella. Easy and cheap.

I tried that several years ago and my insurer said they couldn't sell me a renters policy on a house I owned. (iirc due to state regulations to "protect me")

 

[ncbill]

I wouldn't say "worthless" but many insurers, as in your case, require underlying coverage. Let's say you need to have $100K per person on your Homeowners liability. The umbrella attaches after that. If you somehow got away with NOT carrying the $100K coverage you'd be on the hook for that first 100K. It also means the insurance company is unlikely to bother defending the claim if they think it will settle for under $100K- they have no skin in the game. OTOH, if you have the first $100K insured with them, they'll throw their best adjusters and lawyers on it.

Stand-alone umbrella issuers like RLI simply charge different premiums based oil the amount of your underlying coverage...their cheapest premium is for those with $500k of underlying coverage.

 

[StillHacking]

Last update

So, I had to get another 4-point inspection to insure. A little over a year ago the main roof had a supposed life expectancy of 3 years, the current inspection is 5. The problem is the secondary roof was given only 2 years, so it needs to be replaced before they write a policy.

I'm throwing in the towel and self-insuring. With the high deductibles for the hurricane component, it makes a good case to just have a large repair fund for any debacle. I have had it with Florida inspectors, insurance companies, and trying to deal with things remotely.

Thanks for letting me vent.

 

[HMMY]

So, I had to get another 4-point inspection to insure. A little over a year ago the main roof had a supposed life expectancy of 3 years, the current inspection is 5. The problem is the secondary roof was given only 2 years, so it needs to be replaced before they write a policy.

I'm throwing in the towel and self-insuring. With the high deductibles for the hurricane component, it makes a good case to just have a large repair fund for any debacle. I have had it with Florida inspectors, insurance companies, and trying to deal with things remotely.

Thanks for letting me vent.

Rather than fully self-insuring, why don't you get coverage that excludes the roof. You will still be covered for fire and other insurable events. Before we replaced the roof, that's what we did.

 

[Buckeye]

So, I had to get another 4-point inspection to insure. A little over a year ago the main roof had a supposed life expectancy of 3 years, the current inspection is 5. The problem is the secondary roof was given only 2 years, so it needs to be replaced before they write a policy.

I'm throwing in the towel and self-insuring. With the high deductibles for the hurricane component, it makes a good case to just have a large repair fund for any debacle. I have had it with Florida inspectors, insurance companies, and trying to deal with things remotely.

Thanks for letting me vent.

Do you have a monitored security system? We use Ring which has entry sensors and we bought integrated smoke detectors. The fire department will be called even if we are not home.

 

[Koolau]

Do you have a monitored security system? We use Ring which has entry sensors and we bought integrated smoke detectors. The fire department will be called even if we are not home.

Reminds me of the Tom Hanks Movie "Larry Crown." Larry waits while his new love interest turns off the alarm when entering her house. She mentions she has only 60 seconds to put in the right pin to turn of the alarm or else the police will be there in 30 minutes.

Are you charged for false alarms?

 

[StillHacking]

No alarms. Thieves would be disappointed. I'm just done trying to orchestrate inspections, estimates, and repairs from out of town. Perhaps I'll revisit this on my next visit. The latest quote had an $11,500 deductible for hurricane damage. I can do quite a bit of repair for that. Over 30 years and NO claims or damage. Insurance companies are not your friend.