Home-Owners Insurance Spike (1 Viewer)

[Chemical X]

Curious to see if others are getting pounded by soaring rates and increases. Is this tied to increasing home values or simply companies leveraging "changing climate conditions" to jump rates?

On back to back days I received renewals for my policy in Italy and my beach place on the coast of NC. My Italian policy was essentially cancelled as being obsolete and replaced with a comparable policy that saw my premium jump from just under $600- to just under $1200-. UnipolSAI issued a letter claiming atmospheric events are becoming more pronounced, necessitating the change.

My beach policy on a condo I bought in 12/2019 went from $660- to $840- to $960- and now to $1,270-.

I shopped my policy today my current carrier, Amica, with whom I have auto and main home and an umbrella policy and they quoted me $1,400-, without flood insurance, which is included in my existing policy.

 

[bcat01]

It is due to increasing severe weather events and inflation.

 

[culdeus]

Climate change coming home to roost.

 

[fruity pebbles]

Replacement cost has went way up

 

[mr. furley]

home owners and auto have gone way up for us

 

[FreeBaGeL]

My place in Florida went up approximately one gajillion percent.

 

[Sand]

Flood insurance is federal and separate, I thought.

 

[TLEF316]

I work for a large insurance company that does a LOT of high-end personal lines business (not my thing, but its a big part of what we're known for).

Materials costs for rebuilds/repairs are WAY up. And yeah....climate change is obviously a long-term problem that we have to account for in the numbers. 10 years ago, we were mostly only concerned about wind down in the hurricane zone (Florida obviously, but also the gulf and the most extreme coastal areas in the Carolinas, GA, etc.) and VERY small pockets up North. (barrier island type stuff)

Super Storm Sandy changed some of that but the years since have only made the problem worse. Now, we have to run dedicated wind models for areas that we never even dreamed about when I was getting started (on both the personal and commercial lines side of the house). The fact that we're having conversations about windstorm aggregation in places like Jersey City (just as an example) would seem crazy 10 years ago. Now, its an every day thing.

Lots of people that are REALLY good at math are using sophisticated computer models that determine we need the extra rate. The companies that didn't push rate 3-4 years ago are finding it harder and harder to fund their book and many are pulling out of certain markets (or non-renewing large portions of their book) when they can't get the rate they need to cover their nut.

 

[FreeBaGeL]

Replacement cost has went way up

This is true but I think a lot of them aren't actually increasing the coverage amount unless you explicitly ask them to write a new quote based on the appreciated home value. I bet a lot of people have coverage that wouldn't actually cover the replacement cost of their home at this point.

 

[TLEF316]

Flood insurance is federal and separate, I thought.

There is a national flood insurance program that is managed by FEMA (participating carriers essentially split the cost of any losses as a condition of doing business in certain markets). The program is deeply in-debt as the premium they've collected over the years didnt cover large recent events (Katrina and Sandy in particular)

But you can also just buy stand-alone flood insurance on your own property through your regular carrier....assuming they're willing to offer it. Its becoming harder and harder to do so profitably.

 

[TLEF316]

Replacement cost has went way up

This is true but I think a lot of them aren't actually increasing the coverage amount unless you explicitly ask them to write a new quote based on the appreciated home value. I bet a lot of people have coverage that wouldn't actually cover the replacement cost of their home at this point.

Depends on the carrier. I think you'll find that a lot of budget carriers will use lower values to keep the cost down. (often because the homeowner themselves complains about raising the limit...."my house wouldn't cost that much to replace").

One of the risks of going direct rather than through a broker. Any broker worth their salt (and the commission you pay them) will do an independent valuation of your home and recommend the proper limit you should be buying, And if they're wrong and you are under-insured in a total loss, their E&O coverage can usually make you whole.

 

[FreeBaGeL]

Replacement cost has went way up

This is true but I think a lot of them aren't actually increasing the coverage amount unless you explicitly ask them to write a new quote based on the appreciated home value. I bet a lot of people have coverage that wouldn't actually cover the replacement cost of their home at this point.

Depends on the carrier. I think you'll find that a lot of budget carriers will use lower values to keep the cost down. (often because the homeowner themselves complains about raising the limit...."my house wouldn't cost that much to replace").

One of the risks of going direct rather than through a broker. Any broker worth their salt (and the commission you pay them) will do an independent valuation of your home and recommend the proper limit you should be buying, And if they're wrong and you are under-insured in a total loss, their E&O coverage can usually make you whole.

Right but what about a home you bought 5 years ago that's been auto renewing every year?

I called State Farm in 2022 after the big price run-up and asked what the coverage on the home was and it was well short of the actual value of the home after the post covid appreciation. In order to raise it they had to completely start over on the underwriting. I had to give them square footage, materials, etc all over again as if it were a brand new property in order for them to raise the coverage to the actual real world value after the run-up. Had I not explicitly gone out of my way to ask for it there's no way they would have done all of that.

 

[Todem]

There has been massive…..massive amounts of insurance fraud that is a big factor as well.

 

[urbanhack]

Auto - I was a Geico customer for more than 5 years. They just kept increasing my rate every six months. Finally a year ago they raised it almost 20%...so I did quote from Progressive and they gave me quote similar to where I was originally with Geico or at least close. And now of course, my third six month installment was just due and it just went up 10%.

 

[Osaurus]

Homeowners insurance premium went up 67% last year because Florida. No claims ever made. I don’t live near any flood zone fwiw

 

[bcat01]

Just found out my Auto policy will go up in March between 10% and 50%. The average policy is rising 28%. This is a historically strong company that has experienced large losses the last 3 years.

 

[TheBaylorKid]

Anecdotal and dated and don’t know if this is true but from a conversation I had with a long time auto adjuster. He was talking about the auto chip shortage that was driving up repair costs but what stuck in my mind and I don’t remember which Toyota model it was but he was telling me that a certain Toyota emblem for the grill of the car regularly cost $300 dollars to replace. I asked why and he said his understanding was that there was a crash avoidance sense mounted behind the emblem and Toyota uses specific paint that reduces interference with the sensor. I don’t know if that is true but my conclusion was all the tech manufacturers cram into the cars is just going results in sky high auto premiums.

I can’t imagine the repair bill on those cars with massaging chairs.

 

[dino259]

Our home policy went from about $1100 to $1200 this year. Wisconsin

 

[FreeBaGeL]

Homeowners insurance premium went up 67% last year because Florida. No claims ever made. I don’t live near any flood zone fwiw

Yeah Florida is another world when it comes to insurance. And the property taxes aren't cheap either. We have a place in Utah and a place in Orlando with basically the same purchase price/interest rate, and our mortgage on the Orlando property is more than 50% higher.

 

[Chemical X]

There has been massive…..massive amounts of insurance fraud that is a big factor as well.

Speaking of this, my neighborhood is fairly young. Roofs are supposed to last 25 years. After a storm we are inundated with roofers offering free inspections (amazingly, 100% of the time they find an issue that requires replacement thru insurance). I've seen a multitude of roof replacements on <10 year old homes. "We work directly with your insurance".

So, am i paying for indirectly for everyone replacing their roofs? Are their premiums going up? This seems scammy, but i don't care so long as i am not affected.

 

[Gally]

Look at all you people with multiple homes and house insurance policies.......

 

[JAA]

Colluding to price fix is a real thing: https://www.cnbc.com/2023/11/01/realpage-landlords-sued-alleged-illegal-rent-hikes.html

You are getting charged what you will pay based on data the companies receive.

The article speaks to rent price fixing but you can replace "rent" with any cost you pay.

 

[titusbramble]

Auto - I was a Geico customer for more than 5 years. They just kept increasing my rate every six months. Finally a year ago they raised it almost 20%...so I did quote from Progressive and they gave me quote similar to where I was originally with Geico or at least close. And now of course, my third six month installment was just due and it just went up 10%.

At least for cars, this is partially a factor of increasing numbers of electric/hybrid vehicles. They are a LOT more expensive to repair than conventional vehicles. At least over here, there are also serious issues with the numbers of places to actually repair vehicles and supply chain issues, whether that is also the case in the US, I don't know, but may be somewhat of a factor that's also driving up hire bills. Finally, it's been possible for insurers to artificially keep premiums lower because of governments telling you not to drive because reasons over the last few years, and what would otherwise have been gradual increases have hit at once

 

[Orange&Blue]

my insurance premiums went up 10% here in Oklahoma back in July. maybe they had already priced in our natural disasters compared to other areas???

 

[Chris B.]

I work for a large insurance company that does a LOT of high-end personal lines business (not my thing, but its a big part of what we're known for).

Materials costs for rebuilds/repairs are WAY up. And yeah....climate change is obviously a long-term problem that we have to account for in the numbers. 10 years ago, we were mostly only concerned about wind down in the hurricane zone (Florida obviously, but also the gulf and the most extreme coastal areas in the Carolinas, GA, etc.) and VERY small pockets up North. (barrier island type stuff)

National carriers are also still trying to recoup losses from California wildfires of several years ago.

 

[Zow]

Anecdotal and dated and don’t know if this is true but from a conversation I had with a long time auto adjuster. He was talking about the auto chip shortage that was driving up repair costs but what stuck in my mind and I don’t remember which Toyota model it was but he was telling me that a certain Toyota emblem for the grill of the car regularly cost $300 dollars to replace. I asked why and he said his understanding was that there was a crash avoidance sense mounted behind the emblem and Toyota uses specific paint that reduces interference with the sensor. I don’t know if that is true but my conclusion was all the tech manufacturers cram into the cars is just going results in sky high auto premiums.

I can’t imagine the repair bill on those cars with massaging chairs.

Hit a deer last year in a Toyota with said emblem. Insured covered most of it, thankfully, but I can attest to the bold.

 

[Zow]

Also, what about cloud insurance?

 

[Runkle]

Everyone's saying insurance is going up. Mostly because the cost to replace stuff is going up.

 

[The Commish]

My place in Florida went up approximately one gajillion percent.

Yup....what was just over $3K for us in 2017-18 is now just under $9K but there's a lot of ineptness in this state that makes the inflationary issues just that much worse.

 

[Oracle]

Everyone's saying insurance is going up. Mostly because the cost to replace stuff is going up.

I think you might be right. Currently visiting my parents in Naples, FL and started getting quotes for a new roof as my dad did not want my mom to have any problem/ worries after he passes. Standard tile roofs are coming in at $40,000+ and metal roofs are coming in at $60,000+.

My dad was expecting those price but I haven’t been in the market for a new roof in a decade or so…so the prices surprised me.

 

[massraider]

my insurance premiums went up 10% here in Oklahoma back in July. maybe they had already priced in our natural disasters compared to other areas???

Fracking earthquake adjustments already made.

 

[FBG26]

Our homeowners premium is up 50% (2k annual to 3k annual) in MN. Have to imagine that's mostly driven by the increased construction costs. Auto premium is up from about $1.5k to $2k over the last two years as well.

Insurance, food, daycare, property taxes... the list goes on. What hasn't gone up 25-50% in the past couple of years? Other than my salary that is...

 

[Todem]

There has been massive…..massive amounts of insurance fraud that is a big factor as well.

Speaking of this, my neighborhood is fairly young. Roofs are supposed to last 25 years. After a storm we are inundated with roofers offering free inspections (amazingly, 100% of the time they find an issue that requires replacement thru insurance). I've seen a multitude of roof replacements on <10 year old homes. "We work directly with your insurance".

So, am i paying for indirectly for everyone replacing their roofs? Are their premiums going up? This seems scammy, but i don't care so long as i am not affected.

Yes we are indirectly paying for all this BS.

 

[Ministry of Pain]

Here's where we separate the rich from the middle class in here

Alright, who own's Chubb?

 

[D-Day]

Here's where we separate the rich from the middle class in here

Alright, who own's Chubb?

Dropped him in redraft

 

[TheBaylorKid]

Anecdotal and dated and don’t know if this is true but from a conversation I had with a long time auto adjuster. He was talking about the auto chip shortage that was driving up repair costs but what stuck in my mind and I don’t remember which Toyota model it was but he was telling me that a certain Toyota emblem for the grill of the car regularly cost $300 dollars to replace. I asked why and he said his understanding was that there was a crash avoidance sense mounted behind the emblem and Toyota uses specific paint that reduces interference with the sensor. I don’t know if that is true but my conclusion was all the tech manufacturers cram into the cars is just going results in sky high auto premiums.

I can’t imagine the repair bill on those cars with massaging chairs.

Hit a deer last year in a Toyota with said emblem. Insured covered most of it, thankfully, but I can attest to the bold.

That just seams ridiculous for a piece of ornamentation.

 

[TheBaylorKid]

Allstate announced earnings today

Third Quarter 2023 Results

• Total revenues of $14.5 billion in the third quarter of 2023 increased 9.8%, or $1.3 billion, compared to the prior year quarter driven by a $1.1 billion increase in Property-Liability earned premium due to higher average premiums.

Oh but they still had an underwriting loss of 414 million for the quarter.

Allstate may struggle to grow market share but analysts know they are a company that knows how to be profitable and this is like 10 or 11 quarters in a row of underwriting losses.

 

[Desert_Power]

Replacement cost has went way up

This is true but I think a lot of them aren't actually increasing the coverage amount unless you explicitly ask them to write a new quote based on the appreciated home value. I bet a lot of people have coverage that wouldn't actually cover the replacement cost of their home at this point.

Depends on the carrier. I think you'll find that a lot of budget carriers will use lower values to keep the cost down. (often because the homeowner themselves complains about raising the limit...."my house wouldn't cost that much to replace").

One of the risks of going direct rather than through a broker. Any broker worth their salt (and the commission you pay them) will do an independent valuation of your home and recommend the proper limit you should be buying, And if they're wrong and you are under-insured in a total loss, their E&O coverage can usually make you whole.

Appreciate the knowledge you've brought to this thread.

Seems like going through a good broker is the best path for insurance. I've had good results.

 

[TLEF316]

Allstate announced earnings today

Third Quarter 2023 Results

• Total revenues of $14.5 billion in the third quarter of 2023 increased 9.8%, or $1.3 billion, compared to the prior year quarter driven by a $1.1 billion increase in Property-Liability earned premium due to higher average premiums.

Oh but they still had an underwriting loss of 414 million for the quarter.

Allstate may struggle to grow market share but analysts know they are a company that knows how to be profitable and this is like 10 or 11 quarters in a row of underwriting losses.

This right here is the crux of it.

MANY insurance carriers....even responsible well thought of carriers.....price their book to a combined ratio north of 90%...and often finish north of 100%. Simply put, their premiums can't cover their losses and expenses. When you do this, you're just one bad CAT event away from a major underwriting loss for a quarter.

Most rely on investment income to turn it around and make a profit, which some do better than others. But the worse your UW results are, the more aggressive you need to be in the investment market....which obviously increases the risk of other problems.

There are other external factors that play a part too. The cost of reinsurance treaties (which get negotiated every so often) went WAY up this past year. Regular carriers need to find away to make up the gap when that happens.

 

[TLEF316]

Replacement cost has went way up

This is true but I think a lot of them aren't actually increasing the coverage amount unless you explicitly ask them to write a new quote based on the appreciated home value. I bet a lot of people have coverage that wouldn't actually cover the replacement cost of their home at this point.

Depends on the carrier. I think you'll find that a lot of budget carriers will use lower values to keep the cost down. (often because the homeowner themselves complains about raising the limit...."my house wouldn't cost that much to replace").

One of the risks of going direct rather than through a broker. Any broker worth their salt (and the commission you pay them) will do an independent valuation of your home and recommend the proper limit you should be buying, And if they're wrong and you are under-insured in a total loss, their E&O coverage can usually make you whole.

Appreciate the knowledge you've brought to this thread.

Seems like going through a good broker is the best path for insurance. I've had good results.

Once you own your home, I would absolutely recommend using a broker. Now, there are obviously good and bad ones. My dad (who is a very successful retired broker) always says "the insurance industry is plagued with mediocrity". And that's true.

Plenty of brokers are simply sales guys. They dont understand coverage (beyond the bare min. required to get their license) and rely on negotiating price to prove their worth. Dont get me wrong...there's value there for a large portion of the client base. If I'm just starting out and need to save a few hundred bucks to keep the lights on, that kind of broker can be very helpful.

If you're a 40+ year old FBG with a big, expensive home, high end stuff, fine art, etc....this is NOT what you want. Find someone that asks underwriting questions and provides advice on the coverage you need to protect the stuff you have. If he's bragging about how much money he saved you rather than explaining the coverages you're getting.....he's not the guy.

 

[The Z Machine]

lol, @ fine art.

I'm just trying to save some money for retirement and kids' college.

 

[STEADYMOBBIN 22]

Were lucky we even have insurance. All the coasts should be underwater by now. There wont be any ocean front property left in what, 7 years?

Or none of this will happen and the costs of materials and goods is through the roof due to inflation and changing the entire global marketing system.

 

[TheBaylorKid]

Allstate announced earnings today

Third Quarter 2023 Results

• Total revenues of $14.5 billion in the third quarter of 2023 increased 9.8%, or $1.3 billion, compared to the prior year quarter driven by a $1.1 billion increase in Property-Liability earned premium due to higher average premiums.

Oh but they still had an underwriting loss of 414 million for the quarter.

Allstate may struggle to grow market share but analysts know they are a company that knows how to be profitable and this is like 10 or 11 quarters in a row of underwriting losses.

This right here is the crux of it.

MANY insurance carriers....even responsible well thought of carriers.....price their book to a combined ratio north of 90%...and often finish north of 100%. Simply put, their premiums can't cover their losses and expenses. When you do this, you're just one bad CAT event away from a major underwriting loss for a quarter.

Most rely on investment income to turn it around and make a profit, which some do better than others. But the worse your UW results are, the more aggressive you need to be in the investment market....which obviously increases the risk of other problems.

There are other external factors that play a part too. The cost of reinsurance treaties (which get negotiated every so often) went WAY up this past year. Regular carriers need to find away to make up the gap when that happens.

It is a balancing act on those underwriting targets. Insurance companies run a low 90 or high 80, then you have the insurance commissioner or legislature start accusing them of not paying claims.

 

[Dr. No]

My home policy got a 50 percent spike from 2200 to 3300.

That seems absurd even when I knew it was rising.

Surely they're basically telling me to shop it right?

 

[bcat01]

My home policy got a 50 percent spike from 2200 to 3300.

That seems absurd even when I knew it was rising.

Surely they're basically telling me to shop it right?

The rate increases are approved by the state insurance department. They are losing money and are trying to react to the new challenges in insurance (weather/inflation/lawsuits). Mine was going to go up 10% and my agent was able to rewrite it with the same company under a new program with the same coverage for a 20% decrease. Only change was an increase in my deductible of $500.