Homeowner's Insurance up 20%!

[kbletzer Senior Member Find all posts View Profile Close kbletzer]

Just received our renewal in the mail. It went up a whopping 20%. OK so I call to see if this is negotiable as we have been with them for years and have never had a claim, pay timely etc.
Agent tells me that the only thing they can do is to change my deductibles.

I'm not comfortable with this option.

Now I know I can shop around (which I will do now) but this is a pain.
So I ask why the increase. She tells me "Katrina, the recent tornados, hurricane season is here and she just sounded like your typical timeshare salesperson giving me the pitch.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

Insurance companies are in the business to make a profit. If there are significant storms around the country, especially in an area in which you live, you can bet the claims will be higher and your premiums will go up. In my neighborhood, everytime a piece of hail hits a roof, no matter how small, someone is getting a roofer up on their house to claim damage and replace the original roof put on by the builder (who didn't do the best job from what I've seen over the past 10 years). These "claims" have taken our insurance rates from just under $600/year 10 years ago to over $1,200/year now. Granted the value of the house has gone up as far as replacement cost but a significant portion of that 100% increase comes from the number of claims filed. I look for another significant increase with our next renewal as we've had 4 or 5 hail storms in our area plus a number of tornado's in the midwest.

More claims, higher premiums. That's just the way it goes.

[The Conch Man Past Goumba President & BigFrank's Cigar Buddy! Find all posts View Profile Close The Conch Man]

This is real funny, ours went down & lower than it was in 2006. We are back to our $1,000 deductible & 2% hurricane deductible from the year before after I had to raise both deductibles to $2,500 & 5%! Our cost is bout $1,500 per year & we are still with the same company when we moved here in May of 2005. It amazes us how these insurance companies can do what they want at any given time!

[GrayFal Silver Contributor and supermoderator Find all posts View Profile Close GrayFal]

My husband keeps waiting for the cancellation notice in the mail.....many homeowners on Long Island are getting notices that they are not going to be renewed I live 1.5 miles to the ocean, but less then 1/2 mile to the nearest bay.

And our mortgage holder just notified us that our monthly escrow is going up $400 a month for increased taxes/insurance....

[kbletzer Senior Member Find all posts View Profile Close kbletzer]

Insurance companies are in the business to make a profit. If there are significant storms around the country, especially in an area in which you live, you can bet the claims will be higher and your premiums will go up. In my neighborhood, everytime a piece of hail hits a roof, no matter how small, someone is getting a roofer up on their house to claim damage and replace the original roof put on by the builder (who didn't do the best job from what I've seen over the past 10 years). These "claims" have taken our insurance rates from just under $600/year 10 years ago to over $1,200/year now. Granted the value of the house has gone up as far as replacement cost but a significant portion of that 100% increase comes from the number of claims filed. I look for another significant increase with our next renewal as we've had 4 or 5 hail storms in our area plus a number of tornado's in the midwest.

More claims, higher premiums. That's just the way it goes.

OK...so I understand that they are in the business to make money. That is why they take my money and invest it properly and on the off chance that we do have a loss we make a claim.
I also understand that possibly the rate increasing slightly due to economy issues, but home values are on the decline which means replacement costs are on the decline, my tax assessment went down- not up, we do not live in an area that has had any significant damage lately so no claims to make up for. We went through the same situation last year with this company. They go up an average of 20% and I do not feel it is a reasonable increase.

[brother coony Senior Member Find all posts View Profile Close brother coony]

Dont Jump from frying pan to the fire, A new company can rite you a new policy and then cancel with in 30 to 60 days because they dont like the looks of your sidewalk, roof ect. and your old co. might not rerite

insurance has nothing to do with the value of a house, Its what it would cost to replace with like kind and quality,
a 2000 sq.ft.house cost the same to build in a low income area or high income area,not a penny more
but will value and sell for a lot more in the high income area

building materal including concret as has jump in price

[Fern Senior Member Find all posts View Profile Close Fern]

Adding to what the last person said, try to get somebody at the insurance company to explain how they arrived at a value for your house. If they say it is what your house would sell for, that's not the right amount. The right amount should be arrived at by multiplying the square footage of your house by the prevailing construction rate for houses (it is a composite building rate the insurance company should have access to). THAT figure is what you should be insuring for. This is especially important in areas where property value is high because of location. Land doesn't burn, and shouldn't be insured.

If your house was new when you moved in, you got a discount for new construction. It could have been 20% or more. This decreases gradually over the years.

If your auto insurer insures houses as well, check with them. Frequently you get a discount for multiple policies. Also check that you are getting all the discounts/rate reductions you are entitled to, like burglar alarm, fireproof roof, etc.

Fern

[1950bing Senior Member Find all posts View Profile Close 1950bing]

You can manage your own escrow. I did that when I did a refinance at no extra cost. I just told them I would manage that because I felt I was getting nothing for letting them use my money. No problem.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

You think that's bad? When I first built my house in Florida, my homeowners insurance was $4900 per year. I thought that was highway robbery since my homeowners insurance on my house in New Jersey was only $800.

So, when it went up to $6900 in two years, I almost had a cow.

That cow would have been a golden goose if I got that rate now. My homeowner's insurance for the same home today is a whopping $11,900 per year.

Hopefully, this will make you feel better about your own situation.

[vintner Super Moderator Find all posts View Profile Close vintner]

Note to self...Do not move near ocean, you can't afford it.

[kbletzer Senior Member Find all posts View Profile Close kbletzer]

Note to self...Do not move near ocean, you can't afford it.

Well I do live near the ocean and we don't pay anything near as high as BocaBum. Ours is about 2,000. per year. We live in a nice neighborhood about 1.5 miles from the ocean at Sandbridge Beach. It just seemed like a big increase.....didn't mean to whine! I'll have a glass when I get home

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

I recently changed insurance for both the auto and home and saved $ 400. When I cancelled my insurance they seemed to want to renegotiate -- I guess I was paying more than they would have settled for. It's a good idea to check rates every few years- what got me going was a 17% home policy increase..

[buff Senior Member Find all posts View Profile Close buff]

I moved into my new house 2004 in a high end area. All State was charging me 4200 with a company located in St Petersburg. Name escapes me.

I am now paying 1400 a year with another company Royal Palm Beach

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

This is real funny, ours went down & lower than it was in 2006. We are back to our $1,000 deductible & 2% hurricane deductible from the year before after I had to raise both deductibles to $2,500 & 5%! Our cost is bout $1,500 per year & we are still with the same company when we moved here in May of 2005. It amazes us how these insurance companies can do what they want at any given time!

Actually, they can't. Any rate increase or decrease goes though the state's insurance comissioner for approval. I believe all state work in this manner but, since I was never licensed in all states I could be wrong.

I know that the FL Gov. was working on legislation to ease the burden to FL residents. I remember reading something about that and thinking, if they're not careful, they'll chase insurance companies out of the FL marketplace. Perhaps a compromise was reached, perhaps a few companies have left the state or perhaps the actual payout of claims wasn't as high as expected.

[JWC Super Moderator Find all posts View Profile Close JWC]

OK...so I understand that they are in the business to make money. That is why they take my money and invest it properly and on the off chance that we do have a loss we make a claim.
I also understand that possibly the rate increasing slightly due to economy issues, but home values are on the decline which means replacement costs are on the decline, my tax assessment went down- not up, we do not live in an area that has had any significant damage lately so no claims to make up for. We went through the same situation last year with this company. They go up an average of 20% and I do not feel it is a reasonable increase.

Replacement cost is not linked to the market value of your home. The replacement cost is generally based on the square footage of your home multiplied by the average construction cost per square foot in your area. We bought our home new in 2002. The market value of the home increased about 80% at the peak in late 2006 and has since dropped about 35%. Replacement cost has risen since 2002 but is still much lower than the market value.

My homeowners insurance has increased a total of 20% over the past 5 years and is now $873 /year. I just received my renewal notice a couple of weeks ago.