Home insurance rates

[whoisjohngalt]

How much, if any, your home insurance increased over the last 5 yrs?

I am trying to gauge if our increase is reasonable or I am being screwed.  I kept hearing from our agent how all the rates are going up bc of all those disasters.

They are also having a replacement value for our house much higher than our assessed value.  Again, is it normal?

yes, I will be calling around on Monday but was just curious. 

We are in New England.

[Knee Deep in Water Chloe]

Hmmm...we've been in this house for three full years. After the first year, it went up $200. After the second year, it went down $200. I don't know if they overcharged me or wrote the policy incorrectly the first or second time. I just got this year's bill and it's a $65/year increase from last year which is an 8.8% increase.

We have a 2050 square foot SFH on half an acre with a separate-structure, three-car garage on a cul-de-sac in rural PNW.  

[moneymaven]

Some of our carrier partners are taking 5-8% increases in this year alone. Over the last 5 years, we've seen average rate increases between 10-25%. If you've experienced a direct loss in that period of time, we've seen even greater increases.

Regardless, it's reasonable to shop rates every 3-5 years.

[whoisjohngalt]

yeah, ours is higher than that.  oh how I hate rate shopping..arghhh

[tskeeter]

In many places, there is no relationship between assessed value and replacement cost.  Here, we are assessed at a fraction of appraised value.  The appraised value is supposed to be market value.

there are websites that allow you to estimate replacement cost.  I've used the one by Marshall and Swift.  They provide cost estimators for the construction industry and for assessor so use.

Rather than disasters, I think increasing insurance rates are related to the increasing costs of home construction, as the housing market improves and as construction labor has been in short supply.

Since it's been several years, it would be a good idea to get quotes on your home owner's insurance from a few companies.  As insurers decide they want more, or fewer policies in a certain area, they often adjust rates to accomplish their objectives.

[msventoux]

Less than a $100 over 8-10 years.  But there's not a lot of natural disasters here. 

[happytraveler]

Since we moved into our new house 3 years ago, our homeowners rates have not increased. Keeping our fingers crossed end that the same holds true moving forward.

[gooddecisions]

I will never change homeowners insurance companies and am a loyal customer for life. I'm on a mutual assurance and pay only 15% of the premium. I have a half million dollar home, a rental property, jewelry endorsement and umbrella coverage. For all that, I pay $300/year. The premiums have never gone up, but the rates went up once- to 20% of the premium and then they settled back down to 15%. That was after a huge hurricane more than 10 years ago. Before that I had State Farm who raised rates every year. I'll never go back to a traditional insurance company.

[whoisjohngalt]

Oct 18, 2015 6:51:48 GMT -5 gooddecisions said:

I will never change homeowners insurance companies and am a loyal customer for life. I'm on a mutual assurance and pay only 15% of the premium. I have a half million dollar home, a rental property, jewelry endorsement and umbrella coverage. For all that, I pay $300/year. The premiums have never gone up, but the rates went up once- to 20% of the premium and then they settled back down to 15%. That was after a huge hurricane more than 10 years ago. Before that I had State Farm who raised rates every year. I'll never go back to a traditional insurance company.

What does it mean?  I never heard of it.

[gooddecisions]

Honestly, I don't know how popular they are elsewhere. It's not a national company and they have extremely strict underwriting guidelines which is how they can keep the annual assessments so low. Then they take those funds and invest them- which is how they are profitable. This company has been around for hundreds of years. My parents were customers and they told me to make sure once I was in my first home a year, to give them a call. They don't take new purchases (unless you're already a customer), they don't insure more than a certain percentage on the same street/neighborhood, they exclude smokers, some dog-owners, they make you replace you washer tubes to steel, and a ton of other things and then if you're lucky- they'll take you. But, once you're in, you're in. 

[Deleted]

We live in Tornado Alley but have never had a claim in the 13 years we've been here and have e increases averaging 10%/year.  Replacement is a joke; our last policy was for over twice the market value.  You collect replacement value only if your house burns down completely (rare these days) and you re-build it.  My only comfort is that,  average, all the policyholders are over-insured.  If they cut us all back to a reasonable face value, they'd still have to charge about the same amount in total to pay losses.  We just moved so our current policy face value is closer to what we paid for the house.

gooddecisions' insurer sounds like a small, local reciprocal company.  Essentially, you're all insuring each other, and there's probably some reinsurance in case of a catastrophe, which would cover a tornado, EQ, whatever local hazards exist. 

If you shop around, just be sure you know what face amount they're gong to use.  I got burned when I got a lower quote with one company and then they came back and told me the replacement cost was something insane and raised the face amount (and thus the premium).

 

[Deleted]

Mine was going up at a crazy high rate (like from $1200 to over $2400 in a few years).  That was the second time my rates had skyrocketed a few years after switching companies, so I don't know if they give teaser rates to get you to sign up or what, but I switched again this year and it dropped back to $1400.  Annoys me to have to leave, but I'm not going to spend that kind of cash just out of loyalty.

As for the insured amount being more than the assessed value, remember that in the event of total loss there's going to be a lot more cost than just replacement.  Clean-up and removal of your old house would be expensive and my insurance pays for a place for you to live while they rebuild, which could be many months. 

[Deleted]

Oct 17, 2015 23:50:29 GMT -5 tskeeter said:

Rather than disasters, I think increasing insurance rates are related to the increasing costs of home construction, as the housing market improves and as construction labor has been in short supply.

This is a big factor, too. A lot of construction workers dropped out of the market, either retiring or going into other fields, when the housing market dried up.  We looked at new construction before we downsized and found it was in the middle of nowhere, with the requisite granite countertops but cheap shortcuts like pre-fab bathtub enclosures, at premium prices.  We've also seen it in work we had done before we sold the old house as well as work on this house- you just have to expect delays because everyone is backed up.  We first brought in a company to enclose our screened-in back deck in mid-July.  They got the permits a couple of weeks ago and have now taken out all the screens and framed out the small, unenclosed extension where we'll have the grill.  The actual walls will arrive next week.  Right now we've got the ultimate "open concept":  a second-story back deck with an unobstructed view of the lake and no barriers to the steep drop-off except plastic "Caution" tape!

MPL, typically demolition costs are a separate coverage.  If you have a house with a market value of $250K and they make you insure it for a $500K replacement value, demolition and cleanup are usually 10% of that $500K, or $50K, in addition to the $500K they'd pay to replace the house.

[Tiny]

My primary house insurance seems to go up between $35 and $50 a year. Ever other year I threaten to find an new provider and magically the agent finds some way to lower my total cost between $80 and $100 dollars. I think the actual over all "insurance creep" has been about $10 a year.. I'm paying about $100 more a year than I was 10 years ago. I suspect if I never threatened to switch or didn't switch I'd be paying several hundred or more per year than I was 10 years ago. The same thing happens with my car insurance.

I switched to different insurance company 10 years ago - when my insurance jumped $250 a year and the agent tried to 'quilt' me into keeping the policy.


My insurance on the Slum in the Sun goes up about $5.00 a year. It's an already outrageous dollar amount but it's because of 'hurricanes, flooding, and mold'. It's the least expensive policy I could find.    The Slum just isn't worth that much... but, it's a rental and it's mortgaged so I have to have insurance.     ADDED:  I wouldn't really self insure it - it's just that over the course of 30 years (if I keep it that long) the cost of insuring it  will  equal or exceed  it's original purchase price.

[Deleted]

Oct 18, 2015 13:55:39 GMT -5 Tiny said:

My insurance on the Slum in the Sun goes up about $5.00 a year. It's an already outrageous dollar amount but it's because of 'hurricanes, flooding, and mold'. It's the least expensive policy I could find.    The Slum just isn't worth that much... but, it's a rental and it's mortgaged so I have to have insurance.     ADDED:  I wouldn't really self insure it - it's just that over the course of 30 years (if I keep it that long) the cost of insuring it  will  equal or exceed  it's original purchase price.

My parents have a paid-for house in North Myrtle Beach about a mile from the oceanfront.  They actually dropped windstorm coverage.  They figure the lot is worth more than the house.  It's saving them thousands of $$ a year and sounds like a reasonable decision to me.

[MarleyKeezy78]

Ours went up over two hundred dollars over the last few years. We have had no claims and have our car insurance bundled with it too, the car ins. went down a bit and home ins. went up.