Home insurance? Who is the best but cheap? Mine is going up 27%!

[Huskerguy72]

We own our home and 2 rental properties here in Kansas. Like everywhere else, rates have gone up considerably. There are many factors, as mentioned here that are causing these increases.

Prices continue to climb here. So each year when my agent determines our premium they look at what the current value is. An older rental property that was once valued at $50,000 is not valued at $125,000 due to increase in home values in general and mill levy increases. Then throw in the cost of materials per square foot of the home and the combination gets expensive.

We shop around every couple of years but have found State Farm, in our area, impossible to beat. There are also a bunch of gimmicks out there that are confusing where they promise you rate cuts if you drive perfect and all that. For rental property, if we want protection outside of general liability, we have to ensure the property at 80% of its value. We can also raise deductibles to lower premiums but it doesn't amount to much savings. Then you get into full cost replacement or depreciation where you will be left haggling with the adjustor.

I know several landlords who only purchase liability insurance on rental properties. If a hail storm comes through, they pay out of pocket from their savings and earnings. The companies also figure replacement costs based on wide spread disasters. In other words, if you have a house fire, that only affects your house and prices are not likely to go up based on that small claim. However, if you have a widespread storm like hail, tornado or the likes, then contractors will raise rates and there will be a cumulative affect in their pricing. Insurance companies take this into account.

It is getting plum nuts and I can't see any end to it. We try to keep rent prices down but when the city/county assessment goes up, the value goes up which means the replacement cost goes up and the insurance goes up as well because of the value and the materials costs. This will not end well and I fear we are all driving around on these crazy streets with people who have no insurance at all on their vehicles. When times get tough, that is the first thing to go.

 

[Mobuck]

ALL insurance coverage has gone up. 27% doesn't seem out of line. After the fire here 11/2/22, I had some real problems with loss coverage--stuff I thought was covered wasn't or only partially.
We built a new shop using a local Mennonite contractor and insured the new building for what it cost. Insurance says it's 'not covered for replacement value'. WHAT??? That's what it cost to build.
In their terms, the 'replacement coverage' should be 25%(?) over initial cost because we got a good deal on the building by scheduling for a slack time in the builder's schedule. I don't understand this logic.
Mom's Cousin was in the insurance business and even though I was maybe too wet behind the ears to follow all his commentary, the gist was any insurance company is in the game for profit so it's unlikely a customer is going to come out ahead of their game. You may get a better deal by 'bundling' but any other discount is a result of reduced coverage in some way.

 

[Johnny-Baseball]

Mobuck, I HOPE the insurance companies are in this to make a profit. And you should, too. Without that profit, insurance companies can't build the "cushion" to absorb unusually high levels of claims.

Having multiple insurance companies compete in the same market provides assurance that they will compete based on price.

In the meantime, you have full and free access to the insurance companies' statutory financial statements, which are filed with each state's board of insurance commissioners. So, you can judge, for yourself, whether a company is making "too much" profit.

 

[jav]

I got canceled from aaa home owners insurance this year been with them for 50 years not one claim no loyalty so got some GEICO home insurance got canceled in 2 months we are not even in a high risk fire zone any way hopefully this last company bamboo I think will hold on crazy good luck

 

[Bear Paw Jack]

IMHO one of the best deals on insurance, is the umbrella policy. I've had a million umbrella policy for years. May double it at some point. Right now it costs less than $200 a year for the million $ policy.

 

[Kevin]

You could always increase your deductible on the homeowner's insurance. That would lower the payments.

 

[Star43]

Did you know that homeowner insurance (HOB-T) policy premiums are regulated by each state's State Board of Insurance Commissioners? Individual insurance companies can offer discounted rates (the practice is called deviating), which is why individual companies can each offer rates that differ from others.

For those who complain about the self-insurance deduction - on a replacement roof, for example - you can pay a larger premium to eliminate or reduce that self-insurance deductible.

Same for basic coverage: you can pay for the value of the house as of the date insured, or you can pay for "replacement cost" coverage. It's your choice, of course. But your plans for continuing to live in the house, or perhaps selling it in the near future, should impact that decision. Same rules apply to roof replacements, fence/gutter replacements, etc.

Finally, some insurance companies have the "nasty" habit of ceasing to write new/replacement business in a state after a round of natural disasters (tornados, hail, etc.). When they leave, you're often left holding the bag, because the next insurance company you deal with might be very reluctant to offer replacement cost coverage on (for example) your home's 17-year-old roof. By contrast, the carrier who continues to write your business year-after-year would be more inclined to continue to offer that replacement cost coverage.

The insurance agent is truly that - go-between between you (the buyer) and an insurance company. Independent agents deal with multiple insurance companies and thus can help you shop for the best fit. An agent who reps for only one insurance company is unable to do this.

Any insurance agent who attempts to sell you "only" on the annual premium, without first going through all of the variables, is NOT doing you a service.

My late father was a property/casualty insurance agent for 40 years. He taught me the messy details.

Johnny (hope you like the Red Sox) , your father taught you very well about insurance. Sounds like he knew his stuff. I am a Long time commercial agent and broker in CA, and the Insurance industry is in real trouble here. The companies, a lot of them, and the major carriers are gone or leaving. What used to be, and how things went are are much different now. If he were still alive, he would be banging his head on the wall as I do daily. I want to retire in 6 months. I should have retired years ago, but stayed to try to help my long time clients get coverage, and decent coverage. Every state as you mentioned is different, but I would recommend on a whole for people not to jump too fast without checking things out correctly. Do NOT just cancel what you currently have, without having something better to go to. Hopefully you have a good agent to discuss this and try to pick his brain to figure out what is best for you and your family. As mentioned earlier here or another post as I looked at most all of them. 27% is not a big increase in today's market place. Especially if it is an Admitted highly rated carrier. A lot of folks may jump to save a few bucks but if the coverages are far less, and something happens, you just screwed yourself. Be careful before you do anything at all. There are a lot of people who cannot get insurance now. I feel bad for them and try to help them best I can, but it very different now these days. Not like it used to be.... Biggest reason here in CA is too many claims. There have always been accidents and thugs & vandalism, but today the homeless problem is causing a lot of stupid and costly claims and that is what is turning the numbers upside down. Think twice and check things out before making changes.

 

[bowzette]

We also live in Florida and this is what we'll do next.

Here's another solution.

Pay off your house, cancel storm coverage, and bank the cost you would have paid in storm insurance AND the monthly price of your mortgage. Insure your home for liability, theft and fire. Down here the biggie cost adder is storm and flood damage

 

[Johnny-Baseball]

Many purchased homeowner's insurance because they were contractually obligated to do so in order to obtain a mortgage loan, and the mortgage loan agreement obligated the homeowner to continue to buy such insurance for so long as they owed money on that mortgage loan. BUT...

Lenders only require coverage sufficient to pay off the mortgage (i.e. in the event of a total loss due to fire, weather, etc.). At a time when home prices (and replacement costs) escalate dramatically, as is the case over the last 4 or 5 years, some homeowners chose to keep their original coverage amount. They don't increase the $ amount of coverage to fully pay for re-building/repair of the destroyed/damaged home. For them, the nasty surprise comes when the insurance pays off the damages. Because the mortgage lender gets paid first, and the homeowner gets what's left over - if any.

In prior years, unscrupulous insurers/insurance agents persuaded the homeowner to buy sufficient insurance coverage to pay for the full value of the house (e.g. purchase price of the home). The problem was that the "full value" included the land/lot costs - and land is almost never damaged by a casualty loss. So, the homeowner was buying coverage that he'd never collect on. Why would an insurance agent do this? Because the agent's commission was a percentage of the insurance premium. The bigger the premium, the bigger the agent's commission.

While those days are mostly gone now, such gouging still occasionally occurs.

The moral of that story is to be smart about homeowner's insurance coverage needs, and never do business with an agent who'd do such things. Figure out how much of the home's value is lot cost and subtract that from the total value of the home. Alternatively, purchase only enough insurance to pay for the cost of rebuilding the house.

 

[Star43]

One needs to have replacement cost coverage on their policy. Always try for that. You want to stay away from ACV if possible......Coverages mean the most in insurance. Sure the price of the coverages are very important, but if you are buying "insurance".....make sure what you are buying is worth what you are paying. But again, everything is different today and our choices are not nearly what they used to be, so again, be careful before you make any changes .....Also watch out for the banks. Banks only care about their loans and they really do Not care about you. Mortgage insurance is best example of that. The insurance you are buying thru the bank usually mainly protects the loan mortgage, not you !!

 

[peachhead]

I have State Farm here in GA for everything. I check around periodically but have never been able to beat them unless giving up something. I also have an umbrella policy.
For the past couple of years I have been getting letters in the mail from Allstate agents all over the state trying to get my homeowner's business.

 

[Star43]

I have State Farm here in GA for everything. I check around periodically but have never been able to beat them unless giving up something. I also have an umbrella policy.
For the past couple of years I have been getting letters in the mail from Allstate agents all over the state trying to get my homeowner's business.

Stay with State Farm if you can IMO.

 

[Enigma]

I have been insurance shopping for the past week. USAA wants $14K+ to insure my home; Geico wants $15K; most others want at least $7 or $8K. That's right, over $14,000 for homeowners insurance for ONE YEAR. I live in a fairly affluent area, but kiss my grits!~ That is absolutely outrageous! I guess that they are trying to force everyone out of the area, and they want uninsured squatters to move in. We might have a bonfire here, you just never can tell what will happen on July 4th, with all them fireworks going off.

 

[Star43]

I have been insurance shopping for the past week. USAA wants $14K+ to insure my home; Geico wants $15K; most others want at least $7 or $8K. That's right, over $14,000 for homeowners insurance for ONE YEAR. I live in a fairly affluent area, but kiss my grits!~ That is absolutely outrageous! I guess that they are trying to force everyone out of the area, and they want uninsured squatters to move in. We might have a bonfire here, you just never can tell what will happen on July 4th, with all them fireworks going off.

Well don't do that. Check with AAA ??

 

[Jeepnik]

I've had State Farm auto since 1977 and home since 1979. Never had any issues.

What dis change is that after having three generations of a family as my agent when the last one retired I was "assigned" an agent.

She's not bad, but the long term relationship is gone.

 

[Star43]

I've had State Farm auto since 1977 and home since 1979. Never had any issues.

What dis change is that after having three generations of a family as my agent when the last one retired I was "assigned" an agent.

She's not bad, but the long term relationship is gone.

Yeah, that happens. Good luck with this one.

 

[Bear Paw Jack]

Star is right about CA I just heard that State Farm is pulling out of much of CA. One less choice.

 

[Star43]

Star is right about CA I just heard that State Farm is pulling out of much of CA. One less choice.

In CA, for anyone reading this in CA.......what these companies like State Farm, etc. on the personal lines side OR the Commercial lines side which I am very familiar with. Companies like Nationwide that pulled out, And other companies like Travelers, Amtrust, Liberty Mutual, etc. They may be still here but they are taking on no new business. They may stay on your policy as long as you pay the bill, but if you let in cancel for non-pay, the companies (especially Travelers) will NOT reinstate you. Your policy is now dead and you cannot bring it back. It's gone. Not only are you without insurance, but when you look for another company, when they ask for loss runs, the lapse of coverage will show. All very bad for you. That is why I said to keep your existing policy going until you find something better. The difference of personal lines and commercial lines is that historically personal gives you 30 days grace period before cancellation ...In commercial lines, there is NO grace period at all. If you have any questions your policy or bill, call your agent, and hopefully he is a good agent to help you.

 

[Jeepnik]

In CA, for anyone reading this in CA.......what these companies like State Farm, etc. on the personal lines side OR the Commercial lines side which I am very familiar with. Companies like Nationwide that pulled out, And other companies like Travelers, Amtrust, Liberty Mutual, etc. They may be still here but they are taking on no new business. They may stay on your policy as long as you pay the bill, but if you let in cancel for non-pay, the companies (especially Travelers) will NOT reinstate you. Your policy is now dead and you cannot bring it back. It's gone. Not only are you without insurance, but when you look for another company, when they ask for loss runs, the lapse of coverage will show. All very bad for you. That is why I said to keep your existing policy going until you find something better. The difference of personal lines and commercial lines is that historically personal gives you 30 days grace period before cancellation ...In commercial lines, there is NO grace period at all. If you have any questions your policy or bill, call your agent, and hopefully he is a good agent to help you.

Funny, just today I got an ad from State Farm wanting me to buy insurance. It must be a mass mailing as I already have State Farm.

 

[Star43]

Funny, just today I got an ad from State Farm wanting me to buy insurance. It must be a mass mailing as I already have State Farm.

I would think that since you are existing client, you got a mailer. A lot of times companies like State Farm, All State, Farmers, etc will send out ads to try to round out the account. Meaning if they do your auto, they'll try to do the home too. I have heard they are not taking on new customer clients. Also they may not reinstate if you are late. Pay the bill to keep your account current. Don't let it cancel for non pay.