the most cool guy said:

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I am seriously considering getting rid of my homeowners insurance and saving $4,500 next year. The only real threat to my house is hail, and I guess possible fire hazard. I'm not sure that's worth the yearly cost.

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I actually do self-insure property risks on some things I own.

The main reason I probably won't do that on my house (other than my wife raising hell about it) is due to the personal liability coverage that a homeowner's policy offers.

When the trick-or-treat children of a slip-and-fall lawyer hurt themselves on my front steps on Halloween, I want an insurance company's defense counsel on my side.

Maybe someone offers a 'General Liability' policy for your residence, but I haven't heard of it.

Ribeye-Rare said:

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the most cool guy said:

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I am seriously considering getting rid of my homeowners insurance and saving $4,500 next year. The only real threat to my house is hail, and I guess possible fire hazard. I'm not sure that's worth the yearly cost.

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I actually do self-insure property risks on some things I own.

The main reason I probably won't due that on my house (other than my wife raising hell about it) is due to the personal liability coverage that a homeowner's policy offers.

When the trick-or-treat children of a slip-and-fall lawyer hurt themselves on your front steps on Halloween, I want an insurance company's defense counsel on my side.

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I am a trial lawyer and could drag out the litigation so long it would end up costing them more than they ever get out of me. That's actually the one part I'm not concerned about.

As others have stated, many carriers jack up rates to simply get people off the books. They realize they are carrying more liability than they feel comfortable with, but don't want to send out blanket non-renewal letters. It is better business (for them) to send out large increases and see who sticks it out anyway. They make similar money with less exposure.

Home insurance just has to be shopped, unfortunately. The current status of building costs is just too volatile for insurers to feel comfortable. I've seen multiple claims require a true replacement cost well above the stated replacement cost on the policy. How much of this is legit and how much of this is contractors getting a pay day? Not sure. But the fact is it is happening.

Farmer_J said:

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Contractor told me that the days of getting a new roof 100% paid for after a hail storm is over. Insurance going to pay net depreciation only.

New housing going to get smaller

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Glad I managed to get mine replaced a couple of years ago.

titan said:

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What is the alleged "basis" for double size increases? Some nutty thing like there are "more storms" based on bad science? Or is the number of claims being turned in? But still -- for the home, where its not the value as some of you pointed out ---how are they justifying doublings?

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Old post by me:
What, if anything, to do about insurance companies? - Page 2 | TexAgs

Quote:

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Rate Increase = (Non-cat Loss ratio + Cat Loss ratio + Fixed Expense Ratio)/(1 - Variable Expense Ratio- Profit Provision) - 1

Inflation tells part of the story for non-catastrophe losses. Variable expense isn't affected by inflation. Fixed expense is affected by it. Catastrophe losses are another thing.

Catastrophe loads are put into the ratemaking process. Depending on the company it takes somewhere from a 10 to 20 year average of the losses incurred adjusted for inflation and other trends. Seemed like the Gulf Coast was taking a major hit every 10-15 years. From 2005 until now, there's been a huge uptick in major storms making landfall along Katrina, Ike, Harvey, Irma, Matthew, Michael, Laura, etc. Not only that there's more tornado activity/damage along Dixie Alley as well as more hail damage.

Combine that with the tight reinsurance market, companies are retaining more risk (or paying more in expenses to maintain the same risk tolerance). One of the reasons for reinsurance is to stabilize loss results. With the lack of stability, more profit has to be made to cover for the instability. So we have a larger numerator and smaller denominator for a much larger rate increase than usual.

Insurance companies can get away with a lower profit provision IF the market is doing well, so they have some investment income, but that's not the case at the moment. This is how workers comp can be profitable because they depend on investment income to support that line of business since it's long tailed. Property lines are short tailed so not as much investment income. Also, inflation would totally eff over companies that got hit with a big loss and needed to sell some of its portfolio. The bonds are priced at book value on the balance sheet, but they're worth less because of inflation, so companies would be taking loss if they needed to sell bonds.

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Logos Stick said:

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the most cool guy said:

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I am seriously considering getting rid of my homeowners insurance and saving $4,500 next year. The only real threat to my house is hail, and I guess possible fire hazard. I'm not sure that's worth the yearly cost.

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$4500 per year is cheap compared to a $450,000 home lost to fire. JMHO

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Thinking about taking my chances. I like my odds with house fire.

We are pretty much only at risk from hail or wind.

If our home in Cypress ever floods, this entire region is toast and thousands of lives will have been lost in Houston area alone...we are very high up.

My premium is $2,378 is that good on a $600,000 home?

TommyBrady said:

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My premium is $2,378 is that good on a $600,000 home?

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Geez, that is incredible. Ours is $2,300 on a $440k home. Zero flood risk, unless an old testament level flooding event ever occurs again. Where are you?

Vestiges if liberal failure

TommyBrady said:

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My premium is $2,378 is that good on a $600,000 home?

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Is your house made out of straw?

Celina/Prosper North of Dallas

USAA insurance

No Spin Ag said:

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NoahAg said:

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Insurance companies.

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No, put the blame where it truly belongs: the lobbyists and politicians who made it required.

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Insurance companies paid the lobbyists to lobby the politicians to make it a requirement.

So thumbs down to insurance companies.

TommyBrady said:

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Celina/Prosper North of Dallas

USAA insurance

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What is beyond maddening about this:

You aren't required to have Wind and Storm coverage. I am, because I live in a coastal county. I have to have 3 separate policies on my house - homeowners (just about useless), flood (because FEMA sucks I'm classified as Zone AE instead of X even though all data shows I am not in a flood zone) and wind and storm, because homeowners does not cover damages resulting from wind or storm events.

Apparently the ONLY place in the state of Texas that gets wind and storm events are the 13 or whatever coastal counties that are required to have it, and that the state only has allowed 1 underwriter to write policies for.

I have to fork out about $8k a year over the 3 policies, and my house is probably close to the same value as yours.

Dang I'm in Prosper and had to settle at $4100 which was a 40% increase. That's amazing.

Im guessing it just means I don't have the best coverage. I'll have to compare what my coverage is compared to average.

El Gallo Blanco said:

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TommyBrady said:

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My premium is $2,378 is that good on a $600,000 home?

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Geez, that is incredible. Ours is $2,300 on a $440k home. Zero flood risk, unless an old testament level flooding event ever occurs again. Where are you?

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Ouch. Mine is about to be $2600 on a $325k home. Unless I can find a better rate elsewhere

HillCountry15 said:

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El Gallo Blanco said:

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TommyBrady said:

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My premium is $2,378 is that good on a $600,000 home?

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Geez, that is incredible. Ours is $2,300 on a $440k home. Zero flood risk, unless an old testament level flooding event ever occurs again. Where are you?

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Ouch. Mine is about to be $2600 on a $325k home. Unless I can find a better rate elsewhere

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Yeah, that is the current rate, from my renewal last Feb. I am prepared to pucker up and start looking elsewhere in a few months. Went up 18.5% from 2023 to 2024. I am not looking fwd to seeing what they do to me this yr. Trying not to think about it, as we are currently car shopping at the moment.

TommyBrady said:

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Im guessing it just means I don't have the best coverage. I'll have to compare what my coverage is compared to average.

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No idea, but for comparison, my house is around $400k and insurance is $2700.

Home insurers can only raise rates general to all policyholders after getting permission from the state legislature. The rates can then be negotiated (e.g. higher deductible =lower premium}. Auto rates (points) can be increased due to the filing of first party collision claims because it is based on the behavior/experience of insured drivers. Even an uninsured\underinsured claim will result in a rate increase because some actuaries determined that if you are unlucky enough to get hit by an uninsured driver, you have a higher risk of it happening again than the lucky drivers.

10andBOUNCE said:

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Initial increase I just got was 70%. Liere shopped our policy and got us somewhere else at about 24% up over prior year.

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Liere hasn't been able to improve anything I've asked them
In last few years of shopping. Not sure if it's lack of effort or market, but checking hasn't produced anything fruitful.

Likely going to go elsewhere come March. Got a 83% increase last year.

Rising inflation raises all ships.

Like many have said, go out and check with various insurers.
I live in Sarasota. Citizens, the state insurance provider, was going to increase my premium from $2200/year to $4400/year. Then I got something in the mail from Progressive, they do not have much exposure in Florida apparently. Premium is $2400/year for 1.5 times the value I just paid for my house.
Long story short, check around.

TrumpsBarber said:

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Home insurers can only raise rates general to all policyholders after getting permission from the state legislature. The rates can then be negotiated (e.g. higher deductible =lower premium}. Auto rates (points) can be increased due to the filing of first party collision claims because it is based on the behavior/experience of insured drivers. Even an uninsured\underinsured claim will result in a rate increase because some actuaries determined that if you are unlucky enough to get hit by an uninsured driver, you have a higher risk of it happening again than the lucky drivers.

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Makes no sense. Years ago a guy I worked with had his fence hit by an f1 tornado. The only damage to his property was that his 8 foot cedar fence was blown away. They jacked up his insurance rate the next year. His agent told him it was because since he was unlucky enough to have tornado damage, the underwriters think it's likely to happen again. He argued (unsuccessfully although correctly) that his rates should drop because statistically getting hit twice is much smaller than getting hit once.

K Bo said:

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I guess I'm getting a really "good deal" on homeowner's insurance. Just ran a quote with Kin and it was 86% higher than my current policy premium. My current policy expires in March, so we'll see what happens then.

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Grab some KY at the Rexall!

the most cool guy said:

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I am seriously considering getting rid of my homeowners insurance and saving $4,500 next year. The only real threat to my house is hail, and I guess possible fire hazard. I'm not sure that's worth the yearly cost.

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I have rental homes that are paid off. I thought about not insuring the rentals or homestead but doesn't that leave me open to personal liability?

I have an Umbrella that covers over the liability limits so feel somewhat safe. If I dropped my homeowners, I was told that Umbrella would not cover.

Is this true and has anyone no keep homeowners insurance on a paid off rental home?

TitanAGGIE09 said:

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10andBOUNCE said:

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Initial increase I just got was 70%. Liere shopped our policy and got us somewhere else at about 24% up over prior year.

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Liere hasn't been able to improve anything I've asked them
In last few years of shopping. Not sure if it's lack of effort or market, but checking hasn't produced anything fruitful.

Likely going to go elsewhere come March. Got a 83% increase last year.

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I had Liere check all of my coverage and they said they could not do any better. Sucks b/c My homeowners and Auto has gone up 2-3x over the past 5 years.

No Spin Ag said:

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NoahAg said:

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Insurance companies.

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No, put the blame where it truly belongs: the lobbyists and politicians who made it required.

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Mortgage companies require it since they want their collateral taken care of. It's not required if you own your home outright.

Just renewed mine. $4900 with USAA. Seems high, but I have been with them forever.

TommyBrady said:

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Celina/Prosper North of Dallas

USAA insurance

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Ive got USAA, I live 20 minutes from you, my home is valued similarly, and my rate is almost double yours. What gives!?!

schmellba99 said:

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titan said:

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What is the alleged "basis" for double size increases? Some nutty thing like there are "more storms" based on bad science? Or is the number of claims being turned in? But still -- for the home, where its not the value as some of you pointed out ---how are they justifying doublings?

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Insurance is a scam.

If you file a claim, your rates increase because of your individual claim history.

If you don't file a claim, your rates increase because of "general or state rate increase" due to other people filing claims.

It is pure garbage.

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Apparently you and a **** ton of other people don't understand how risk works...

Jeeper79 said:

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TommyBrady said:

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Celina/Prosper North of Dallas

USAA insurance

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Ive got USAA, I live 20 minutes from you, my home is valued similarly, and my rate is almost double yours. What gives!?!

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Homeowners insurance is determined by the building, but the value of the home is determined by the building and the land. You can't compare instance based on home value, even within 20 minutes, because the value of the land can vary wildly. You have to compare size, whether one or two stories, envelope type, roof type and age, and other things.

You also have to compare coverages. Just because you have the same insurer doesn't mean you have the same policy. He might be covered for fewer possessions or valuables, less in personal liability, or have a lower cost to rebuild. He might not even be fully covered or he might have a much higher deductible. You just can't know until you compare a lot of details between the actual houses and what's in each policy.

Medaggie said:

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TitanAGGIE09 said:

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10andBOUNCE said:

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Initial increase I just got was 70%. Liere shopped our policy and got us somewhere else at about 24% up over prior year.

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Liere hasn't been able to improve anything I've asked them
In last few years of shopping. Not sure if it's lack of effort or market, but checking hasn't produced anything fruitful.

Likely going to go elsewhere come March. Got a 83% increase last year.

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I had Liere check all of my coverage and they said they could not do any better. Sucks b/c My homeowners and Auto has gone up 2-3x over the past 5 years.

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I was with Liere for 4-5 years. Learned my lesson. Ditch them ASAP.

I have to replace my roof in the next 5 years. I'm sure I'm about to get hosed. But we've also now cut down the 4 trees that have done the damage. No idea what we're going to get hosed with, but may suck it up for a year before we replace then shop with a new roof.

10yrs, no claims.

falconace said:

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TrumpsBarber said:

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Home insurers can only raise rates general to all policyholders after getting permission from the state legislature. The rates can then be negotiated (e.g. higher deductible =lower premium}. Auto rates (points) can be increased due to the filing of first party collision claims because it is based on the behavior/experience of insured drivers. Even an uninsured\underinsured claim will result in a rate increase because some actuaries determined that if you are unlucky enough to get hit by an uninsured driver, you have a higher risk of it happening again than the lucky drivers.

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Makes no sense. Years ago a guy I worked with had his fence hit by an f1 tornado. The only damage to his property was that his 8 foot cedar fence was blown away. They jacked up his insurance rate the next year. His agent told him it was because since he was unlucky enough to have tornado damage, the underwriters think it's likely to happen again. He argued (unsuccessfully although correctly) that his rates should drop because statistically getting hit twice is much smaller than getting hit once.

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Not you, just "a guy I worked with" years ago. I do not doubt your veracity, but some facts were lost in the telling of the story. You can make a phone call to the Texas Department of Insurance and they will confirm or refute what I wrote about the premium increases. 800-252-3439

Have to shop home every year and auto every six months

No choice anymore.