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 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.

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There is only Homeowner liability coverage, but that is what we need. In the 19th Century there were only fire policies which covered the loss of your home in a fire. You could probably buy a Fire and Extended Coverage policy that is much cheaper and covers fewer perils, but it will not have liability coverage. Anyway, I like the way you and your wife view risk and insurance.

TommyBrady said:

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

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Got you beat. Our insurance is only $2,160 on a $1.5M home!!



Wait...our flood insurance is $8k and our wind and hail is $6,800.

So, $17k total. Never mind.


I think this industry is about to vomit on everything. Multiple things are going to happen here:

• Insurance reform. No idea what this looks like.
• Private insurance goes away and the government becomes the provider. Already happening in some areas.
• People start building smaller houses.
• People stop moving to higher cost insurance areas (like mine).

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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That's not how it works.

The risk the insurer is calculating is two sided: frequency and magnitude. How often do storms of any given magnitude occur in an area? The way they calculate that is by looking at the distribution and frequency of storms of different magnitudes to determine the distribution of storms by magnitude, which also helps them estimate the maximum expected strength of a storm to hit a particular area. A tornado probably upsets the assumptions around that distribution and increases the likelihood estimate of not just future tornadoes, but the storms that spawn them. Even if he isn't hit by a second tornado, it likely leads to a substantial increase in the risk assumptions for wind and hail damage because the insurer's models say they can expect more severe storms with a higher frequency in his area than previously estimated.

On top of that, events like tornadoes follow a power law distribution. The more they happen in an area, the more you can expect them to continue to happen. As an example, consider cities A, B, and C. City A has not seen a hurricane in 30 years, city B has seen 1, and city C has seen 5. If I asked you to rank them in order based on which is most likely to see a hurricane in 5 years, you're probably going C, B, A, which really runs counter to your buddy's argument.

YouBet 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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Got you beat. Our insurance is only $2,160 on a $1.5M home!!



Wait...our flood insurance is $8k and our wind and hail is $6,800.

So, $17k total. Never mind.


I think this industry is about to vomit on everything. Multiple things are going to happen here:

• Insurance reform. No idea what this looks like.
• Private insurance goes away and the government becomes the provider. Already happening in some areas.
• People start building smaller houses.
• People stop moving to higher cost insurance areas (like mine).

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you forgot to include nutjobs assasinating insurance executives...

Why is insurance going up faster than anything else? We're required to have it if we own a home and they can just raise it arbitrarily to anything they want. This has gotten completely out of hand.

ts5641 said:

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Why is insurance going up faster than anything else? We're required to have it if we own a home and they can just raise it arbitrarily to anything they want. This has gotten completely out of hand.

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It's going up because it can, a la, "Let the market decide" and all that.

Why do you think not one politician is out there railing against this?
Answer: They're bought and paid for by the insurance companies and their lobbies.

No Spin Ag said:

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ts5641 said:

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Why is insurance going up faster than anything else? We're required to have it if we own a home and they can just raise it arbitrarily to anything they want. This has gotten completely out of hand.

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It's going up because it can, a la, "Let the market decide" and all that.

Why do you think not one politician is out there railing against this?
Answer: They're bought and paid for by the insurance companies and their lobbies.

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If the government is completely out and the market will tolerate the increases, so be it.

If they tried to tell me what I could charge my clients, I would be pissed. And I provide a constitutionally mandated service where the government skews pricing. If they were out, my revenue would skyrocket.

ts5641 said:

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Why is insurance going up faster than anything else? We're required to have it if we own a home and they can just raise it arbitrarily to anything they want. This has gotten completely out of hand.

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Insurance rates are not going up faster than the cost of houses and homeowners insurance is often not profitable. The major insurance companies depend on written premiums on auto policies to make a profit and that is why you see those commercials trying to encourage consumers to "bundle" the two coverages. This is also the reason homeowners in Florida are depending more on state coverage because insurance carriers have lost so much money that they left the state.

The poster with the bullet points gets it. When a house sells for $230,000 four years ago and goes on the market for $415,000 today, then there is going to a higher cost of insurance.

Logos Stick said:

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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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Put the blame on inflation.

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Put the blame on Cali and other similar states. Insurers can't raise rates there so they have to raise them somewhere else.

I support almost complete deregulation of insurance with laws strengthening fair claims payments.

Generally, an insurer uses it's loss data for state X only in their rate filings for state X. The only way they'd use another state's loss data is if their data wasn't full credible (i.e not enough policies or claims), so they'd take a weighted average of their state X data with a state or group of states whose claims data they'd expect to behave similarly to state X.

• Any insurer that did use state Y's loss data in their rate setting process for state X would experience adverse selection and they would only get the poor risks on their books and the better risks would leave.
• DOIs wouldn't approve the rate increase that uses that data unless they have a good reason to include it like not being full credible.

As for deregulation, McCarran-Ferguson requires the states to actively regulate the insurance industry unless Congress wants to speak on an insurance issue, so under deregulation we'd trade state regulation for federal regulation. Despite having 50 sets of regulation, I'd prefer that to federal regulation. States have a better understanding of their varies needs compared to federal regulators. The duplication process would allow for better fraud control compare Martin Frankel getting caught versus Madoff. I love this gem from Buffet about federal regulators - "So indecipherable were Freddie and Fannie that their federal regulator, OFHEO, whose more than 100 employees had no job except the oversight of these two institutions, totally missed their cooking of the books."

If you're in Fayette County or the surrounding counties, Engle Insurance only insures homes in those counties. My buddy on their board claims they are a great company……small town. They send their balance sheet every year and you can actually understand it.

Got caught in "a problem" revolving door!

Allstate & Progressive are like jackals these days, stealing clients from their SOP raise rates insurers from whom clients never question nor quit ... until now.
That said, I alone could not cut any ice switching over but my long time agent DID.

All I had to do was to explain the problem that annual increases in premiums - staying put - were about to outweigh my SS ability to pay them that was NOT increasing at such a race pace.

I'm sure others can cut a fatter hog, I just don't have time to play cards with the national jerks trying to retire to buy an island on our quarters.

I heard somewhere all state & progressive are like jackals these days

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 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.

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The lawyer of a trick-or-treater that hurt themselves on your front steps on Halloween probably won't pursue it if you don't have a carrier, unless you're among the 1%. That's why injury lawyers ask if you have been hit by a "company vehicle". Same reason Dillinger robbed banks, "because that's where the money is".

Checking out this kin outfit, unfortunately doesn't look like they're in CO yet. I'm still with USAA and have been meaning to shop around for a while. Moved away from them ~10 years ago cause they were significantly higher than some of the competition. Came back when I shopped around again like 5 years ago and USAA was actually cheaper at that point. I'm assuming they all play the same games the tv and phone companies do offering good deals to switch and then consistently raise the rates while you're with them.

Hit that 5% deductible.

just for reference... started a policy last March for about $480k coverage.

Our HO insurance is at $1667 with Geico (also have Geico auto). Curious to see what happens at renewal in about 3 months, and we are in Montgomery County.