Since homeowners insurance premiums consistently rise about 20-30% every friggin year, where in the world can I invest in this asinine hockey-stick growth and begin riding the other side of the reach-around???

I (unfortunately) own quite a few homes/buildings and I kid you not, it's every single year that there is some lame excuse (inflation, shortages of building supplies, weather, odd year of many claims, etc.) where they raise the premiums like baziollions of times over any other non-regulated industry.

I cannot recall one year where the premium increase was even close to inflation.

Seriously, insurance companies need a smackdown by the gov't. That is one place where the gov't needs to step in.

/rant

Wait till they gove the illegals the boot. You'll have hourly labor increases, nothing to mention all the shoddy work requiring rework

ALL - All State PE 12 Yield 1.97%
PGR - Progressive PE 17 Yield 0.16%
TRV- Travelers PE 13 yield 1.7%
HIG - The Hartford PE 11 yield 1.88%
CB- Chubb PE 12 yield 1.29%

Not saying they couldn't and shouldn't run their business much more efficiently, but it costs money to process $48B in claims. There will always be overhead that your premium has to cover.

Ferris Wheel Allstar said:

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The Silverback said:

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This is an uninformed post.....research combined loss ratios for the last couple years on home owners policies in Texas for the major companies. Losses are in the billions. I think just State Farm alone lost something like $4B

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well, maybe they shouldnt pay every effing fraudulent claim instead of fighting it.

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Bingo.

htxag09 said:

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FWIW State Farm's Income from premiums in 2023 was $57B. They paid out $48B in claims. They "lost" money because they have over $6B in "expenses for paying claims" and over $12B in "service and admin fees".

But going back to the OP, you think it's a scam and there is money to be made just self insure. Especially if you "own quite a few homes/buildings." Maybe get cheap policies to help in the event of a total loss or fire.

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Brother if you only knew. Don't even go there with State Farm. I lost almost $1M in "earth movement" damage a few years ago when they didn't stand up to the test (we even had a rider for this). It was a newsworthy lawsuit that we ultimately gave up on and still today are paying out of pocket. But since you will likely chime in with a "well since you lost you obviously were in the wrong", I won't debate further. I had yet another battle that was more important to us (loss of my son) that we didn't have the bandwidth to deal any further with goliath.

The bottom line is that they hedge their risks with massive premium hikes of the stable, low risk consumers which I propose because it is easier than fighting fraud.

lol if you knew me at all you'd know I'd never say that. But solid assumption.

My point still stands, though. If you think it's a scam, why not self insure? Or partially self insure (protect from catastrophic loss only)?

You have multiple properties to spread the risk.

Obviously unless you're borrowing for the properties. And in that case, seems right the company who's money it is would have a say.

Ferris Wheel Allstar said:

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well, maybe they shouldnt pay every effing fraudulent claim instead of fighting it.

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If it were that easy for billion dollar companies to turn 9 and 10 figures losses into profits I am pretty sure they would adjust, as their goal is to make money. When this much money is on the line I am certain they have way smarter people than us making decisions. The home insurance crisis in Texas has effected every insurance company, it has a ton of layers to it but when the dust settles home owners are going to start sharing the risk on their roofs. 80% of all home claims in Texas were derived from wind/hail claims and when factoring in inflation and the cost to repair, its not sustainable.

htxag09 said:

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lol if you knew me at all you'd know I'd never say that. But solid assumption.

My point still stands, though. If you think it's a scam, why not self insure? Or partially self insure (protect from catastrophic loss only)?

You have multiple properties to spread the risk.

Obviously unless you're borrowing for the properties. And in that case, seems right the company who's money it is would have a say.

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Never say what? That insurance companies need more accountability.

So many responsible, low-risk, homeowners (especially the lower/middle income) shouldn't have to suck it up and self-insure just because the insurance companies roll the dice on beach properties. I know that is hardly a drop in the bucket so don't go running with that statement that is intended to drive a point.

We hold a broad range from zero to near insane policies here and there and I completely understand the concept of what you are getting at with self-insuring, but in your bold defense of the modern-day-tax-collectors, you are missing the point that we have to reel in these oligopolies.

And don't even get me started on health insurance companies...

I'd never say what you quoted me as going to chime in with: "well since you lost you obviously were in the wrong"

Would be nice if an insurer had a 20% deductible option... which would be in the case of a total loss.

Semi-self insure.

I'd be in.

Not sure why they don't handle it on the front side with code upgrades requiring more hail-resistant roofing.

The issues with the hurricane prone areas are another situation entirely. People didn't use to build multi million dollar properties on the beach because you would be an idiot to do so. Now we just insure it for when it gets knocked down.

If you can't show proof of insurance for your motor vehicle upon a traffic stop, the vehicle should be immediately impounded until proof of liability insurance is presented.

That will help a lot too!

Let me just close with this - we need insurance reform.

mhnatt said:

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Let me just close with this - we need insurance reform.

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If it's government intrusion you are asking for, prepare for it to get worse, with less competition, less providers, and more expensive. History shows no other reality.

The industry will eventually correct itself, its just going to be a shift from what we are used to. Basically we (Homeowners) are going to share a much bigger portion of the risk on roofs. 2% or higher deductibles, Actual Cash Value, etc.

I think eventually we will also then see a change in construction, pretty asinine its common practice to put on a roof that cant withstand storms which are now common place.

This is easy to solve but not popular so it will never happen.

HIGHER DEDUCTIBLES.

Home, Auto, flood, medical (eliminate networks while we are at it). EVERYTHING.

This would increase competition in the market place for everything.

Take roofs... 20% deductible and uninsurable over 10 years old.

Personal responsibility goes a long way to controlling the market. Insurance money is one step up from government money in causing inflation.

I'm almost always for less gov. Obamacare was an example of overreach (though a few things did work out). But I'm also not for letting them off the hook either. I'm sure it's more complex than my intelligence level but I'm wise enough to know that there are miles of corrections that are overdue.

No one can nor should sustain a 20-30% increase in premiums year after year.

The one thing not being factored in that could easily bring insurance costs down is a fall in replacement cost, AKA a fall in home prices. Nobody thinks its possible, but it is. Maybe not soon. But all of this is linked. If insurance premiums have to rise to such an extreme level that people cant afford it and you hear calls for government regulation of an indstry that is struggling to maintain profitability, a natural economic answer is a fall in demand for housing and property in general.

I don't see how a drop in sales price of the housing market would necessarily drop replacement costs.

You could argue that builders pad their margins a bit in hot markets, but the replacement costs are based more on commodity and labor prices than anything else.

Ag92NGranbury said:

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BRK.A

or

BRK.B

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Uncle Warren is undefeated. Lots of people listen to his advice and try to mimic his approach. Or you can just buy his shares. I hoard them. Every 2 weeks on payday buy another share or two.