Any suggestions on the best way to go for coverage in this situation? Buying lake property and finding companies just saying no, or severely limiting coverage amount.
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Home Insurance - no fire hydrants in the area - second home
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Last: 7 mo ago by Rexter
I would try a different insurance company. USAA had a problem with how close the nearest fire hydrant was, Germania and Farm Bureau didn't even ask.
Ill be more than happy to see what I can do, I own an Independent Agency in Austin but write all over Texas.
Matt@Dimitexas.com
Matt@Dimitexas.com
More and more issues every step of the way... As said already no fire hydrants anywhere close (or fire station within 3 minutes response time). New issues identified is it is an 11 year old roof and will be used as a second home. Apparently, insurance companies aren't interested in paying for roofs going forward, so being told some companies won't write anything with as low as a 1 year old roof....but over 10 years old is pretty much no one.
At this point, looking like I or seller will have to put on a new roof (even though it's not needed) for buyer to get insurance. After that, pick from those that will write on Fire Protection class 10, then find one that will write a second home. I've spoken to Amica, Progressive, and 4 Independent agents (3 of which are in the area of the property). Best I can tell, the 11 year roof is a showstopper right now. Beyond that, should be able to get coverage from someone on those other issues, but no certainty.
This is a new business issue, not a renewal issue. Makes for definite headwinds in the rural real estate market...hopefully it makes the prices come down more! Also makes me think twice before I would change insurance companies on my primary stuff!
At this point, looking like I or seller will have to put on a new roof (even though it's not needed) for buyer to get insurance. After that, pick from those that will write on Fire Protection class 10, then find one that will write a second home. I've spoken to Amica, Progressive, and 4 Independent agents (3 of which are in the area of the property). Best I can tell, the 11 year roof is a showstopper right now. Beyond that, should be able to get coverage from someone on those other issues, but no certainty.
This is a new business issue, not a renewal issue. Makes for definite headwinds in the rural real estate market...hopefully it makes the prices come down more! Also makes me think twice before I would change insurance companies on my primary stuff!
Not just rural on the roof thing. Had a client last week that was being told the only way they would write on the 10 year old roof was if it had a 2% deductible and would not cover the depreciation on the roof when it was replaced. Oh and the rate was double what it should be. Several companies would not even consider it.
Roof had some hail damage and wind damage. Hoping he could get it replaced by the sellers.
Figure the insurance companies are angling to get roofs excluded from home insurance and make it its own policy like flood insurance or something.
Roof had some hail damage and wind damage. Hoping he could get it replaced by the sellers.
Figure the insurance companies are angling to get roofs excluded from home insurance and make it its own policy like flood insurance or something.
Absolutely agree this isn't just a rural issue on the roof, but the no hydrant and second home exclusions, in addition to the roof requirements, is just compounding the issue.
I'm seeing this more and more. I encourage everyone to check their policies right now. Many customers are finding they renewed with ACV clauses once a roof hits a certain age. I've had several $40,000 roofs that re 10-16 years old and the customer has a total loss but, whoops, the policy flipped to ACV AT 10 years or 15 years and now they have to come up with 20-30k on their own or finance at 8%. Impact resistant shingles are not being covered with total losses, either. It's getting bad.
It's nuts.
It's nuts.
And from what I'm gathering, nothing you can do about it even if you do check your policy. Emergency fund formulas just went up.
Insurance companies are getting out of the roof/fence replacement business, which I understand. Frustration on the new policy front is they won't even quote it and give an ACV notation. I'm guessing part of the issue there is verifying the actual age of the roof?
Insurance companies are getting out of the roof/fence replacement business, which I understand. Frustration on the new policy front is they won't even quote it and give an ACV notation. I'm guessing part of the issue there is verifying the actual age of the roof?
While I understand them wanting out of that. It would seem like there should be some transparency and notifications that go along with the idea, even before the process begins. We have paid higher premiums for decades in our area with the knowledge we are paying a portion toward having the roofs replaced more often. For them to just change that on a dime and say they are not covering them any more seems to be pretty sketchy ethically at best.
But then, why would we expect any kind of ethical behavior from companies like that. My non homeowners policies have doubled in the last 3 years with no claims and nothing new other than the vehicles getting older and less valuable. Wish I could double my fees.
But then, why would we expect any kind of ethical behavior from companies like that. My non homeowners policies have doubled in the last 3 years with no claims and nothing new other than the vehicles getting older and less valuable. Wish I could double my fees.
cjsag94 said:
And from what I'm gathering, nothing you can do about it even if you do check your policy. Emergency fund formulas just went up.
Insurance companies are getting out of the roof/fence replacement business, which I understand. Frustration on the new policy front is they won't even quote it and give an ACV notation. I'm guessing part of the issue there is verifying the actual age of the roof?
Correct. Nothin we can do about it. As for roof age, there is no way to tell how old the roof is u less it's documented by the carrier. Over the past twenty years, that's tough because while I can install your roof and collect the insurance funds for it, it's registered with that carrier. So if the owner sells the house, or moves, or changes policies, sometimes that info is not transferred. I get asked all the time how old a roof is by the adjusters. My answer is always "I don't know". Even if I do know I'm not saying anything because it can hurt the homeowner.
The roof situation gets tough for me because by the time I get involved, we're already inspecting and getting it approved and so I may have a lot of work invested only to find out they have an ACV policy and they can't afford the roof. I can only help so much at that point.
Heck, I had an ACV policy on my own roof and didn't know it for a month until I checked.
Absolute said:
While I understand them wanting out of that. It would seem like there should be some transparency and notifications that go along with the idea, even before the process begins. We have paid higher premiums for decades in our area with the knowledge we are paying a portion toward having the roofs replaced more often. For them to just change that on a dime and say they are not covering them any more seems to be pretty sketchy ethically at best.
But then, why would we expect any kind of ethical behavior from companies like that. My non homeowners policies have doubled in the last 3 years with no claims and nothing new other than the vehicles getting older and less valuable. Wish I could double my fees.
I remember years ago when mold damage was the claim -du-jour and the insurance companies amended policies at renewal to make that an add on declaration if you wanted to cover that. It's not unethical.. it's all spelled out in the renewal notices. Problem is no one reads that stuff carefully, don't likely understand if they do, and lastly not much recourse if you do understand.
I'd like to hear some realtors and insurance agents chime in here with insight on this issue. From what is sounds like to me, most listings need to state new roof at closing. Is it really that bad? I'm getting the sense my realtor's office is not even aware of this issue yet, and they have the majority of the area listings.
I see that as very different. Mold was a "new" claim in the sense that people were suddenly told they needed to worry about it and lawyers were lining up to make money off of it and fanning the fire.
Hail is not new as a claim item and has been worked into our rates for a long time. For them to change the rules while increasing the rates and lowering coverage seems improper to me. Maybe unethical is the wrong word.
I am a Professional Inspector and a Realtor. I would agree that not everyone knows this is happening. The 10 year old flag has been a thing for years with some/a few companies. But it did not seem as wide spread. More like the way some companies would stop writing policies for a particular area for a while then slowly decide to come back. I didn't see it being like you described or like my client last week where they just could not find ANY company to write a reasonable policy or any policy at all. I see roofs all the time that are around 10 years old and are fine. But the I understand that the actuary numbers will tell the insurance companies (correctly) that the odds of them having to replace those roofs in the next 5 years are probably almost 100%. Between the fact that the shingles get more brittle every year and the chances of a hail event are always there.
Going to be a wild change to the real estate market and home ownership in general if suddenly you have to replace your roof every 10 years at your own expense or have to replace your roof to sell your house just because it is more than 5 years old.
Hail is not new as a claim item and has been worked into our rates for a long time. For them to change the rules while increasing the rates and lowering coverage seems improper to me. Maybe unethical is the wrong word.
I am a Professional Inspector and a Realtor. I would agree that not everyone knows this is happening. The 10 year old flag has been a thing for years with some/a few companies. But it did not seem as wide spread. More like the way some companies would stop writing policies for a particular area for a while then slowly decide to come back. I didn't see it being like you described or like my client last week where they just could not find ANY company to write a reasonable policy or any policy at all. I see roofs all the time that are around 10 years old and are fine. But the I understand that the actuary numbers will tell the insurance companies (correctly) that the odds of them having to replace those roofs in the next 5 years are probably almost 100%. Between the fact that the shingles get more brittle every year and the chances of a hail event are always there.
Going to be a wild change to the real estate market and home ownership in general if suddenly you have to replace your roof every 10 years at your own expense or have to replace your roof to sell your house just because it is more than 5 years old.
Every insurance company is handling things differently. So really depends on the company as to what they will write and what their procedures are on quoting new business. But in general, most companies are doing one or multiple of the following:
Wont write new business if the roof is over a certain age
Require 2% min hail deductible
Excluding certain zip codes
Requiring inspection reports prior to approving quote
Requiring proof from certified roofer condition of roof
Requiring proof of age of the roof if different from the year built
-Landlord polices are MUCH tighter now than homeowners.
-DFW is damn near uninsurable if the home is older than 5 years. Very few options there and even less with old roofs and/or old original year built
-Houston is tough as well, not quite as bad as DFW
-There are all sorts of other variables that can cause problems depending on the carrier: Pier/Beam foundation, coverage amount exceeding $1M, acreage more than 10 acres, farm animals, trampolines, unfenced pools, existing damage, flat roofs, etc etc.
Normally those hurdles are easy to overcome but with such limited options now on who will quote what these are becoming problems.
Also, something most people don't think about but if you have had your roof replaced, your policy wont update to new year for the roof unless instructed. So make sure you tell your agent because it will save you a good amount of money on your premium and potentially open up new carriers if they requote you.
And for people buying new homes, insurance used to be an afterthought you handle closer towards closing date. I've been telling my lender and realtor friends, particularly on older properties, get that sorted out ASAP so if there are major hurdles it can be negotiated in the deal.
Wont write new business if the roof is over a certain age
Require 2% min hail deductible
Excluding certain zip codes
Requiring inspection reports prior to approving quote
Requiring proof from certified roofer condition of roof
Requiring proof of age of the roof if different from the year built
-Landlord polices are MUCH tighter now than homeowners.
-DFW is damn near uninsurable if the home is older than 5 years. Very few options there and even less with old roofs and/or old original year built
-Houston is tough as well, not quite as bad as DFW
-There are all sorts of other variables that can cause problems depending on the carrier: Pier/Beam foundation, coverage amount exceeding $1M, acreage more than 10 acres, farm animals, trampolines, unfenced pools, existing damage, flat roofs, etc etc.
Normally those hurdles are easy to overcome but with such limited options now on who will quote what these are becoming problems.
Also, something most people don't think about but if you have had your roof replaced, your policy wont update to new year for the roof unless instructed. So make sure you tell your agent because it will save you a good amount of money on your premium and potentially open up new carriers if they requote you.
And for people buying new homes, insurance used to be an afterthought you handle closer towards closing date. I've been telling my lender and realtor friends, particularly on older properties, get that sorted out ASAP so if there are major hurdles it can be negotiated in the deal.
I had this happen to me after buying a rural property a couple years ago. I closed and had everything set, then I get a call from insurance that they were going to drop me due to no close hydrants. I ended up sending insurance a letter from the fire chief stating that the fire department responds to calls by automatically sending 10,000 gallons on a tanker truck as their standard practice. This worked for my insurance.cjsag94 said:
Any suggestions on the best way to go for coverage in this situation? Buying lake property and finding companies just saying no, or severely limiting coverage amount.
Thanks for the detailed response. Everyone talks about mortgage rates and inflation wreaking havoc on the housing market, i never saw this coming and I'm glad I am doing my due diligence ahead of offers.
I supposedly have a quote headed my way from State Farm. Even then.. anything could change between now and closing it seems.
I supposedly have a quote headed my way from State Farm. Even then.. anything could change between now and closing it seems.
I'm really nervous about this aspect.. what would've happened had they not accepted that explanation? Or what happens when next year's renewal they decide not to?
There's was a thread here I found from a while back where the lender was threatening foreclosure when even their forced coverage wouldn't write it. They found some department of insurance process to get it covered and saved their home.
There's was a thread here I found from a while back where the lender was threatening foreclosure when even their forced coverage wouldn't write it. They found some department of insurance process to get it covered and saved their home.
You are on a lake? Not sure if this is a thing, but would the fire department in the area have a truck that can pump from there?
We all ask that! They do all have tanker trucks full of water.
I think it's all kind of silly... If the house goes up in flames, it is either burning being repair or destroyed by the thousands of gallons of water they pour on it.
I think it's all kind of silly... If the house goes up in flames, it is either burning being repair or destroyed by the thousands of gallons of water they pour on it.
Excellent point.Quote:
If the house goes up in flames, it is either burning being repair or destroyed by the thousands of gallons of water they pour on it.
What % are people using to estimate insurance cost these days? I think I remember it being .8%/yr years ago when I bought last. Is that way too low now (w Houston area)? Just trying to ballpark so I can estimate monthly payment on a new house
In years past I would run across maybe 1 out of 40 quotes where I didn't have any options or my only option was astronomical. Right now I am running into that issue about 1 out of 20. If I primarily wrote in DFW or Houston would be much worse, thankfully a majority of my business is in Central Texas.cjsag94 said:
I'm really nervous about this aspect.. what would've happened had they not accepted that explanation? Or what happens when next year's renewal they decide not to?
There's was a thread here I found from a while back where the lender was threatening foreclosure when even their forced coverage wouldn't write it. They found some department of insurance process to get it covered and saved their home.
And I am Independent Agent with multiple carriers I can quote with, don't know how the captive agents are doing.
Our little rural lake community has a dry hydrant.
https://dixonvalve.com/en/news-and-events/news/dry-hydrants-overview
https://dixonvalve.com/en/news-and-events/news/dry-hydrants-overview
Some inscos want to know about alternate water sources, such as lake, pond, tank, pool, etc.
if something is available, they then want to know surface coverage and depth of body of water, or pool capacity.
Very few have tree canopy stipulations, but there better not be so much as a leaf in contact with the roof.
No beer fridges outside or in a carport. Gotta be in a closed garage.
I could go on and on…
if something is available, they then want to know surface coverage and depth of body of water, or pool capacity.
Very few have tree canopy stipulations, but there better not be so much as a leaf in contact with the roof.
No beer fridges outside or in a carport. Gotta be in a closed garage.
I could go on and on…
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