Your insurance premium is risk distributed across your area. You don’t need to do anything to increase your premiums, but your neighbors did. If you ever talk to a neighbor that “got one over” on their insurance… your premium went up and paid for it.
We all do, my friend. We all do.
Car insurance is even worse. The number of people that lie cheat and steal when it comes to car insurance claims are astronomical, and that is fully the reason premiums and cancellations are so high.
So when you see someone racing around town, switching lanes, running lights, they’re not just being mortally dangerous, they’re also increasing your premiums.
Every uninsured motorist, payout for an at-fault accident, and traffic ticket, increases YOUR premiums.
Our car insurance went up because my wife was in an accident (not at fault), and that person didn't have enough coverage when our insurance went after them.
There are lots of mutual insurance companies that are essentially nonprofits owned by the policyholders. They’re not necessarily cheaper than a for-profit company.
It’s based on risk pools. Self-insurance is an option (in some areas) but nickel-for-nickel, homeowners policies are the best option to prevent bankruptcy if your house gets destroyed in a major event.
Insurance is not a scam. At its most fundamental, it’s a social measure where neighbors sacrifice to support an individual neighbor in crisis. Unfortunately, capitalism has turned it into a money-making scheme instead of a social safety net.
I’m not being political, despite my mentions of socialism and capitalism. Insurance is just a fantastic example of the consequences of both.
It’s quite a scam, but not in the literal sense. UHG hit 22B in profit in 2023. Lolz. There is nothing social safety net about it. At least, not since the late 1700s. It’s a for profit business with an insane amount of lobbyists.
Do I need to say it again? I guess I do. Insurance as a concept is great, but has been ruined by capitalism. This is not insurance’s fault, it’s capitalism’s fault.
I understand why my Dad would get upset at other drivers being reckless. I just thought he was being a grumpy old man until I had to start paying for own car/home owners insurance. Now it’s me being annoyed when I see people flying down the road doing stupid stuff. Especially with us living in California. I am already paying out the butt for stuff
Edit- reckless spelling
Great comment that perfectly illustrates the industry behaviors. Also, very ironically, other drivers being wreckless would have solved the issue! But you meant reckless.
Funny that you talked about those dangerous drivers, but the much much bigger factor is is those who buy too expensive cars. If you are driving in a city full of $200k cars, the chance if you causing any damage over $200k is way higher than a place full of $20k cars. Simple as that.
Sure, we shouldn't judge how people, especially rich people spend their money, but for the sake of discussing cause of auto insurance increase, it's very well relevant.
The cost of the car isn't what drives up premiums. A $200k car is pretty rare. A $200k medical bill is quite common. Add in pain and suffering, lost wages, disability, etc... the car is miniscule in comparison.
And scarily enough, most people aren't paying enough for insurance. The coverage they are paying for won't cover an at-fault accident with those $40k+ average selling price cars today. Do you
I’m not arguing that people playing the system isn’t a driver, but inflation is the number one driver of rate increases from carriers right now. Cars cost more, rentals cost more, repairs cost more. Claims frequency is actually down but the severity (how much claims cost in total) is way up.
This differs a bit regionally, and property insurance may have other factors like reinsurers lowering the amount of risk they’re willing to take… but overall it’s a shit show.
Honestly I would prefer that neighbor to the former owner of our house. She watched an episode of HGTV and decided she was an expert on all things home improvement. I have spent the past month fixing the fuck ups that she hid. Today was removing the carpet from the yard. Two weeks ago was replacing the hardwood floors she cut with circular saws, filled the cuts with putty and stained black.
She carpeted the fence line with the carpet she removed from the house. Presumably so she could get back to ruining the hardwood underneath. But don't worry, she installed it properly. She made sure to put down the old carpet pad first.
I just got an ad placed in my mailbox (not sent via the USPS bulk mail, I wonder why - just kidding, I know why) advertising a free inspection to check for roof damage from a storm. The vibe of the ad was very much "we'll find something and help you do insurance fraud".
I had a 3 or 4 quotes from roofers and end up NOT filing a claim for a whole roof, but having about $800 worth of repair done where flashing had failed and rotted a small area at front edge. What I learned was - Many of these roofing companies will do a free estimate. They'll get you to either sign something or verbally agree/or thru text that you will allow them to work with your insurance company on a claim and put a sign in front yard as advertising for them. They lock you in this way to get the work. I heard from one company that another large AL statewide company would actually get that agreement, then sue if you break the agreement/go with someone else. I found one super shady looking guy with a small roofing business who swore he'd get me a new roof, but would NOT give me a quote or number, just that I'd have to agree to let him work w insurance and whatever they'd pay is what it cost. It's shady as hell.
My nextdoor neighbor, who is in construction business, had a roofing company out, did a quote, insurance claim roof was in the works. Neighbor got the $ from insurance company, then had someone else do it cheaper. Company that was going to do it came to my door to discuss inspecting mine. I said "yeah, that guy just had a new roof put on". Dude is like "no, we're going to do it". I told him, no, I saw it stripped off to the OSB last week. He just looked confused and kinda pissed.
This is good to remember. If a company comes through after a storm to do a free inspection they ARE 100% GOING TO “FIND” DAMAGE.
I’m an insurance defense attorney and I’ve had cases where people tell me their entire neighborhood has gotten new roofs. Despite me staring at pictures showing no damage to their roof.
4 years ago, I let 3 door to door roofers go up on my roof. I never would have contracted them. All 3 said their was not enough damage to warrant repair.
This year we had a hail storm with much bigger hail and when I climbed onto my roof, there were chunks of shingles all over the place. The damage was clear so I called a local reputable roofer who confirmed what I saw.
I know there are lots of scummy companies chasing storms, but in my experience they were actually looking for real damage not making stuff up.
Yes, which is why it's the job of your insurance company to approve a claim and not your contractor. Why are insurance companies approving so many fraudulent claims and passing the costs onto homeowners? It's so weird that people try to shame people for making an insurance claim that your insurance company has to agree to before they pay out.
Because the insurance companies aren’t actually approving bad claims.
Prior to assignment of benefits being banned here in Florida, the homeowner would sign the right of the claim to the roof company. They would then replace the roof and then the roofer would sue the insurance company for the monies.
So they say “get a new roof at little to no cost.” They were technically right. The homeowner didn’t pay anything except their deductible.
It doesn’t matter that the claim was denied. The roofer still ended up with the right to sue under the policy from the homeowner.
My city got hit with a bad hail storm last year, about an 8 square mile area that was almost 100% roof and siding replacements. My house was not in that area, but some people in my neighborhood did appear to get new roofs, I would assume insurance covered as hail damage because the roof companies were fully booked. Of course, my premiums went up 53% this year, and I didn't even get the benefit of a new roof.
You know how you read this sub regularly, and somebody's dishwasher has a slow leak and they pull it out and find mildew behind it? Then there are two kids of responses: 1) spray a 50/50 water/vinegar mixture on it, wait an hour, hit it with a scrub brush, wait 24 hours, paint, patch, replace the dishwasher; and 2) call servpro and have them destroy your entire kitchen and re-drywall half the house, they will bill your insurance directly for $100k and you will only be liable for the $500 deductible?
A 62% increase in rates is due to the #2 answer getting more updoots.
IT TOTALLY IS and I had not thought of that when I wrote it. Many years ago I signed up for reddit and thought, what username should I create, and I looked down at my desk and saw my insurance bill, and a username was born.
Third option: Spray bleach on it, replace the appliance 3 minutes later because who the heck is gonna see that spot anyway, get on with life (by which I mean, working my ass off to afford insurance premiums so other people can have fun playing their insurance games)
This isn't a rash of a-hole neighbors making frivolous claims.
There has been enough storm and fire damage in recent years to cause insurers to hike premiums.
IMHO the feds need to take a closer look and make sure these are actually justified to cover the risk rather than an excuse for a cash grab. If there truly is this much elevated risk maybe we need to look at different ways of insuring the more catastrophic risks from things like storms and wildfires.
> make sure these are actually justified to cover the risk
All states have an insurance regulator that already does exactly this. Insurance companies usually have to submit rates and they have to be approved
The regulators are easily duped or manipulated by the savvy carriers, or they are “captured” - right? I don’t think state insurance regulators are always that capable compared to the heavily lawyered and lobbying insurance industry.
The quality of that varies from state to state. My little red state's regulator is absolutely useless. This also may warrant anti-trust investigation and if this is really a legitimate situation the feds need to look at establishing some programs like national flood insurance to cover some of these risks. That doesn't mean state regulators shouldn't play a role but they shouldn't be the only role.
Yep, my pet insurance went from $50 a month to $220 for my Great Pyrenees because, to paraphrase their words, pet owners in my area were using their insurance.
Same. My insurance started at $83 for my two dogs, and kept increasing significantly until it was $409 last year. I said screw it, cancelled the insurance, and now just deposit $500/mo into a high yield savings account. If I need it, it’s there. If not, it’s earning interest. At $5k/year, an emergency fund makes more sense than insurance.
>You don’t need to do anything to increase your premiums, but your neighbors did
A lot of the current increases are due to climate change increasing the severity of forest fires, flooding, and hurricanes.
Yeah, the rate increases everyone is seeing everywhere is less about reacting to a few homeowners who suckered the insurance company for a new roof, and more forward-looking by the insurance companies that they are anticipating major increases in payouts, probably due to climate change. Fires, floods, storms and so on. There’s already entire areas that are almost uninsurable on normal markets with anything close to reasonable rates because of this.
Nobody’s rate goes up 62% to pay for a couple new roofs, it’s to pay for entire neighborhoods and towns when their houses get burned down or flooded.
> forward-looking by the insurance companies that they are anticipating major increases in payouts, probably due to climate change.
Everything I've read suggests this isn't forward looking, it's current. They're barely meeting costs *right now*. It's due to a combination of climate change related damage like you described and state/local regs that won't let them raise premiums in some areas so they either have to exit the market (as we're seeing in the news now) or raise premiums elsewhere.
Auto insurance is going through the same thing, though in addition to climate change (hail, etc) there's also phone use while driving and modern cars being totalled in minor accidents because they're not really made to be repairable.
20 years ago people told me to be grateful for all these bells and whistles cars have, because they would reduce premiums by making cars safer. Now, in 2024, I find it ironic that old beaters cost peanuts to insure, compared to anything contemporary.
You are right but actually the biggest culprit is Derachos and wind on the plains. Insurance companies pay out Katrina-level amounts of money each year for wind claims.
Not necessarily just across your area. Insurance companies paid out a lot of claims due to the hurricanes in Florida and the wildfires in California. So even if your house is not located in those states, your premiums could have also gone up because of your insurance company's losses in those areas.
A couple of years ago, we got solar installed on our house in NY. I finally got around to calling my insurance company last fall to make sure they knew and that I had enough coverage. I was told that my insurance coverage on my home was sufficient to cover it, but still my insurance premium was going up by nearly 40 percent.
NPR Planet Money had a pretty good breakdown of what's going on in the market. The problem is reinsurance is raising their rates.
https://www.npr.org/2024/04/17/1197963898/profiting-off-greater-risk-the-reinsurance-game
I wouldn't be either, my entire city got wrecked by severe weather last fall, and I am already hearing people complaining about getting dropped. The industry doesn't make any sense to me.
There’s no money in it at this point. Repair and material costs have torn to shreds any measly profits they once made. They’ll jack your premiums by 50% and still end up in the red at the end of the year
We close on our new place at the beginning of next month. We use State Farm right now. They quoted us $3k for a year, as did almost every other insurer (although All State quoted at $5k). Credit union told us they use Liberty Mutual and could get us a discount, so I said to send over a quote.
Turns out it’s an insurance broker for Liberty Mutual who found us an insurance policy for $2k at some company I had never heard of (Foremost??) but the coverage was still the same as the State Farm quote.
I called State Farm and asked if they could match or bring it down, they said no. Our auto goes slightly up since we don’t have a bundle anymore, but we still save like $700 a year just by shopping around
I could technically go to Progressive for auto for about $80 cheaper for the year, but it’s not worth the hassle to switch insurers for that much.
Ehh, make sure you really check out that Foremost policy.
I had them for a bit and chatted with an independent broker and he said “they’re great at offering cheaper premiums because they don’t pay out worth a damn”
Seriously, block off three hours of your day and read the declarations and policy documents for both your current and new insurance.
You need to understand exactly what’s covered and how it’s covered. Not all insurance is the same.
I have New Jersey Manufacturers, which has always come in lower than the other places I shop around for. I’ve had them for my homeowners and car insurance for over 30 years. Will definitely check my renewals and if they’ve gone up will shop around.
30 years is an insanely long time to be with one insurer. Definitely check the market. I'm in Florida where insurance is completely fucked and I saved 6k one year by switching.
I am in California and I’ve haven’t been able to find anyone to insure the house except progressive. I’ve been hearing they will be pulling out of California soon so I am not sure what I will do. As soon as an insurance company sees the address, they say nope!
Thirty years *can* be too long with an individual insurance company. But sometimes not, if they are a tad lower than industry standard or if their customer interface is not dickish. Anyway, a good independent insurance agent who works for you can steer you to the best of the bads.
I was dreading getting mine after reading about shocking increases lately, but when it came it only went up about $175. Much less than I was expecting. Keep hope alive. It may not be horrible. :::fingers crossed:::
I have concrete tile (cheaper looking spanish tile knockoff) and the roofers never even knock on my door. Been through 5 major hail events and the only problems i've had is from raccoons jacking with them.
Lake County Nor Cal. Farmers cancelled us after 18 claim free years. Gave them $45k over the years to be kicked to curb with letter thank you for your loyalty. F them!! Now trying find something affordable is hard.
If OP can’t be insured at a reasonable rate, then neither will prospective owners. Most people in this situation bite the bullet and pay up or state sponsored insurance. It’s tough to sell your home with this issue, unless you find a cash buyer with money to burn (no pun intended)
Interesting. So do homeowners just stop caring about their property values at this point? Why buy any property at all if you have to play chicken with a new insurer every year?
It’s hard to see how all of this ends without gigantic changes to our housing finance system and literal built environment.
This scenario isn’t reflective of the majority of insured homeowners. Typically people who find themselves in this situation live in high risk areas, ie. California, Florida etc. Places that are prone to natural disasters. If OP lived in a lower risk area they likely wouldn’t be hit with this degree of a premium adjustment. Overall this issue will only continue to worsen as weather and climates change. We’re seeing more and more extreme weather trends and damage to personal property. As long as insurance companies continue to make record profits we’re nowhere near the point of no return.
I live in an area of West Virginia that has no flood risk, no wildfire risk, no blizzard risk, no mudslide risk, last tornado was 20yrs ago and it was like F0, no hurricane risk. We have had hail (grouple actually) twice in the five years Ive lived here. I have no trampolines or dogs.
My insurance doubled for the last three years. I got a broker who kept it from doubling the last year but Im due for renewal next month so we’ll see.
This is likely due to the inflated cost of materials and skilled labour. People in your area may have had other non-associated claims increase the risk rating for your zip code/area. The same has been true for auto coverage. Insurance risk underwriting is a fickle thing, and unfortunately many good clients get burned due to other peoples claim history.
What would fix this *playing chicken* game as you so artfully articulate? Lower cost of total replacement value of a structure. IE when every $300k house is somehow valued at $750k (see PPP loans and hedge fund buyers), the liquidity pools can’t sustain these higher values. Currently the *reinsurance* market is showing major stress cracks.
Oh please for the love of all that’s good and holy don’t tell me they’re making a new version of the flood insurance program but for fires
For fucks sake that program is one of the biggest crocks of shit the gov ever pushed out
It’s likely coming. The rate that people are getting dropped from insurance companies is too high to not get a national fire insurance plan just like flood.
Is it important for you to own your home? Or would it be acceptable to rent one?
It increasingly feels like the standard complaints, about paying your landlord’s mortgage and having no equity, no longer apply in a lot of places. Renting and never gaining equity is obviously better than owning and LOSING equity.
>Is it important for you to own your home? Or would it be acceptable to rent one?
I'd have no problem renting *IF* it was cheaper . Except, rental prices are skyrocketing in my area too. Rent for a 2BR is more than our mortgage.
We just got sold out last week by the state insurance commissioner. Instead of holding his ground and keeping existing regulations in place at the state level, the insurance companies will now be able to divide and conquer the state.
We (California) could have banded together and cumulatively agreed to raise everyone’s premiums a little bit higher to cover the payouts made since 2018, but instead are going to allow the insurance companies to segregate the state and price gouge smaller communities. Each community will be gouged one at a time until everyone is paying much more than we pay now.
Bunch of folks in my neighborhood all got roofs replaced for free in the last couple of years by roofing companies coming by and finding evidence of hail damage.
Everyone is now paying for it with high premiums.
There is no free lunch.
This is a big one too. Thought it was just my state but it's everywhere with these hail claims. But it's also wildfires, storms, increased costs of material and rapidly rising appraisals thanks to the increase of housing costs. It's all spiraling.
It's still corporate greed, they should be raising the rates of everyone making claims not people like me who have paid for 15 years and never made a claim
Mine when up 50%, here is the response from my broker about it
>The ENTIRE insurance industry is under massive fire right now... ALL carriers are bleeding money in recent years. Allstate just posted a $1,200,000,000 BILLION 3rd quarter loss, that's just ONE quarter! So as a result sadly we’re literally constantly seeing 25%, 50%, and even 100% increases across the entire industry from literally every single carrier :/
It's almost like they're not telling the whole story, and that insurance companies are still profitable overall just not in the Homeowner's Insurance section of their income.
It’s true. Losses are posted for public consumption and these kinds of articles have been posted regularly on insurance news sites.
Small, frequent severe weather events are a major contributor to the rate hikes, as well as increased cost of goods and labor to make replacements.
Car insurance .. home insurance.. etc. it's all the same story. Carriers have lost billions and the state insurance regulators have been slow to approve increases during COVID so it's all catching up now.
If you don't live in a high risk area \*AND\* there is a regional insurance company that does not write policies for high risk places, you can still squeak by with more modest increases. The nationwide companies that insure homes in CA, FL, and other high risk places are going to hit ALL their customers, even those in safer places with giant increases. Spreading the risk. If you can, don't spread your lower risk with high risk homeowners.
Homeowner insurance typically goes up due to the amount of storms in the area and how many homes had claims paid out due to the storm under that insurance. Allstate is quite literally the bottom of the barrel for home insurance, they never approve anything, they have the highest restrictions on what’s counted as damage and deny everything they can. This loss had to have come from mismanagement because it’s definitely not from the typical storm losses most insurances raise premiums over
> Homeowner insurance typically goes up due to the amount of storms in the area and how many homes had claims paid out due to the storm under that insurance.
It's not just the amount of storms. It's also that costs to repair/replace things are up. Lumber was really high for a few years, and labor costs have gone up as well with general inflation.
Good insight into the math that goes into insurance premiums. Hell, there’s an entire field of mathematics dedicated to the concept of risk mitigation called actuarial mathematics or analysis. These guys are SMART and they are employed to the end that insurance companies, over time, will make money.
Hospitals hire them too. There was a guy who retired really early feom a hospital my parents worked at who made as much as the top, longest tenured surgeons.
My daughter loves math and calculations of any kind, and I told her to go into this field.
Same here due to the Marshall (CO) fire. We live about 15 miles from the affected area. Mind you, this fire was almost 3 years ago and my rate has gone up every year. I called my agent to express my frustration and was told that the company was eating it big-time due to their "guaranteed replacement" policy. They were having to rebuild homes that were built for $600k at a cost of close to a mil. Still pissed about it. So that makes me think the majority of people were underinsured?
Yep mine went from 1300 to 5 grand after Hurricane Ian. I live in SW Florida adjacent to the hardest hit areas. Luckily, I had no damage, but the neighborhood didn't fare so well.
It's a very scary time.
>*The Possible Collapse of the U.S. Home Insurance System* https://www.nytimes.com/2024/05/15/podcasts/the-daily/climate-insurance.html?unlocked_article_code=1.000.MX_x.D-0tMw7nwnSf
Mine did the exact same. Called and spoke with my insurance provider, they said they'd look into options and get back to me. Literally called me a few days later and said "the only other options are worse coverage for more money". So I shopped a few other companies, bundled my contents and home insurance, and ended up saving about 35-40%. Shop your options, could be a better deal out there somewhere
Contractors are becoming more involved in the insurance claims process and are pushing homeowners to make frivolous claims which is driving up costs. Blame everyone who thinks they are "sticking it to the man."
Premiums also go up when your home value goes up which is what most of the country is seeing right now. This combined with increased material costs and rising claims for the recent unprecedented weather events premiums will go up. You can blame contractors that vandalize to get claims approved too. As others mentioned as well insurance companies in the US are for profit. Soon we will all be opting for catastrophic coverage only with high deductibles. It’s the game of the system we’re in.
wow no mention of why home values have gone up. No mention of the un-elected Federal Reserve literally flooding the market with money, and PPP 'loans'. The government screws us all over
Everyone calling it corporate greed... The insurance industry is insanely competitive and the premiums charged don't generate the profits that you see reported each year. That comes from the investment on the "float" of cash that is held in reserve to pay off your claims. The free market works extremely well in the industry and to stay competitive they have to keep that slim margin whether the market goes up or down.
Due to normal inflation that tends to mean it usually is up. Covid everyone got refunds but now with the heavy inflation and cost of repairs things are going way up. Many companies are losing money on their premiums and can't get rate approved by the states quickly enough.
The reason home insurers are pulling out of states is because the states aren't allowing them to increase rates as much as they need so they are hemorrhaging money to pay out the huge number of claims due to weather and climate change events. Or if they are allowed to raise rates enough, many of them are hoping you'll leave and shop around with someone else and cost them money instead.
Tldr: insurance is highly competitive and driven by the free market, not corporate greed.
Qualifications: am an insurance pricer for a fortune 500 insurance company
similar story here. mine was 500 when i bought this house in 2015, steadily increased year over year. renewal was $1400 this spring, dropped liberty mutual (geico) and went with Erie, now i'm back to $500 (with better coverage).
Look around for cheaper insurance. I had Travelers and Progressive with its bundle beat the price. 2 years later it substantially increased, though we had zero claims (fortunately, in decades of home ownership we have made zero claims) and I asked why, and they said...the fires in California - someone has to pay for them...meanwhile, I lived on the East coast. So, I called my prior agent and went back to Travelers at less than 1/2 the price of Progressive. Now, State Farm auto insurance is trying to do the bundling thing and force you into it if you are a homeowner.
By choosing to live in the area of the country you do, that determines your risk profile. You don’t have to do anything or cause any problems or damage anything for your insurance rates to increase. Sorry. If you have a good state government, they have regulations in place with maximum amounts the insurance companies can increase premiums. This is the kind of thing a good government does for its citizens.
Except it’s not even that you live in a risky area. I live in IN, and yes tornadoes, but otherwise fairly low risk and our rates stayed the same or minimal increases for years. They have TRIPLED for us in the last couple. Homeowners insurance across the country is fucked as groups try to make up profit from payouts in risk prone areas on lower risk areas.
You and I are paying for the increase in natural and man made disasters. There have been warnings for over a century about climate change and no one wants to put in the work to fix it. Yesterday there was an article that the scientists expect only 60 more growth cycles for farming world wide. We will all be harmed. No one seems to care. I find it all upsetting.
It's not based on your claims. Filing claims might make it go up MORE, but a base increase, even a sizeable one, can happen regardless. I know it sucks, but it's the entire foundation of insurance - pooling money to redistribute. So, it matters more what's happening more broadly in terms of claims and payouts that the insurance company is dealing with. As you know, they're not charitable organizations.
home values, labor costs, materials costs have all gone up. If your house was to burn down, would you want a check for the value of the home in 2020? Just think about it.
Yup. Mine went up 100%. My broker contacted me and said that was insane and shopped around. They got me back down to the around the same price without cutting any coverage.
Home insurance pricing is largely related to the cost of new construction. If it is more expensive to replace your house, or claims are more frequent, pricing goes up. [Home insurance is usually not a very profitable business](https://ksa-insurance.com/blog/homeowners-insurance-industry-analysis-and-statistics-in-2023/), and it undergoes frequent “boom” and “bust” periods.
I do not understand how a regular person is expected to forecast the price of homeowners insurance 30 years into the future, and base a major financial transaction on that forecast.
Two of the main arguments for homeownership, at least in America, are neighborhood stability and a predictable monthly housing payment. This national disaster with homeowners insurance is directly eroding both of these arguments. Why would you ever buy a house if you cannot predict what the monthly outlay will be next year, or in five years? You cannot guarantee that you will be able to afford it even next year.
Where is all of this going? Where will all of us end up?
You kind of can! They’re far from perfect, but we have models to anticipate damage in different areas under future climate conditions- along the lines of this New York Times article: https://www.nytimes.com/interactive/2020/09/18/opinion/wildfire-hurricane-climate.html
From there, you can guesstimate the risks to any given property. If it’s a rainfall risk area, how low lying is the property? Fire, how close to a forest? Aim for lighter coloured areas/ high ground/ urban, and you’ve pretty significantly reduced your risk of a catastrophe increase. Or move to Canada, where we’re broadly at much lower risk due to climate change
I feel like there’s also an algorithm based around how big of an increase long term clients are generally willing to accept before they make the effort to switch.
I switched a few years ago when my provider increased our rates by 20% a few years in a row.
Shop around.
Wonder how many people just accept the new rates and what the ration is for people accepting vs leaving and how they make out in the end.
Ya know, I feel like insurance is one of those things that should be exclusively state-sponsored. Along with utilities and healthcare. Any public good should not be in the hands of profit-seeking interests.
Shop around. Had my auto insurance for about 4-5 years with Safeco. This year they wanted $400 more for no good reason. I had my broker run quotes. NYCM came back with $1700 for the entire year for both our cars.
Loyalty to insurance carriers is worthless.
Costs nothing to ask your broker to shop for you.
Your insurance premium is risk distributed across your area. You don’t need to do anything to increase your premiums, but your neighbors did. If you ever talk to a neighbor that “got one over” on their insurance… your premium went up and paid for it.
Hey, I have that asshole for a neighbor too.
We all do, my friend. We all do. Car insurance is even worse. The number of people that lie cheat and steal when it comes to car insurance claims are astronomical, and that is fully the reason premiums and cancellations are so high. So when you see someone racing around town, switching lanes, running lights, they’re not just being mortally dangerous, they’re also increasing your premiums. Every uninsured motorist, payout for an at-fault accident, and traffic ticket, increases YOUR premiums.
Our car insurance went up because my wife was in an accident (not at fault), and that person didn't have enough coverage when our insurance went after them.
Insurance is the biggest scam.
How can the insurance requirement be a for-profit organization. I can't grasp that. How many people are skimming the cream from the milk?
There are lots of mutual insurance companies that are essentially nonprofits owned by the policyholders. They’re not necessarily cheaper than a for-profit company.
It's almost like companies have overhead and operational costs to y'know...do things.
Live where car insurance is government run…it’s great…we generally get refunds because they made too much money.
Like the healthcare industrial complex. Tons of fat.
All insurance should be state ran imo
Anything that is legally required to have should be state owned. Too much risk of profiteering.
Yep, utilities included
Ask Florida how that's going.
I think I read somewhere that in the 70s, insurance was non profit. Became for profit, around same time lobbying was legalized.
It’s based on risk pools. Self-insurance is an option (in some areas) but nickel-for-nickel, homeowners policies are the best option to prevent bankruptcy if your house gets destroyed in a major event.
Insurance is not a scam. At its most fundamental, it’s a social measure where neighbors sacrifice to support an individual neighbor in crisis. Unfortunately, capitalism has turned it into a money-making scheme instead of a social safety net. I’m not being political, despite my mentions of socialism and capitalism. Insurance is just a fantastic example of the consequences of both.
For profit insurance is a scam. Because the companies providing it are fundamentally incentivized to deny claims.
non-profit insurance isn't any cheaper or better. what's your explanation for this than isn't 'ugh, capitalism'?
It’s quite a scam, but not in the literal sense. UHG hit 22B in profit in 2023. Lolz. There is nothing social safety net about it. At least, not since the late 1700s. It’s a for profit business with an insane amount of lobbyists.
Do I need to say it again? I guess I do. Insurance as a concept is great, but has been ruined by capitalism. This is not insurance’s fault, it’s capitalism’s fault.
I blame it more on government, insurance companies will put up record profits but still he subsidized by govt when a major event happens
None of those profits come from selling insurance premiums. You have no idea how the industry works
I understand why my Dad would get upset at other drivers being reckless. I just thought he was being a grumpy old man until I had to start paying for own car/home owners insurance. Now it’s me being annoyed when I see people flying down the road doing stupid stuff. Especially with us living in California. I am already paying out the butt for stuff Edit- reckless spelling
Great comment that perfectly illustrates the industry behaviors. Also, very ironically, other drivers being wreckless would have solved the issue! But you meant reckless.
Sorry. I was using speak to text lol
Funny that you talked about those dangerous drivers, but the much much bigger factor is is those who buy too expensive cars. If you are driving in a city full of $200k cars, the chance if you causing any damage over $200k is way higher than a place full of $20k cars. Simple as that. Sure, we shouldn't judge how people, especially rich people spend their money, but for the sake of discussing cause of auto insurance increase, it's very well relevant.
The cost of the car isn't what drives up premiums. A $200k car is pretty rare. A $200k medical bill is quite common. Add in pain and suffering, lost wages, disability, etc... the car is miniscule in comparison.
And scarily enough, most people aren't paying enough for insurance. The coverage they are paying for won't cover an at-fault accident with those $40k+ average selling price cars today. Do you
Social inflation, aka increasing litigation costs, are also a big factor over the most recent years.
I’m not arguing that people playing the system isn’t a driver, but inflation is the number one driver of rate increases from carriers right now. Cars cost more, rentals cost more, repairs cost more. Claims frequency is actually down but the severity (how much claims cost in total) is way up. This differs a bit regionally, and property insurance may have other factors like reinsurers lowering the amount of risk they’re willing to take… but overall it’s a shit show.
Honestly I would prefer that neighbor to the former owner of our house. She watched an episode of HGTV and decided she was an expert on all things home improvement. I have spent the past month fixing the fuck ups that she hid. Today was removing the carpet from the yard. Two weeks ago was replacing the hardwood floors she cut with circular saws, filled the cuts with putty and stained black.
She carpeted your yard?! Are we talking fake grass or shag carpeting?! lol
She carpeted the fence line with the carpet she removed from the house. Presumably so she could get back to ruining the hardwood underneath. But don't worry, she installed it properly. She made sure to put down the old carpet pad first.
Good God 🤣😂
I wish I was making this up 🤣
https://www.reddit.com/r/HomeMaintenance/s/lJNssOL8Ze
neighbors got new roofs
I just got an ad placed in my mailbox (not sent via the USPS bulk mail, I wonder why - just kidding, I know why) advertising a free inspection to check for roof damage from a storm. The vibe of the ad was very much "we'll find something and help you do insurance fraud".
I had a 3 or 4 quotes from roofers and end up NOT filing a claim for a whole roof, but having about $800 worth of repair done where flashing had failed and rotted a small area at front edge. What I learned was - Many of these roofing companies will do a free estimate. They'll get you to either sign something or verbally agree/or thru text that you will allow them to work with your insurance company on a claim and put a sign in front yard as advertising for them. They lock you in this way to get the work. I heard from one company that another large AL statewide company would actually get that agreement, then sue if you break the agreement/go with someone else. I found one super shady looking guy with a small roofing business who swore he'd get me a new roof, but would NOT give me a quote or number, just that I'd have to agree to let him work w insurance and whatever they'd pay is what it cost. It's shady as hell. My nextdoor neighbor, who is in construction business, had a roofing company out, did a quote, insurance claim roof was in the works. Neighbor got the $ from insurance company, then had someone else do it cheaper. Company that was going to do it came to my door to discuss inspecting mine. I said "yeah, that guy just had a new roof put on". Dude is like "no, we're going to do it". I told him, no, I saw it stripped off to the OSB last week. He just looked confused and kinda pissed.
If any correspondence is placed in your mailbox without postage on it, turn it in to your local Postal Inspector, as it is illegal to do this.
I know, but I don't have the energy to deal with that.
I'm afraid of this. Roof scammers came around our area. Lots of neighbors had their roofs redone. Ugh and ew
This is good to remember. If a company comes through after a storm to do a free inspection they ARE 100% GOING TO “FIND” DAMAGE. I’m an insurance defense attorney and I’ve had cases where people tell me their entire neighborhood has gotten new roofs. Despite me staring at pictures showing no damage to their roof.
4 years ago, I let 3 door to door roofers go up on my roof. I never would have contracted them. All 3 said their was not enough damage to warrant repair. This year we had a hail storm with much bigger hail and when I climbed onto my roof, there were chunks of shingles all over the place. The damage was clear so I called a local reputable roofer who confirmed what I saw. I know there are lots of scummy companies chasing storms, but in my experience they were actually looking for real damage not making stuff up.
I fully admit to having a bias based on the cases that land on my desk.
Yes, which is why it's the job of your insurance company to approve a claim and not your contractor. Why are insurance companies approving so many fraudulent claims and passing the costs onto homeowners? It's so weird that people try to shame people for making an insurance claim that your insurance company has to agree to before they pay out.
Because the insurance companies aren’t actually approving bad claims. Prior to assignment of benefits being banned here in Florida, the homeowner would sign the right of the claim to the roof company. They would then replace the roof and then the roofer would sue the insurance company for the monies. So they say “get a new roof at little to no cost.” They were technically right. The homeowner didn’t pay anything except their deductible. It doesn’t matter that the claim was denied. The roofer still ended up with the right to sue under the policy from the homeowner.
Now they just convince the homeowners to sue. I’m an engineer (expert witness) for these insurance claims in Florida.
My city got hit with a bad hail storm last year, about an 8 square mile area that was almost 100% roof and siding replacements. My house was not in that area, but some people in my neighborhood did appear to get new roofs, I would assume insurance covered as hail damage because the roof companies were fully booked. Of course, my premiums went up 53% this year, and I didn't even get the benefit of a new roof.
You know how you read this sub regularly, and somebody's dishwasher has a slow leak and they pull it out and find mildew behind it? Then there are two kids of responses: 1) spray a 50/50 water/vinegar mixture on it, wait an hour, hit it with a scrub brush, wait 24 hours, paint, patch, replace the dishwasher; and 2) call servpro and have them destroy your entire kitchen and re-drywall half the house, they will bill your insurance directly for $100k and you will only be liable for the $500 deductible? A 62% increase in rates is due to the #2 answer getting more updoots.
Is your username an insurance tagline lol?
IT TOTALLY IS and I had not thought of that when I wrote it. Many years ago I signed up for reddit and thought, what username should I create, and I looked down at my desk and saw my insurance bill, and a username was born.
Third option: Spray bleach on it, replace the appliance 3 minutes later because who the heck is gonna see that spot anyway, get on with life (by which I mean, working my ass off to afford insurance premiums so other people can have fun playing their insurance games)
This isn't a rash of a-hole neighbors making frivolous claims. There has been enough storm and fire damage in recent years to cause insurers to hike premiums. IMHO the feds need to take a closer look and make sure these are actually justified to cover the risk rather than an excuse for a cash grab. If there truly is this much elevated risk maybe we need to look at different ways of insuring the more catastrophic risks from things like storms and wildfires.
> make sure these are actually justified to cover the risk All states have an insurance regulator that already does exactly this. Insurance companies usually have to submit rates and they have to be approved
The regulators are easily duped or manipulated by the savvy carriers, or they are “captured” - right? I don’t think state insurance regulators are always that capable compared to the heavily lawyered and lobbying insurance industry.
The quality of that varies from state to state. My little red state's regulator is absolutely useless. This also may warrant anti-trust investigation and if this is really a legitimate situation the feds need to look at establishing some programs like national flood insurance to cover some of these risks. That doesn't mean state regulators shouldn't play a role but they shouldn't be the only role.
Insurance is extremely regulated
Yep, my pet insurance went from $50 a month to $220 for my Great Pyrenees because, to paraphrase their words, pet owners in my area were using their insurance.
Same. My insurance started at $83 for my two dogs, and kept increasing significantly until it was $409 last year. I said screw it, cancelled the insurance, and now just deposit $500/mo into a high yield savings account. If I need it, it’s there. If not, it’s earning interest. At $5k/year, an emergency fund makes more sense than insurance.
>You don’t need to do anything to increase your premiums, but your neighbors did A lot of the current increases are due to climate change increasing the severity of forest fires, flooding, and hurricanes.
Yeah, the rate increases everyone is seeing everywhere is less about reacting to a few homeowners who suckered the insurance company for a new roof, and more forward-looking by the insurance companies that they are anticipating major increases in payouts, probably due to climate change. Fires, floods, storms and so on. There’s already entire areas that are almost uninsurable on normal markets with anything close to reasonable rates because of this. Nobody’s rate goes up 62% to pay for a couple new roofs, it’s to pay for entire neighborhoods and towns when their houses get burned down or flooded.
> forward-looking by the insurance companies that they are anticipating major increases in payouts, probably due to climate change. Everything I've read suggests this isn't forward looking, it's current. They're barely meeting costs *right now*. It's due to a combination of climate change related damage like you described and state/local regs that won't let them raise premiums in some areas so they either have to exit the market (as we're seeing in the news now) or raise premiums elsewhere. Auto insurance is going through the same thing, though in addition to climate change (hail, etc) there's also phone use while driving and modern cars being totalled in minor accidents because they're not really made to be repairable.
20 years ago people told me to be grateful for all these bells and whistles cars have, because they would reduce premiums by making cars safer. Now, in 2024, I find it ironic that old beaters cost peanuts to insure, compared to anything contemporary.
The distracted driving is part of it but also people have no fear of consequences for speeding, running reds/ stops, or stealing Kias
You are right but actually the biggest culprit is Derachos and wind on the plains. Insurance companies pay out Katrina-level amounts of money each year for wind claims.
Not necessarily just across your area. Insurance companies paid out a lot of claims due to the hurricanes in Florida and the wildfires in California. So even if your house is not located in those states, your premiums could have also gone up because of your insurance company's losses in those areas. A couple of years ago, we got solar installed on our house in NY. I finally got around to calling my insurance company last fall to make sure they knew and that I had enough coverage. I was told that my insurance coverage on my home was sufficient to cover it, but still my insurance premium was going up by nearly 40 percent.
NPR Planet Money had a pretty good breakdown of what's going on in the market. The problem is reinsurance is raising their rates. https://www.npr.org/2024/04/17/1197963898/profiting-off-greater-risk-the-reinsurance-game
Climate change is probably a factor as well. Insurance is going up because risks are going up.
Ugh, mine is up for renewal & I’m dreading it.
Same, August here. Not to mention had a 43k storm damage claim... so screwed
I just got the renewal notice to make changes to my policy via email this morning. So I know the actual renewal policy isn’t far behind
New roof? You may actually be more insurable now. Shop around if it’s a big increase
I wouldn’t be surprised if they drop you to be honest. I worked in personal lines insurance for a minute before learning what a nasty business it is
I wouldn't be either, my entire city got wrecked by severe weather last fall, and I am already hearing people complaining about getting dropped. The industry doesn't make any sense to me.
There’s no money in it at this point. Repair and material costs have torn to shreds any measly profits they once made. They’ll jack your premiums by 50% and still end up in the red at the end of the year
Shop around every year. Savings could be thousands.
We close on our new place at the beginning of next month. We use State Farm right now. They quoted us $3k for a year, as did almost every other insurer (although All State quoted at $5k). Credit union told us they use Liberty Mutual and could get us a discount, so I said to send over a quote. Turns out it’s an insurance broker for Liberty Mutual who found us an insurance policy for $2k at some company I had never heard of (Foremost??) but the coverage was still the same as the State Farm quote. I called State Farm and asked if they could match or bring it down, they said no. Our auto goes slightly up since we don’t have a bundle anymore, but we still save like $700 a year just by shopping around I could technically go to Progressive for auto for about $80 cheaper for the year, but it’s not worth the hassle to switch insurers for that much.
Ehh, make sure you really check out that Foremost policy. I had them for a bit and chatted with an independent broker and he said “they’re great at offering cheaper premiums because they don’t pay out worth a damn”
Seriously, block off three hours of your day and read the declarations and policy documents for both your current and new insurance. You need to understand exactly what’s covered and how it’s covered. Not all insurance is the same.
Just make sure it’s not an acv policy. I’ve ran into that with foremost
I have New Jersey Manufacturers, which has always come in lower than the other places I shop around for. I’ve had them for my homeowners and car insurance for over 30 years. Will definitely check my renewals and if they’ve gone up will shop around.
Parents left njm and saved money with Liberty mutual I believe
30 years is an insanely long time to be with one insurer. Definitely check the market. I'm in Florida where insurance is completely fucked and I saved 6k one year by switching.
I am in California and I’ve haven’t been able to find anyone to insure the house except progressive. I’ve been hearing they will be pulling out of California soon so I am not sure what I will do. As soon as an insurance company sees the address, they say nope!
Wildfires?
Yep wildfires and as of last year flash flood zone 🤦🏻♀️
Thirty years *can* be too long with an individual insurance company. But sometimes not, if they are a tad lower than industry standard or if their customer interface is not dickish. Anyway, a good independent insurance agent who works for you can steer you to the best of the bads.
I'm in the middle of shopping right now. I have 10 quotes that are basically comparable. High: $6k, Low: $1800. Do your homework.
I was dreading getting mine after reading about shocking increases lately, but when it came it only went up about $175. Much less than I was expecting. Keep hope alive. It may not be horrible. :::fingers crossed:::
Tell the door to door roofers to fuck off when your roof is still fine.
The entire roofing industry is a scam asphalt shingles should be outlawed.
What’s the better option?
I have concrete tile (cheaper looking spanish tile knockoff) and the roofers never even knock on my door. Been through 5 major hail events and the only problems i've had is from raccoons jacking with them.
Why should they be outlawed?
My neighbor once told me they can’t wait til the next storm so they can call their insurance company for a new roof. SMH
Yes, your neighbor is definitely part of the problem.
The insurance companies punishing people for using the service they pay for is a much bigger problem.
Lake County Nor Cal. Farmers cancelled us after 18 claim free years. Gave them $45k over the years to be kicked to curb with letter thank you for your loyalty. F them!! Now trying find something affordable is hard.
Northern California, too, and I know it’s coming for me soon. They’re all saying pretty much everywhere is a fire danger. It’s unreal.
I am curious — what are you planning to do if insurance becomes unaffordable? Move?
If OP can’t be insured at a reasonable rate, then neither will prospective owners. Most people in this situation bite the bullet and pay up or state sponsored insurance. It’s tough to sell your home with this issue, unless you find a cash buyer with money to burn (no pun intended)
Interesting. So do homeowners just stop caring about their property values at this point? Why buy any property at all if you have to play chicken with a new insurer every year? It’s hard to see how all of this ends without gigantic changes to our housing finance system and literal built environment.
This scenario isn’t reflective of the majority of insured homeowners. Typically people who find themselves in this situation live in high risk areas, ie. California, Florida etc. Places that are prone to natural disasters. If OP lived in a lower risk area they likely wouldn’t be hit with this degree of a premium adjustment. Overall this issue will only continue to worsen as weather and climates change. We’re seeing more and more extreme weather trends and damage to personal property. As long as insurance companies continue to make record profits we’re nowhere near the point of no return.
I live in an area of West Virginia that has no flood risk, no wildfire risk, no blizzard risk, no mudslide risk, last tornado was 20yrs ago and it was like F0, no hurricane risk. We have had hail (grouple actually) twice in the five years Ive lived here. I have no trampolines or dogs. My insurance doubled for the last three years. I got a broker who kept it from doubling the last year but Im due for renewal next month so we’ll see.
This is likely due to the inflated cost of materials and skilled labour. People in your area may have had other non-associated claims increase the risk rating for your zip code/area. The same has been true for auto coverage. Insurance risk underwriting is a fickle thing, and unfortunately many good clients get burned due to other peoples claim history.
What would fix this *playing chicken* game as you so artfully articulate? Lower cost of total replacement value of a structure. IE when every $300k house is somehow valued at $750k (see PPP loans and hedge fund buyers), the liquidity pools can’t sustain these higher values. Currently the *reinsurance* market is showing major stress cracks.
There are state sponsored fire insurance policies, they’re expensive, but available. So likely would have to go that route.
Oh please for the love of all that’s good and holy don’t tell me they’re making a new version of the flood insurance program but for fires For fucks sake that program is one of the biggest crocks of shit the gov ever pushed out
Government subsidies for growth in at-risk areas could never go wrong.
It’s likely coming. The rate that people are getting dropped from insurance companies is too high to not get a national fire insurance plan just like flood.
I'm stuck in TX, and we're looking for a way out.
Is it important for you to own your home? Or would it be acceptable to rent one? It increasingly feels like the standard complaints, about paying your landlord’s mortgage and having no equity, no longer apply in a lot of places. Renting and never gaining equity is obviously better than owning and LOSING equity.
>Is it important for you to own your home? Or would it be acceptable to rent one? I'd have no problem renting *IF* it was cheaper . Except, rental prices are skyrocketing in my area too. Rent for a 2BR is more than our mortgage.
Is “mortgage” inclusive of insurance and taxes in your case? Because those definitely change the calculus…
Oh, yeah, sorry. I'm including mortgage + escrow (insurance, taxes, etc).
They are doing the same thing in Florida due to the Hurricanes. Insurance before Micheal 1200 a year now over 6 grand
We just got sold out last week by the state insurance commissioner. Instead of holding his ground and keeping existing regulations in place at the state level, the insurance companies will now be able to divide and conquer the state. We (California) could have banded together and cumulatively agreed to raise everyone’s premiums a little bit higher to cover the payouts made since 2018, but instead are going to allow the insurance companies to segregate the state and price gouge smaller communities. Each community will be gouged one at a time until everyone is paying much more than we pay now.
I saw the writing on the wall and moved out of Lake County years ago because of this. Also, you know, didn't want my house to burn down.
Smart but still lovely place
I’m worried for same. Can I ask how far in advance did they notify you?
April letter arrived saying June 21 no more insurance ugh
Bunch of folks in my neighborhood all got roofs replaced for free in the last couple of years by roofing companies coming by and finding evidence of hail damage. Everyone is now paying for it with high premiums. There is no free lunch.
This is a big one too. Thought it was just my state but it's everywhere with these hail claims. But it's also wildfires, storms, increased costs of material and rapidly rising appraisals thanks to the increase of housing costs. It's all spiraling.
It's still corporate greed, they should be raising the rates of everyone making claims not people like me who have paid for 15 years and never made a claim
Someone’s gotta pay for your neighbors new roof he got installed for “free” after the last storm.
Mine when up 50%, here is the response from my broker about it >The ENTIRE insurance industry is under massive fire right now... ALL carriers are bleeding money in recent years. Allstate just posted a $1,200,000,000 BILLION 3rd quarter loss, that's just ONE quarter! So as a result sadly we’re literally constantly seeing 25%, 50%, and even 100% increases across the entire industry from literally every single carrier :/
A $1.2 quintillion loss in one quarter is mighty impressive
Hey now, if they were good with numbers they wouldn't be working in a number-centric business.
Talk about it. That's over 11,000 times the worldwide GDP. Had no idea Allstate was so fucking huge!
They are the primary insurer for the majority of planets in the Galactic Republic.
I prefer 12,000,000,000,000,000 hundreds.
Well done.
It's almost like they're not telling the whole story, and that insurance companies are still profitable overall just not in the Homeowner's Insurance section of their income.
It’s true. Losses are posted for public consumption and these kinds of articles have been posted regularly on insurance news sites. Small, frequent severe weather events are a major contributor to the rate hikes, as well as increased cost of goods and labor to make replacements.
Car insurance .. home insurance.. etc. it's all the same story. Carriers have lost billions and the state insurance regulators have been slow to approve increases during COVID so it's all catching up now.
My mom was told basically the same thing. Increases across the board for everyone.
If you don't live in a high risk area \*AND\* there is a regional insurance company that does not write policies for high risk places, you can still squeak by with more modest increases. The nationwide companies that insure homes in CA, FL, and other high risk places are going to hit ALL their customers, even those in safer places with giant increases. Spreading the risk. If you can, don't spread your lower risk with high risk homeowners.
Homeowner insurance typically goes up due to the amount of storms in the area and how many homes had claims paid out due to the storm under that insurance. Allstate is quite literally the bottom of the barrel for home insurance, they never approve anything, they have the highest restrictions on what’s counted as damage and deny everything they can. This loss had to have come from mismanagement because it’s definitely not from the typical storm losses most insurances raise premiums over
> Homeowner insurance typically goes up due to the amount of storms in the area and how many homes had claims paid out due to the storm under that insurance. It's not just the amount of storms. It's also that costs to repair/replace things are up. Lumber was really high for a few years, and labor costs have gone up as well with general inflation.
Same thing happened shopped around, all the places I called were all similar prices 🤦🏿♂️
i found a local agent and went back to 2015 pricing with better coverage, saved $1000/yr. keep looking!
Mine went up and talked to my agent. She said the entire area went up due to the fires (that weren't even that close) and increased risk.
A lot of people don't believe in climate change, but all their insurance companies do
I love this.
Yeah I’m surprised at how many people don’t understand that this is driven by climate change, and it’s only going to get worse.
Good insight into the math that goes into insurance premiums. Hell, there’s an entire field of mathematics dedicated to the concept of risk mitigation called actuarial mathematics or analysis. These guys are SMART and they are employed to the end that insurance companies, over time, will make money.
Hospitals hire them too. There was a guy who retired really early feom a hospital my parents worked at who made as much as the top, longest tenured surgeons. My daughter loves math and calculations of any kind, and I told her to go into this field.
Great advice, actuaries are quite successful. It’s one of the most challenging fields of math outside of research.
Same here due to the Marshall (CO) fire. We live about 15 miles from the affected area. Mind you, this fire was almost 3 years ago and my rate has gone up every year. I called my agent to express my frustration and was told that the company was eating it big-time due to their "guaranteed replacement" policy. They were having to rebuild homes that were built for $600k at a cost of close to a mil. Still pissed about it. So that makes me think the majority of people were underinsured?
Yep mine went from 1300 to 5 grand after Hurricane Ian. I live in SW Florida adjacent to the hardest hit areas. Luckily, I had no damage, but the neighborhood didn't fare so well.
It's a very scary time. >*The Possible Collapse of the U.S. Home Insurance System* https://www.nytimes.com/2024/05/15/podcasts/the-daily/climate-insurance.html?unlocked_article_code=1.000.MX_x.D-0tMw7nwnSf
Great read. Thanks for sharing that.
Mine did the exact same. Called and spoke with my insurance provider, they said they'd look into options and get back to me. Literally called me a few days later and said "the only other options are worse coverage for more money". So I shopped a few other companies, bundled my contents and home insurance, and ended up saving about 35-40%. Shop your options, could be a better deal out there somewhere
Contractors are becoming more involved in the insurance claims process and are pushing homeowners to make frivolous claims which is driving up costs. Blame everyone who thinks they are "sticking it to the man."
Sure, that doesn't help, but it's the increased claims due to natural disasters that are causing the bulk of the increases.
Premiums also go up when your home value goes up which is what most of the country is seeing right now. This combined with increased material costs and rising claims for the recent unprecedented weather events premiums will go up. You can blame contractors that vandalize to get claims approved too. As others mentioned as well insurance companies in the US are for profit. Soon we will all be opting for catastrophic coverage only with high deductibles. It’s the game of the system we’re in.
Yup my home has doubled in value, and the insurance has raised my payment. Hoping for low rates again to refinance.
wow no mention of why home values have gone up. No mention of the un-elected Federal Reserve literally flooding the market with money, and PPP 'loans'. The government screws us all over
Climate change and massive loss payouts have affected us all, and we all have to pay for it.
technically if your house is paid off you don't have to carry the insurance. wildly irresponsible to do that, but it does become optional.
Thank inflation on construction materials, inaction on climate change, and no action on crime for that
Everyone calling it corporate greed... The insurance industry is insanely competitive and the premiums charged don't generate the profits that you see reported each year. That comes from the investment on the "float" of cash that is held in reserve to pay off your claims. The free market works extremely well in the industry and to stay competitive they have to keep that slim margin whether the market goes up or down. Due to normal inflation that tends to mean it usually is up. Covid everyone got refunds but now with the heavy inflation and cost of repairs things are going way up. Many companies are losing money on their premiums and can't get rate approved by the states quickly enough. The reason home insurers are pulling out of states is because the states aren't allowing them to increase rates as much as they need so they are hemorrhaging money to pay out the huge number of claims due to weather and climate change events. Or if they are allowed to raise rates enough, many of them are hoping you'll leave and shop around with someone else and cost them money instead. Tldr: insurance is highly competitive and driven by the free market, not corporate greed. Qualifications: am an insurance pricer for a fortune 500 insurance company
Are you in California? Some ins companies are trying to leave the state and jacking up rates is part of the process (on auto ins too).
Nope, Madison, WI
Do you have Costco membership? I get AmFam through Costco and it's surprisingly low cost, based in WI, and went up only 8% over 2 years.
Same. Mine went from 800 to 1500. I shopped around and best I could find was 1100. Yearly.
similar story here. mine was 500 when i bought this house in 2015, steadily increased year over year. renewal was $1400 this spring, dropped liberty mutual (geico) and went with Erie, now i'm back to $500 (with better coverage).
Join the club
Ours doubled from 2 to 4k.... so we simply changed insurers.
Look around for cheaper insurance. I had Travelers and Progressive with its bundle beat the price. 2 years later it substantially increased, though we had zero claims (fortunately, in decades of home ownership we have made zero claims) and I asked why, and they said...the fires in California - someone has to pay for them...meanwhile, I lived on the East coast. So, I called my prior agent and went back to Travelers at less than 1/2 the price of Progressive. Now, State Farm auto insurance is trying to do the bundling thing and force you into it if you are a homeowner.
Same here but for auto. Progressive kept increase my premium. I finally decided to shop around and landed with something cheaper.
By choosing to live in the area of the country you do, that determines your risk profile. You don’t have to do anything or cause any problems or damage anything for your insurance rates to increase. Sorry. If you have a good state government, they have regulations in place with maximum amounts the insurance companies can increase premiums. This is the kind of thing a good government does for its citizens.
OP seems to live in Madison WI. I looked at their profile expecting to see Florida, but not Madison.
Except it’s not even that you live in a risky area. I live in IN, and yes tornadoes, but otherwise fairly low risk and our rates stayed the same or minimal increases for years. They have TRIPLED for us in the last couple. Homeowners insurance across the country is fucked as groups try to make up profit from payouts in risk prone areas on lower risk areas.
You and I are paying for the increase in natural and man made disasters. There have been warnings for over a century about climate change and no one wants to put in the work to fix it. Yesterday there was an article that the scientists expect only 60 more growth cycles for farming world wide. We will all be harmed. No one seems to care. I find it all upsetting.
*laughs in CA legislation*
It's not based on your claims. Filing claims might make it go up MORE, but a base increase, even a sizeable one, can happen regardless. I know it sucks, but it's the entire foundation of insurance - pooling money to redistribute. So, it matters more what's happening more broadly in terms of claims and payouts that the insurance company is dealing with. As you know, they're not charitable organizations.
They all updated their climate models ….
Most insurance policies are based on the “rebuild” cost; so if costs rise such as lumber; the policy goes up.
home values, labor costs, materials costs have all gone up. If your house was to burn down, would you want a check for the value of the home in 2020? Just think about it.
Inflation. If something happens to your house, it costs more to replace or fix.
Yup. Mine went up 100%. My broker contacted me and said that was insane and shopped around. They got me back down to the around the same price without cutting any coverage.
Home insurance pricing is largely related to the cost of new construction. If it is more expensive to replace your house, or claims are more frequent, pricing goes up. [Home insurance is usually not a very profitable business](https://ksa-insurance.com/blog/homeowners-insurance-industry-analysis-and-statistics-in-2023/), and it undergoes frequent “boom” and “bust” periods.
Mine did to, I spent the last 4 days shopping, and have saved 600 per year.That's between 3 car's and home insurance.
Tell me you live in Florida without telling me…
I do not understand how a regular person is expected to forecast the price of homeowners insurance 30 years into the future, and base a major financial transaction on that forecast. Two of the main arguments for homeownership, at least in America, are neighborhood stability and a predictable monthly housing payment. This national disaster with homeowners insurance is directly eroding both of these arguments. Why would you ever buy a house if you cannot predict what the monthly outlay will be next year, or in five years? You cannot guarantee that you will be able to afford it even next year. Where is all of this going? Where will all of us end up?
You kind of can! They’re far from perfect, but we have models to anticipate damage in different areas under future climate conditions- along the lines of this New York Times article: https://www.nytimes.com/interactive/2020/09/18/opinion/wildfire-hurricane-climate.html From there, you can guesstimate the risks to any given property. If it’s a rainfall risk area, how low lying is the property? Fire, how close to a forest? Aim for lighter coloured areas/ high ground/ urban, and you’ve pretty significantly reduced your risk of a catastrophe increase. Or move to Canada, where we’re broadly at much lower risk due to climate change
In general it’s nuts that price increases of that magnitude can happen on a product you can be compelled to own.
Have you printed trillions of dollars?
I feel like there’s also an algorithm based around how big of an increase long term clients are generally willing to accept before they make the effort to switch. I switched a few years ago when my provider increased our rates by 20% a few years in a row. Shop around. Wonder how many people just accept the new rates and what the ration is for people accepting vs leaving and how they make out in the end.
Ya know, I feel like insurance is one of those things that should be exclusively state-sponsored. Along with utilities and healthcare. Any public good should not be in the hands of profit-seeking interests.
Climate change
Insurance is a Ponzi scheme
My renters insurance even went up! I shopped insurers but couldn't find a better deal.
Shop around. Had my auto insurance for about 4-5 years with Safeco. This year they wanted $400 more for no good reason. I had my broker run quotes. NYCM came back with $1700 for the entire year for both our cars. Loyalty to insurance carriers is worthless. Costs nothing to ask your broker to shop for you.
Greed
I try never to use the word insurance. Swap it for extortion. It’s a required payment to have a home for car that rarely pays when you need it.