Homeowners Insurance Annual Increase

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k3vb0t
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Joined: Mon Jun 02, 2014 4:42 pm

Homeowners Insurance Annual Increase

Post by k3vb0t » Thu Apr 26, 2018 7:24 am

We just received our renewal documents for our homeowners insurance and, as it does every year, it's gone up again to the tune of $200.

I thought BHers would be able to guide me on some of my questions.

I'm going to list out the coverages in last year / this year format first.

Dwelling: $239k / $254k
--extended replacement: $59.75k / $63.5k
Separate structures: $23.9k / $25.4k
Personal Property: $179.25k / $190.5k
--contents replacements cost: covered
Loss of use: $95.6k / $101.6k
Identity Fraud Coverage: $30k
Building ordinance or law: 10%
Personal liability: $300k / $300k
Medical payments to others: $1k / $1k
Deductible (1%): $2,390 / $2,540

1. Each year the dwelling coverage goes up.
My understanding is this is to cover the increased cost of rebuilding the home. The increase this year is $15,000. In 2015 we were covered for $234k + $58.5k extended replacement. The two years after that we pulled it back to $239k because the jump in cost was ridiculous.

I understand prices of materials can go up, but 6%?

My agent has explained to me the extended replacement kicks in, so it's really like we are covered for (current year) $239k + $59.75k = $298.75k. New homes equivalent to ours sell for $230-250k, I can't imagine it costing $300,000 to rebuild my house. Should I drop my coverage back a little bit so that dwelling + extended replacement is more in line with rebuild costs?

2. Are there any other ways besides getting quotes elsewhere, to drop the price?

Every year I have to do this song and dance and it's getting annoying. My car insurance is mostly unchanged over the last 5 years, but every year my homeowners insurance jumps. We've already gone from a flat $1,500 deductible to a 1% of coverage deductible. Any other tricks?

My gut feeling is the insurer bakes in these increases and 90% of the population just accept it, end up over-insured for their homes, and lining the pockets of the insurer and agent. But I might just be a bit cynical.

mmmodem
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Re: Homeowners Insurance Annual Increase

Post by mmmodem » Thu Apr 26, 2018 7:56 am

This year's increase was quite dramatic. I got a 30% bump versus the previous year's ~10%. As with car insurance and internet, I do the song and dance every year. I call in to complain. Usually they find a way to lower my premiums. This year's premium was a no go. They gave me the same speech on rising costs and the like. Comparison shopping online revealed similar pricing across the board for my home. Apparently my insurance agent is telling the truth. The agent offered to increase my deductible to $5000 to ameliorate the increased premium. I opted for that.

bob60014
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Re: Homeowners Insurance Annual Increase

Post by bob60014 » Thu Apr 26, 2018 8:04 am

Have you factored in the increases may be due to where you live? I'm thinking hurricane, flood, earthquake areas.

Re: #2 Just shop around! Insurers love those that stay with them due to "brand or agent loyalty" and know that increases will be tolerated by many of them. Years ago we saw the light and began to shop home and auto policies each year. By doing so we are now getting better coverage at lower rates. We do keep an eye on replacement cost and other things to ensure we have the proper coverage. Interestingly, our rates have remained virtually the same for several years. But we still shop.

k3vb0t
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Re: Homeowners Insurance Annual Increase

Post by k3vb0t » Thu Apr 26, 2018 8:28 am

bob60014 wrote:
Thu Apr 26, 2018 8:04 am
Have you factored in the increases may be due to where you live? I'm thinking hurricane, flood, earthquake areas.

Re: #2 Just shop around! Insurers love those that stay with them due to "brand or agent loyalty" and know that increases will be tolerated by many of them. Years ago we saw the light and began to shop home and auto policies each year. By doing so we are now getting better coverage at lower rates. We do keep an eye on replacement cost and other things to ensure we have the proper coverage. Interestingly, our rates have remained virtually the same for several years. But we still shop.
That's the thing, I live in east Tennessee where nothing really severe happens. We had a bad set of storms several years ago with a lot of hail that did quite the damage, but it wasn't last year. Frustrating.

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Sheepdog
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Re: Homeowners Insurance Annual Increase

Post by Sheepdog » Thu Apr 26, 2018 8:43 am

My homeowner's insurance increased 7.7% this year and my auto went up 15.5%. My company is The Hartford thru AARP. I expected increases this year because of the amount of insurance payouts last year due much to hurricanes,fires and floods.

I have changed insurers often. That has been my only defense to high bills. Complaining to my present company does little in my experience.

I ask for quotes from the major advertised insurers, but also will go to independent agents who often have up to 30 companies to obtain quotes. For example, when my homeowners insurance went up 30% in 2014 following an increase of 18.5% the year before. I obtained quotes from 26 companies and changed again. This year's homeowner's increase is my first one since that change. Even so, my 2018 bill is still less than it was3 years ago. Similarly, my auto bill for 2018 is still less than my past insurer.


edit: Out of curiosity, I checked what I paid 10 years ago for homeowner's insurance.....same house, but 2 insurers later (3 different insurers in these 10 years). I am paying in 2018 $14 less than in 2008. IT USUALLY PAYS TO GET NEW QUOTES.
Last edited by Sheepdog on Thu Apr 26, 2018 8:49 am, edited 1 time in total.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

k3vb0t
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Re: Homeowners Insurance Annual Increase

Post by k3vb0t » Thu Apr 26, 2018 8:46 am

Sheepdog wrote:
Thu Apr 26, 2018 8:43 am
My homeowner's insurance increased 7.7% this year and my auto went up 15.5%. My company is The Hartford thru AARP. I expected increases this year because of the amount of insurance payouts last year due much to hurricanes and floods.

I have changed insurers often. That has been my only defense to high bills. Complaining to my present company does little in my experience.

I ask for quotes from the major advertised insurers, but also will go to independent agents who often have up to 30 companies to obtain quotes. For example, when my homeowners insurance went up 30% in 2014 following an increase of 18.5% the year before. I obtained quotes from 26 companies and changed again. This year's homeowner's increase is my first one since that change. Even so, my 2018 bill is still less than it was3 years ago. Similarly, my auto bill for 2018 is still less than my past insurer.


edit: Out of curiosity, I checked what I paid 10 years ago for homeowner's insurance.....same house, but 2 insurers later (3 different insurers in these 10 years). I am paying in 2018 $14 less than in 2008. IT USUALLY PAYS TO GET NEW QUOTES.
That's what I'm going to end up doing. Any thoughts on the dwelling + extended dwelling coverage above? That plays a big part in the cost -- how much they are insuring. Need to get that nailed down before I go get a bunch of quotes.

jminv
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Re: Homeowners Insurance Annual Increase

Post by jminv » Thu Apr 26, 2018 8:59 am

Try searching yourself for a lower cost insurance in addition to your agent. Something similar happened to my mother's home insurance this year (+20%) and I moved her to Homesite where the cost was lower than any agent was finding for me, the coverage was better, and it was below what her previous insurance was before the increase. I try to check rates once a year and I don't mind changing insurers. Calling your existing insurer will just have them playing with your coverage when what you want is the same (or better) coverage at a lower price.

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Sheepdog
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Location: Indiana, retired 1998 at age 65

Re: Homeowners Insurance Annual Increase

Post by Sheepdog » Thu Apr 26, 2018 9:13 am

k3vb0t wrote:
Thu Apr 26, 2018 8:46 am
Sheepdog wrote:
Thu Apr 26, 2018 8:43 am
My homeowner's insurance increased 7.7% this year and my auto went up 15.5%. My company is The Hartford thru AARP. I expected increases this year because of the amount of insurance payouts last year due much to hurricanes and floods.

I have changed insurers often. That has been my only defense to high bills. Complaining to my present company does little in my experience.

I ask for quotes from the major advertised insurers, but also will go to independent agents who often have up to 30 companies to obtain quotes. For example, when my homeowners insurance went up 30% in 2014 following an increase of 18.5% the year before. I obtained quotes from 26 companies and changed again. This year's homeowner's increase is my first one since that change. Even so, my 2018 bill is still less than it was3 years ago. Similarly, my auto bill for 2018 is still less than my past insurer.


edit: Out of curiosity, I checked what I paid 10 years ago for homeowner's insurance.....same house, but 2 insurers later (3 different insurers in these 10 years). I am paying in 2018 $14 less than in 2008. IT USUALLY PAYS TO GET NEW QUOTES.
That's what I'm going to end up doing. Any thoughts on the dwelling + extended dwelling coverage above? That plays a big part in the cost -- how much they are insuring. Need to get that nailed down before I go get a bunch of quotes.
Oh, yes. Go over everything....replacement costs (often way too high for this area. Some say that that replacement cost cannot be reduced, but my present insurer agreed to lower it last year. Know that your liability coverage is enough. You may wish to review your deductible. I don't want to consider claims for small things. Even asking the insurer about a possible claim and not making one will often cause an increase just because I asked a question! (That actually happened to me and just asking that question appeared as a claim on my C.L.U.E. insurance claims report for 7 years!) My deductible is $5000.
Good hunting.
Jim
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

BarbK
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Re: Homeowners Insurance Annual Increase

Post by BarbK » Thu Apr 26, 2018 9:30 am

Do you have separate structures? Do you need all that personal property? Do you really need the 30K of Identify fraud coverage?

On my bill they finally put a price on the $59K of external structures that I don't have. Prior years it was just bundled in the price. This year I called and had them remove the $456 for the non-existant external structures along with the $300K of personal property and it lowered the premium by $1K; 2018 premium with these changes is about the same as what I paid in 2017. I changed to a 10% hurricane deductible years ago.

I think early 2018 premiums are based on claims based in 2016. So the 2017 hurricanes, etc are not even built into the price yet.

k3vb0t
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Re: Homeowners Insurance Annual Increase

Post by k3vb0t » Thu Apr 26, 2018 10:14 am

BarbK wrote:
Thu Apr 26, 2018 9:30 am
Do you have separate structures? Do you need all that personal property? Do you really need the 30K of Identify fraud coverage?

On my bill they finally put a price on the $59K of external structures that I don't have. Prior years it was just bundled in the price. This year I called and had them remove the $456 for the non-existant external structures along with the $300K of personal property and it lowered the premium by $1K; 2018 premium with these changes is about the same as what I paid in 2017. I changed to a 10% hurricane deductible years ago.

I think early 2018 premiums are based on claims based in 2016. So the 2017 hurricanes, etc are not even built into the price yet.
I got the run around from the agent saying the separate structures was automatic based on the dwelling, same with identity theft coverage. So sounds like I need to find a way to either get it removed or to get an insurer that will insure me for the things I want insurance for.

Just one of those things that I didn't have the energy to fight the last few years, but reading it now... yea... makes sense to drop that.

SimonJester
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Re: Homeowners Insurance Annual Increase

Post by SimonJester » Thu Apr 26, 2018 10:37 am

BarbK wrote:
Thu Apr 26, 2018 9:30 am
On my bill they finally put a price on the $59K of external structures that I don't have. Prior years it was just bundled in the price. This year I called and had them remove the $456 for the non-existant external structures along with the $300K of personal property and it lowered the premium by $1K;

You removed your personal property protection or just lowered it?
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

BarbK
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Re: Homeowners Insurance Annual Increase

Post by BarbK » Thu Apr 26, 2018 12:44 pm

SimonJester wrote:
Thu Apr 26, 2018 10:37 am
BarbK wrote:
Thu Apr 26, 2018 9:30 am
On my bill they finally put a price on the $59K of external structures that I don't have. Prior years it was just bundled in the price. This year I called and had them remove the $456 for the non-existant external structures along with the $300K of personal property and it lowered the premium by $1K;

You removed your personal property protection or just lowered it?
Removed it entirely. Could not get replacement value for set amount; I don't have anywhere near $300K of personal property.

BarbK
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Re: Homeowners Insurance Annual Increase

Post by BarbK » Thu Apr 26, 2018 12:49 pm

k3vb0t wrote:
Thu Apr 26, 2018 10:14 am
BarbK wrote:
Thu Apr 26, 2018 9:30 am
Do you have separate structures? Do you need all that personal property? Do you really need the 30K of Identify fraud coverage?

On my bill they finally put a price on the $59K of external structures that I don't have. Prior years it was just bundled in the price. This year I called and had them remove the $456 for the non-existant external structures along with the $300K of personal property and it lowered the premium by $1K; 2018 premium with these changes is about the same as what I paid in 2017. I changed to a 10% hurricane deductible years ago.

I think early 2018 premiums are based on claims based in 2016. So the 2017 hurricanes, etc are not even built into the price yet.
I got the run around from the agent saying the separate structures was automatic based on the dwelling, same with identity theft coverage. So sounds like I need to find a way to either get it removed or to get an insurer that will insure me for the things I want insurance for.

Just one of those things that I didn't have the energy to fight the last few years, but reading it now... yea... makes sense to drop that.
Yes, that's the same BS I got all those other years. 2018 was the first year they put amounts next to the details.

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Blues
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Re: Homeowners Insurance Annual Increase

Post by Blues » Thu Apr 26, 2018 1:52 pm

This thread inspired me to call Amica and go over our proposed renewal policy coming due in June. Just bringing down the numbers to what I (and she) considered reasonable, (as opposed to what their computer had chosen,) saved us $200.

Awesome.

The gal, who was both knowledgeable and as nice as can be, said that she recommends calling at least every two to three years so that the numbers don't get out of line with reality.

:sharebeer
“Tactics without strategy is the noise before defeat.” - Sun Tzu | "Everybody has a plan until they get punched in the mouth." - Mike Tyson

Jags4186
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Re: Homeowners Insurance Annual Increase

Post by Jags4186 » Thu Apr 26, 2018 2:18 pm

We just did the whole shopping around thing and I can tell you—just go get an insurance agent and let them do all the work. Let them find you a bundle and go with it.

We were paying around $3000/yr from Geico for car insurance and I was getting home owners quotes. Best I could find was $1200 or so for the coverages I wanted.

Went to an insurance agent who get me equal car insurance & home owners insurance for a total of $2800/yr from NJ Skylands. Reviews say their CS isn’t the greatest. My hope is to never use the insurance, and if I do, $1400/yr in savings is worth waiting on hold.

quantAndHold
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Re: Homeowners Insurance Annual Increase

Post by quantAndHold » Fri Apr 27, 2018 4:04 pm

BarbK wrote:
Thu Apr 26, 2018 12:44 pm
SimonJester wrote:
Thu Apr 26, 2018 10:37 am
BarbK wrote:
Thu Apr 26, 2018 9:30 am
On my bill they finally put a price on the $59K of external structures that I don't have. Prior years it was just bundled in the price. This year I called and had them remove the $456 for the non-existant external structures along with the $300K of personal property and it lowered the premium by $1K;

You removed your personal property protection or just lowered it?
Removed it entirely. Could not get replacement value for set amount; I don't have anywhere near $300K of personal property.
Are you sure? People usually have a lot more stuff than they think.

We had a box stolen when we moved. When we added up the value of what was in it, it turned out that it was a $9000 box.

Alan S.
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Re: Homeowners Insurance Annual Increase

Post by Alan S. » Fri Apr 27, 2018 5:14 pm

Yes, please confirm that you were actually able to reduce your Cov B (additional structures) and Cov C (Pers Prop) below the automatic limits. This was never done historically for HO policies.

So if you had a detached garage or whatever, you got some use from Cov B. If not, then Cov B is a total waste, but the fact that most people have no exposure there should be baked into the total premium. The end result is that if you do have a detached garage, you end up with some extra value for the premium dollar, because Cov A can be reduced by the amount an attached garage would have added.

Cov C is also routinely overinsured by the automatic limits except for those few who have very high Per Prop values in relation to the building limit.

Companies cannot reduce their rates, but they CAN fudge on the so called "insurance to value" annual increase. If you have guaranteed replacement cost, try to talk them into reducing your limit as much as possible without losing the guaranteed RC. Your premium is lowered in proportion to the reduction, but your losses should still be paid in full due to the 25% added guaranteed replacement cost coverage. Since Cov B, C, and D are likely overinsured to begin with, you would still have adequate limits there.

Actual inflation is beginning to really tick up, so these annual premium increases will probably get worse before they get better. Inflation has been modest in recent years, but that could be coming to an end. Carry the highest deductible you can that makes sense, and do not purchase the unnecessary fringe coverages.

Yooper16
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Re: Homeowners Insurance Annual Increase

Post by Yooper16 » Fri Apr 27, 2018 6:09 pm

Other thing to consider is that new tariffs of up to 20% in addition to other tariffs already in effect, were imposed in the summer of 2017 on Canadian wood imports. Even here in the UP where we do have large stands of timber, much of the white wood is for pulp and not necessarily dimensional building timber. Vast majority of our large established wood lots were gone by the 1950s and the replants are only now beginning to come into a more valuable dimension. Gonna guess that that is true across much of the US.

Wood building materials are responsible for $20-30 per square foot of price. A 2000 sq ft house has about 40 to 50K of wood. So add 20% to this = $10k or so

Throw in a potential labor shortage, caused by disasters that have lured skilled trades away. How many years of labor are going to be needed to rebuild Houston? That can cause increase in labor in your area, even though your area was spared any damage. Same idea for insulation, shingles and any number of the basic elements that go into building a house.

boater07
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Re: Homeowners Insurance Annual Increase

Post by boater07 » Fri Apr 27, 2018 7:14 pm

I just experienced the same thing-Hartford increased premium 30 % and RC 10%. Would not budge on lower RC or premium.
What amazed me is the different RC numbers that the other bids came up with. The lowest number was 25% lower but not the lowest premium.
I went with new co that had RC 10% lower but 30% lower premium.
What I learned from this exercise is that not all define RC equally. ie building code,debris removal etc. The biggest item however, is maximum
replacement above insured value. To save on premium, I chose co that will only go 25% above insurance amount which is still more than Hartford
proposed.
Who knows what costs will be when a loss occurs?

MnD
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Re: Homeowners Insurance Annual Increase

Post by MnD » Fri Apr 27, 2018 8:24 pm

We collected insurance proceeds from the May 2017 Denver hail storm which was significantly more than the inflation adjusted premiums we had paid for the past 26 years. It paid the large majority of the replacement of basically the entire exterior of the home (all of which was tired-looking and middle-aged or older) for roof, siding, fascia, soffit, gutters, garage door, and outbuilding roofs on shed and gazebo and some personal property. The only significant difference we paid was the upgrade from existing steel to James Hardie siding.

Major PITA, but now that its all done it was a huge benefit to us going into early retirement. Turns out my independent agent had us in a very good insurance package paying for many things that "cheap" coverage that my friends and neighbors had didn't cover.

Both my independent agent and I have always been cognisant of shopping and switching carriers for best price and we both support selecting a high deductible. But my agent did us a huge favor by making sure in the event of a major claim that payouts would be favorable. :beer

k3vb0t
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Re: Homeowners Insurance Annual Increase

Post by k3vb0t » Tue May 08, 2018 12:59 pm

Starting my price quoting. Kind of embarrassed I waited so long to do this. We've been with current company for 6 years.

Offered new premium / Geico comparison: $1,283 vs $937
Dwelling: $254k / $254k
--extended replacement: $63.5 / $63.5k
Separate structures: $25.4k / $25.4k
Personal Property: $190.5k / $127k
--contents replacements cost
Loss of use: $101.6k / $50.8k
Identity Fraud Coverage: $30k / N/A
Building ordinance or law: 10%
Personal liability: $300k / $300k
Medical payments to others: $1k / $1k
Deductible: $2,540 (1%) / $2,000 (flat)

Notes:
I tried for the first quote to match the coverage but making adjustments where I saw fit. I couldn't get rid of separate structures, but was able to trim $60k off of personal property. Still think overinsured but that was as low as I could get it. Dropped loss of use as well -- my inlaws live 6 minutes from us and we could stay there in a pinch, alternatively $50,800 buys a lot of hotel or rental property time in result of serious damage. I dropped ID theft coverage because... I'm wary that the coverage is actually worth anything, but I suppose I should look to see at what the difference is and what the deductible is. (If it is tied to home deductible, no thanks as I don't want a claim if that happens.)

Geico comes with $5k in water backup as well. Do I need more?

What's more interesting is what happens if we start changing some things:
  • Again thinking I wouldn't make a small claim, I looked at what increasing the deductible and keeping all other coverages the same. $3k = $883, $4k = $822, $5k = $769.
  • We have a very healthy emergency fund, which is what I would consider using your homeowners insurance and self-insuring for first $5k). I am heavily considering the $5k deductible -- any thoughts on this?
  • With the savings we're going to net we could pick up a $1 million umbrella policy also through Geico. Thoughts?
  • Going to $5k deductible, $500k liability, $5k medical payments takes it to $785 -- so $16/year more from the $300k/$1k. That seems like a no brainer to pick that up. (I just checked and adding $25k in ID theft coverage takes it to $815, but again I'm wary of said coverage.)
Overall if I go with the $5k deductible, $500k liability, $5k medical + umbrella policy = $950, saving us still $333 over the homeowners-only policy from current company.

Not going to stop quoting at Geico -- tried Progressive, much more expensive and clunky website. I could track down some independent agents as well, but I'm also factoring in the time value. I could buy Geico right now and save a ton of money without having to do any more work.

Would love BH insight on all of the above.

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