How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

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A440
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How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by A440 »

We just got our renewal for a new policy we took out last year for homeowners. The renewal increase is $65. Doesn't seem too bad considering the cost of construction materials, but I was curious was others are finding at renewal time.
Last year, we took out a new policy with Travelers (through Geico), at a significant discount to our Stillwater homeowners insurance policy. We had a Stillwater policy for several years, because it was cheaper than our Travelers policy which we had for years prior to Stillwater. :?: Gotta love the insurance game. :happy
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by runner3081 »

Dollar amount is irrelevant, need % due to wild fluctuations in annual premiums based on location.

We increased deductibles, updated newly replaced items (roof/AC) and lowered our rate by about 15%.
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A440
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by A440 »

Fair enough...8.5% increase over last year.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by RickBoglehead »

With location differences, coverage differences, insurance credit score differences, house composition differences, deductibles, etc., a comparison is basically impossible.

Our policy went up 11.7%, and our increase was 6.9 times what yours was...

Our coverage was increased by 6.3% also.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by anon3838 »

25% increase and I did not make any policy changes nor any claims (in 20+ years!)
vasaver
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by vasaver »

Give GEICO a call -

We use GEICO as well - and had Travelers home insurance. The rate went up ~20% this year so I called GEICO. Turns out they have multiple home insurance providers and were able to quickly compare rates. We ended up lowering our rate ~20% from our old lower rate with Liberty (still through GEICO).
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Gill »

A440 wrote: Wed Jul 07, 2021 10:20 am Fair enough...8.5% increase over last year.
In other words a premium of $765? Count your blessings. :happy
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by gwe67 »

To make this semi-comparative, I'm paying $0.63 per square foot per year with 1% deductible.
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A440
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by A440 »

Gill wrote: Wed Jul 07, 2021 11:00 am
A440 wrote: Wed Jul 07, 2021 10:20 am Fair enough...8.5% increase over last year.
In other words a premium of $765? Count your blessings. :happy
Gill
Yep, lots of blessings to count.
I suppose considering how expensive everything else is in NJ I should be happy to pay $834 to cover our 2,000 sq. ft home from the 50's. I do have a $1,000 deductible.
I did call Geico and they ran the numbers with a few other carriers that turned out to be at least $100 or more.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by IMO »

I haven't checked per se as I'm one of those that tends to stay with our same insurer because it is a complicated mix of properties/cars/boat/drivers/bundled discounts type of interaction. If I see any big increase I may take the time/effort to shop all that around. But what it seems for many is that one has to continually change insurers if there new insurer just had a relatively low teaser rate. Some seem to play homeowner's like credit card reward programs.

It would be nice to see if long term homeowner's that have essentially kept their policies the same over a number of years, how much that has (or hasn't mirrored inflation). Unfortunately factors can change like claim history, etc. Based on many responses I've seen on this site, homeowner's insurance is an expense that seems to often vastly exceed inflation in many reported cases. There always seems to be reasons for this to be justified by insurers (such as a flood, large wildfire, etc) to raise prices, but there never seems to be anything ever happen on the actuarial side that ever lowers rates on a given year (ironic how it only seems to increase). I wonder how earthquake insurance coverage costs have been over the years?

The one thing I can't figure out is why insurers seem to be paying for brand new roofs without prorating the life/life of the roof? It's like insuring an old car and getting a brand new one if it's totaled. Seems this would help keep other's costs more stable with their insurer.

Increases in homeowner's, property taxes, and relatively cost of home maintenance seem to be things one should look at closely and plan when it comes to retirement expenses as these all seem to often exceed the CPI. Stealthy inflation. I like CA's prop 13 because it at least lets one plan on property tax increases even if inflation/appreciation were to be high for any period.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by EnerJi »

RickBoglehead wrote: Wed Jul 07, 2021 10:27 am With location differences, coverage differences, insurance credit score differences, house composition differences, deductibles, etc., a comparison is basically impossible.

Our policy went up 11.7%, and our increase was 6.9 times what yours was...

Our coverage was increased by 6.3% also.
I must be calculating something wrong, because my rough calculation shows you pay almost as much in homeowners insurance as I'm expecting to pay for a Jumbo mortgage in a HCOL area!
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by pshonore »

A440 wrote: Wed Jul 07, 2021 11:17 am
Gill wrote: Wed Jul 07, 2021 11:00 am
A440 wrote: Wed Jul 07, 2021 10:20 am Fair enough...8.5% increase over last year.
In other words a premium of $765? Count your blessings. :happy
Gill
Yep, lots of blessings to count.
I suppose considering how expensive everything else is in NJ I should be happy to pay $834 to cover our 2,000 sq. ft home from the 50's. I do have a $1,000 deductible.
I did call Geico and they ran the numbers with a few other carriers that turned out to be at least $100 or more.
One reason for a low premium might be a good "fire protection" rating. (Paid vs volunteer, distance to nearest hydrant, etc)
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by RickBoglehead »

EnerJi wrote: Wed Jul 07, 2021 11:59 am
RickBoglehead wrote: Wed Jul 07, 2021 10:27 am With location differences, coverage differences, insurance credit score differences, house composition differences, deductibles, etc., a comparison is basically impossible.

Our policy went up 11.7%, and our increase was 6.9 times what yours was...

Our coverage was increased by 6.3% also.
I must be calculating something wrong, because my rough calculation shows you pay almost as much in homeowners insurance as I'm expecting to pay for a Jumbo mortgage in a HCOL area!
I pay more for my homeowner's insurance than I pay for my monthly mortgage. I assume that's what you were referring to.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by vasaver »

IMO wrote: Wed Jul 07, 2021 11:19 am I haven't checked per se as I'm one of those that tends to stay with our same insurer because it is a complicated mix of properties/cars/boat/drivers/bundled discounts type of interaction. If I see any big increase I may take the time/effort to shop all that around. But what it seems for many is that one has to continually change insurers if there new insurer just had a relatively low teaser rate. Some seem to play homeowner's like credit card reward programs.
For me it was just a quick call to GEICO (not much effort at all). They cross shopped home insurance companies for me (Liberty is one of the options). It did not impact our auto and umbrella with GEICO.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by investor4life »

Went up 5% (about 100 bucks). Via State Farm, where I have been for 35+ years. Every year I tell myself I should shop around but end up chickening out, afraid that I will lose my “good standing” with SF (whatever that means).

I think rates have been going up due to the increase in the cost of raw materials and maybe because folks are spending more time at home (WFH). Correspondingly, auto rates fell some last year.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by canderson »

USAA - 25% increase. No claims, ever.

Live in Pennsylvania. They cited drastic rise in lumber for increase statewide.
akpk
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by akpk »

I got a 20% hike in the bill as well. Switched to another provider and got a lower rate. Rep told me that its best to check multiple places every year.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by MBB_Boy »

I have a reminder to check in September, but wanted to put in a plug for Gabi. It's 95% digital - they digitally connect to current insurance provider, they pull all the relevant info (no hunting on your part), and they give you a bunch of options that match coverage exactly (none of this price game insurers play when you ask for a quote and they "save" you money by changing things).

The non-digital part is a phone call at the end where they confirm what choices you want
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by talzara »

investor4life wrote: Wed Jul 07, 2021 10:14 pm Went up 5% (about 100 bucks). Via State Farm, where I have been for 35+ years. Every year I tell myself I should shop around but end up chickening out, afraid that I will lose my “good standing” with SF (whatever that means).
State Farm allows you to try out another insurer without losing your status at State Farm. As long as you remain claims-free and return to State Farm within 3 years, you will be reinstated at your original tier.

If you return to State Farm after 3 years, or if you file a claim with the other insurer, then you will start over as a new customer.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by supalong52 »

A440 wrote: Wed Jul 07, 2021 9:38 am Doesn't seem too bad considering the cost of construction materials, but I was curious was others are finding at renewal time.
I'm not sure why insurance would go up with the increase in cost of materials. You are only covered for your dwelling amount. If construction materials are more expensive, then your dwelling amount coverage would need to go up. Your insurance might go up in they deem your property more likely to require a claim. For example, homes in the West are likely seeing increases due to risk of wildfire, etc.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by talzara »

supalong52 wrote: Thu Jul 08, 2021 1:00 pm I'm not sure why insurance would go up with the increase in cost of materials. You are only covered for your dwelling amount. If construction materials are more expensive, then your dwelling amount coverage would need to go up. Your insurance might go up in they deem your property more likely to require a claim. For example, homes in the West are likely seeing increases due to risk of wildfire, etc.
Total losses are rare in homeowners insurance. The average homeowners claim is only $14,000. If this increases to $15,000 or $16,000 because of materials costs, these homeowners will still be fully covered even if their dwelling coverage remains unchanged.

Even for total losses, most homeowners are covered to 125% of dwelling value because they have extended replacement cost policies. As construction materials become more expensive, claims will have to use more of the contingency reserve.

Although insurers automatically increase the dwelling coverage limits at each policy renewal, they often follow a smoothed construction price index. At a time of sharp increases in costs, the smoothed index will lag the actual index.

To keep up with increasing claim severity, insurers must increase their base rates.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Rajsx »

Our Home Insurance in Florida with Heritage went up by around 50% on a 20 yr old house with original tile roof. We scrambled to find a policy with State Farm at 20% premium increase also with some reduction in coverage, as we do have our cars insured with them.

The Agent did say that everyone's home insurance cost has gone up really high in Florida, as few insurance companies have left the state with losses due to roof replacements by unscrupulous Roofers along with home owners.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Go Blue 99 »

We just received our renewal notice this week and have an 8% increase. Based on the breakdown, the increase was mainly due to our home being 1 year older now and losing part of our "new construction discount".

We bundle everything with Geico.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by ColoradoRick »

+17.5% - - but in medium to high COL; had wildfires within 1 mile 20 years ago and was cancelled by one of the big names. So I feel kinda stuck. GEICO wouldn't take my homeowner's and subbed it out. Price was so much higher than where I was at that it negated GEICO's savings on auto and umbrella. Downside of our homes appreciating so much.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by talzara »

ColoradoRick wrote: Sat Jul 10, 2021 11:51 am +17.5% - - but in medium to high COL; had wildfires within 1 mile 20 years ago and was cancelled by one of the big names. So I feel kinda stuck. GEICO wouldn't take my homeowner's and subbed it out. Price was so much higher than where I was at that it negated GEICO's savings on auto and umbrella. Downside of our homes appreciating so much.
GEICO does not write homeowners insurance at all. It's always written by another company.

You may carry homeowners insurance at any company that will take you, as long as its AM Best rating is high enough for the GEICO umbrella. The bundling discount on the GEICO auto policy is only 3%, so you just have to beat the price on the homeowners policy.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by 7eight9 »

+6.23% Safeco Insurance - Las Vegas, NV
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by MikeWillRetire »

Mine went down 10%. State Farm. Maryland.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by anoop »

18%

I’m in CA so I think it’s because of the destruction and prior year claims from wildfires.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by TJat »

Home replacement costs are up 15%+ YoY due to inflation in materials and labor. I’d expect everyone will see pretty substantial increases for the rest of 2021.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by EnerJi »

RickBoglehead wrote: Wed Jul 07, 2021 12:46 pm
I pay more for my homeowner's insurance than I pay for my monthly mortgage. I assume that's what you were referring to.
That's not really what triggered my comment. The crux of the question that was noodling at the back of my mind is: am I missing anything in terms of the value a particular insurance company can provide with their homeowner's insurance?

Setting aside the fact that properties will differ in terms of size, risk, rebuild cost, and so on, and assuming we are only talking about financially stable insurance companies, and assuming we understand the difference between an HO-3 and an HO-5 policy, are there good reasons to pay significantly more in homeowner's insurance for one company over another? Beyond customer service?

Thank you.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by gailcox »

Ours with Allstate went up 23%. North Texas had the deep freeze storm in February and we had a claim from a frozen water pipe than burst. We had a $1000 deductible (thank goodness) and a 23 year old policy. This was our second claim in 10 years. We were fortunate that our policy included pool parts replacements and just about everything that made our pool run was cracked. We are living in an apartment while the house repairs are still ongoing. Service with Allstate has been a challenge since our claim, they try to give us minimal money for replacement, we've had to fight every step of the way. We may look for quotes for homeowners from other insurance companies after this is all over.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (insurance).
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by IMO »

canderson wrote: Wed Jul 07, 2021 11:14 pm USAA - 25% increase. No claims, ever.

Live in Pennsylvania. They cited drastic rise in lumber for increase statewide.
So if lumber prices have dropped some now, you'll have to post in 1 year if USAA lowered your rate. Oh, but then it will be something else, like labor costs have now increased (be it the actual people who would rebuild your house, or be it people working for USAA). Or maybe it will be "our advertising costs have gone up 25%" since they seem to be pumping out TV ads left and right as if those eligible never knew they could sign up for USAA. :confused
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by fareastwarriors »

anon3838 wrote: Wed Jul 07, 2021 10:43 am 25% increase and I did not make any policy changes nor any claims (in 20+ years!)

Should probably try to do some comparison shopping...
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by RickBoglehead »

IMO wrote: Tue Jul 20, 2021 1:04 pm
canderson wrote: Wed Jul 07, 2021 11:14 pm USAA - 25% increase. No claims, ever.

Live in Pennsylvania. They cited drastic rise in lumber for increase statewide.
So if lumber prices have dropped some now, you'll have to post in 1 year if USAA lowered your rate. Oh, but then it will be something else, like labor costs have now increased (be it the actual people who would rebuild your house, or be it people working for USAA). Or maybe it will be "our advertising costs have gone up 25%" since they seem to be pumping out TV ads left and right as if those eligible never knew they could sign up for USAA. :confused
In 2020, USAA spent $500 million on advertising. Geico spent $1 billion. AMICA spends under $100 million. :mrgreen:

For those complaining about increases and threatening to leave their companies, when you hear / read about a major disaster, like a hurricane, wildfires, flooding, etc., who do you think pays for all that? Answer - YOU DO, because insurance companies pay out the claims and then raise rates to cover costs. Texas freeze, where homeowners lost power and weren't smart enough to then shut off their water and drain their pipes at least to the lowest tap/toilet (assuming they were home)? No problem, we'll catch you next year!
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by DetroitRick »

Latest premium increase was 6.2%, covering period April 2021 to April 2022. H03 policy with a few bells and whistles, northern Detroit burbs. Last year's increase was 5.1%. Dwelling coverage limitation was increased 5% for 2021-2022.

Finally got around to asking last week as to the impact of having a monitored alarm on this premium. Turned out to be exactly $21 per year discount - insignificant. Another aspect that seems to vary a lot by geography and insurer.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by tdm757 »

$3 or .25% in NJ - Nationwide / Harleysville Annual Home Insurance jump. Thought about calling my broker to re-shop.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Tubes »

Timely topic. I just got my renewal from Amica and my teeth nearly fell out of my mouth.

26% increase.

No claims on anything in the 6 years I've had them. I've kept my nose clean. When State Farm did this to me in 2013, I went shopping. It might be time to shop again, although it is such a royal pain.

Part of it has to be some of this roofing nonsense. We have all these shady outfits coming through getting people new roofs for "hail damage." Everyone is doing it, they say. Maybe I should too?
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by SubPar »

~30%, absolutely brutal. No claims whatsoever. Agent cited an increase in policy's dwelling limits necessary to keep pace with replacement cost estimate.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Carefreeap »

anoop wrote: Sat Jul 10, 2021 6:22 pm 18%

I’m in CA so I think it’s because of the destruction and prior year claims from wildfires.
Me too.

I also made the same assumption about the wildfires but it wouldn't surprise me if it's more complicated than that given the cost of construction and materials in the area.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by fungus_amungus »

Looks like I had an 8% bump covering April 2021 through April 2022. I can't complain given the comparison to the increases others have seen. I've got my home, auto, and umbrella all through Geico (and their partners), and I have been very pleased with them.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Cali4en »

Tubes wrote: Tue Jul 20, 2021 3:26 pm Timely topic. I just got my renewal from Amica and my teeth nearly fell out of my mouth.

26% increase.

No claims on anything in the 6 years I've had them. I've kept my nose clean. When State Farm did this to me in 2013, I went shopping. It might be time to shop again, although it is such a royal pain.

Part of it has to be some of this roofing nonsense. We have all these shady outfits coming through getting people new roofs for "hail damage." Everyone is doing it, they say. Maybe I should too?
Our Amica policy went up like 7%, which seemed reasonable given all of the hail and icepocalypse claims we've had here in Texas over the last year. Indeed, I thought that it might actually be low coverage-wise given the rise in materials and labor costs, so I called them about increasing our coverage limit even further.

The rep told me that Amica has some magic underwriting box that they put your information in and get a usually very accurate home replacement cost out of. She also told me that Amica generally applies a global modifier to existing policies rather than actually re-rating them in full each year, but that the modifier is often a little off (no surprise - it's often a bit high). Ours had not been re-rated in five or six years, but had instead just been auto-adjusted each year. Net result is that doing a full re-rate on our house resulted in a little over a 10% decrease in the estimated replacement cost of our house after years of auto-adjustments, which in turn drops the premium by about the same amount. If we had accepted the re-rate this year then our policy would actually have gone down in premium despite the overall rise in the premiums statewide.

So you might want to consider asking them if they've done the full re-rate lately. The downside is that whatever comes out of the magic box is what they'll want to use as your coverage amount, whether it is up or down. You can push that off by one year, but after that they will use the new re-rate whether you like it or not.

Incidentally, if you live in Texas (since you mentioned lots of hail claims), then you should absolutely get someone to look at your roof if you've had hail. Hail and wind can not be considered for underwriting adjustments on an individual basis in Texas, so there's no downside to filing a claim if you've got actual damage beyond your deductible.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Silk McCue »

6% increase Amica renewal this month in Orlando Florida.

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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by AD3 »

Carefreeap wrote: Tue Jul 20, 2021 3:48 pm
anoop wrote: Sat Jul 10, 2021 6:22 pm 18%

I’m in CA so I think it’s because of the destruction and prior year claims from wildfires.
Me too.

I also made the same assumption about the wildfires but it wouldn't surprise me if it's more complicated than that given the cost of construction and materials in the area.
Same boat, mine went up by 23%. My guess is the fires as well.
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Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Tubes »

Cali4en wrote: Tue Jul 20, 2021 3:54 pm
Tubes wrote: Tue Jul 20, 2021 3:26 pm Timely topic. I just got my renewal from Amica and my teeth nearly fell out of my mouth.

26% increase.

No claims on anything in the 6 years I've had them. I've kept my nose clean. When State Farm did this to me in 2013, I went shopping. It might be time to shop again, although it is such a royal pain.

Part of it has to be some of this roofing nonsense. We have all these shady outfits coming through getting people new roofs for "hail damage." Everyone is doing it, they say. Maybe I should too?
Our Amica policy went up like 7%, which seemed reasonable given all of the hail and icepocalypse claims we've had here in Texas over the last year. Indeed, I thought that it might actually be low coverage-wise given the rise in materials and labor costs, so I called them about increasing our coverage limit even further.

The rep told me that Amica has some magic underwriting box that they put your information in and get a usually very accurate home replacement cost out of. She also told me that Amica generally applies a global modifier to existing policies rather than actually re-rating them in full each year, but that the modifier is often a little off (no surprise - it's often a bit high). Ours had not been re-rated in five or six years, but had instead just been auto-adjusted each year. Net result is that doing a full re-rate on our house resulted in a little over a 10% decrease in the estimated replacement cost of our house after years of auto-adjustments, which in turn drops the premium by about the same amount. If we had accepted the re-rate this year then our policy would actually have gone down in premium despite the overall rise in the premiums statewide.

So you might want to consider asking them if they've done the full re-rate lately. The downside is that whatever comes out of the magic box is what they'll want to use as your coverage amount, whether it is up or down. You can push that off by one year, but after that they will use the new re-rate whether you like it or not.

Incidentally, if you live in Texas (since you mentioned lots of hail claims), then you should absolutely get someone to look at your roof if you've had hail. Hail and wind can not be considered for underwriting adjustments on an individual basis in Texas, so there's no downside to filing a claim if you've got actual damage beyond your deductible.
Thanks for the info. I just got off the phone with them before reading your post.

I'm actually pretty happy with their replacement estimate based on my current understanding of building costs. It is a tad high, but I don't think out of line considering a bit of a buffer. I don't think I'm going to ask for it this year. Right now, I'm going to eat this rise because when I compare it to my State Farm premium from 2013, it is only 5% more than that -- 8 years later.

However, I'm printing out your post and adding it to my file for things to check next year should a big rise occur again. I think I'm going to at least get a quote or two from other outfits in the meantime.

One more thing: I noticed Amica added a "roof year" to my declarations. This is new. The agent said homes with roofs under 10 years get a discount. They had the wrong year on mine, but it doesn't matter, it is 24 years old anyway, so no discount.

I'm not in Texas, but in a Southeast state where we can have inland hurricane and hail damage. I'm guessing the hurricane situation is impacting many states if they haven't had adjustments. Surprised the mention above about Orlando is so low -- but they may have adjusted FL already.
foamypirate
Posts: 129
Joined: Sun Jul 09, 2017 9:36 pm

Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by foamypirate »

Went down 5.4% for my 2021 renewal (back in January). With Homeowners Insurance of America (through Geico), in Texas. Fully expecting to get nailed next renewal after the snowpocalypse earlier this year.
Last edited by foamypirate on Tue Jul 20, 2021 4:50 pm, edited 1 time in total.
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Tubes
Posts: 321
Joined: Wed Apr 22, 2020 6:33 am

Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Tubes »

Anyone have any tips on getting quotes? I pretty much will have to do auto-home-umbrella in one shot and not a simple homeowner quote.
Cali4en
Posts: 6
Joined: Tue Jul 20, 2021 11:16 am

Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by Cali4en »

Tubes wrote: Tue Jul 20, 2021 4:32 pm
Cali4en wrote: Tue Jul 20, 2021 3:54 pm
Tubes wrote: Tue Jul 20, 2021 3:26 pm Timely topic. I just got my renewal from Amica and my teeth nearly fell out of my mouth.

26% increase.

No claims on anything in the 6 years I've had them. I've kept my nose clean. When State Farm did this to me in 2013, I went shopping. It might be time to shop again, although it is such a royal pain.

Part of it has to be some of this roofing nonsense. We have all these shady outfits coming through getting people new roofs for "hail damage." Everyone is doing it, they say. Maybe I should too?
Our Amica policy went up like 7%, which seemed reasonable given all of the hail and icepocalypse claims we've had here in Texas over the last year. Indeed, I thought that it might actually be low coverage-wise given the rise in materials and labor costs, so I called them about increasing our coverage limit even further.

The rep told me that Amica has some magic underwriting box that they put your information in and get a usually very accurate home replacement cost out of. She also told me that Amica generally applies a global modifier to existing policies rather than actually re-rating them in full each year, but that the modifier is often a little off (no surprise - it's often a bit high). Ours had not been re-rated in five or six years, but had instead just been auto-adjusted each year. Net result is that doing a full re-rate on our house resulted in a little over a 10% decrease in the estimated replacement cost of our house after years of auto-adjustments, which in turn drops the premium by about the same amount. If we had accepted the re-rate this year then our policy would actually have gone down in premium despite the overall rise in the premiums statewide.

So you might want to consider asking them if they've done the full re-rate lately. The downside is that whatever comes out of the magic box is what they'll want to use as your coverage amount, whether it is up or down. You can push that off by one year, but after that they will use the new re-rate whether you like it or not.

Incidentally, if you live in Texas (since you mentioned lots of hail claims), then you should absolutely get someone to look at your roof if you've had hail. Hail and wind can not be considered for underwriting adjustments on an individual basis in Texas, so there's no downside to filing a claim if you've got actual damage beyond your deductible.
Thanks for the info. I just got off the phone with them before reading your post.

I'm actually pretty happy with their replacement estimate based on my current understanding of building costs. It is a tad high, but I don't think out of line considering a bit of a buffer. I don't think I'm going to ask for it this year. Right now, I'm going to eat this rise because when I compare it to my State Farm premium from 2013, it is only 5% more than that -- 8 years later.

However, I'm printing out your post and adding it to my file for things to check next year should a big rise occur again. I think I'm going to at least get a quote or two from other outfits in the meantime.

One more thing: I noticed Amica added a "roof year" to my declarations. This is new. The agent said homes with roofs under 10 years get a discount. They had the wrong year on mine, but it doesn't matter, it is 24 years old anyway, so no discount.

I'm not in Texas, but in a Southeast state where we can have inland hurricane and hail damage. I'm guessing the hurricane situation is impacting many states if they haven't had adjustments. Surprised the mention above about Orlando is so low -- but they may have adjusted FL already.
I can't say for certain what it means for you since insurance works differently in different states, but I can tell you that they started doing the same "roof year" thing here. The same person who did my re-rate explained to me the explanation they had gotten internally.

Amica used to offer mostly RCV roof policies in Texas, so everyone had to deal with the depreciation angle. Given that roof claims in Texas are often on relatively newer roofs, the depreciation was often not much at all and the whole thing just added to Amica's overhead without really discounting the liability payouts. It also led to plenty of shenanigans with roofers playing games to credit depreciation back in various ways to the customers or gaming claims on really old roofs.

Amica decided to ditch RCV and instead offer only ACV policies, but to soften the blow they added in a rather hefty discount based on roof age. It drops a bit each year, but in the first year it is something like a 25-35% discount here in Texas due to our major hail/wind problems. Considering that the depreciation on a 5-10 year old roof is often only like a grand or so, the huge discount each year actually ends up costing less in the end despite the roof being covered as ACV rather than RCV. That is true for our roof anyway, which we just had replaced via an Amica claim back in 2019.

So theoretically the new ACV/roof year policy structure should save money for both Amica and customers while also cutting down on insurance fraud. It theoretically incentivizes people to put on a higher quality roof since the depreciation will be lower over time if you use a more durable product.

I suppose it also recognizes in the premium and policy the large costs of insuring older and less durable roofs in areas prone to wind and hail damage. We've had two hail claims here since 2003 and Amica paid out more on those two claims than they collected from us in total home insurance premiums over the same period.
aas
Posts: 30
Joined: Sun Dec 31, 2017 3:43 pm

Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by aas »

13% with state Farm. Called agent and they blamed it on construction materials cost increase due covid19.
tim1999
Posts: 3907
Joined: Tue Dec 16, 2008 7:16 am

Re: How much of an increase are Bogleheads seeing for their homeowners insurance renewal?

Post by tim1999 »

My 2020 renewal was a 25% increase. I shopped around and could not find a better deal for equivalent coverage so I kept it.
My 2021 renewal was a 2% increase.

I've never filed a claim on any house I've owned.
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