My house insurance rates jumped 45% this year!
OhioGuy
renewal, and noticed the rates had gone up a LOT. 45% from last year, to be
exact.
I haven't changed anything, but I did notice that they mentioned something
about adjusting coverages upwards to take inflation into account as the
reason. Supposedly there is some Federal law that allows them to do that as
a "benefit" so that the insurance coverage isn't eaten into by inflation.
I thought about this a bit, and then realized that while they presented
this as a benefit for us, it of course really benefits them. Rather than
your coverage and payment staying the same from year to year, and them
agreeing not to mess with it without your say-so, they have an automatic
reason to increase things on you every year, then mention inflation as an
excuse.
However, I've realized that inflation really isn't an excuse, especially
this year. Over the past year, average home valuations in our area have
dropped about 5% - not gone up as they allege. Besides, they increased the
coverage only 2%, yet raised my rates 45% at the same time, with no reason
given.
Another aspect I've noticed is that we may be overinsured. Other similar
doubles in the area have been selling for about $60,000 over the past year
and a half. (I just checked) However, they have our place insured for
$92K - almost 50% more than we need. If this place burned down or
something, we would just buy a similar place nearby, not rebuild. As such,
it seems rather silly to have insurance far above what we would need.
Under "other structures", they have gone ahead and insured a wooden shed I
got for free and paid $150 to have hauled here. It is insured for $9,200,
with $1,000 deductible. Again, that seems silly, because the deductible is
more than I would pay for a replacement, if I even bothered.
They also have us down for $64K of personal property protection. However,
I'm pretty sure that the grand total of all of our possessions is more like
$4,000. Most of what we have we've gotten for free from friends or family,
or else gotten ridiculously cheap at estate sales, yard sales or thrift
stores.
Anyway, to make a long story short, a 45% jump in my rate from one year to
the next is very unacceptable to me. My payment is due by Sept. 11, but I'm
wondering if instead of just paying it I should send them a letter demanding
a better rate if they want to keep my auto insurance and home insurance
business?
If I do so, I think the letter would mention that the rate increase is
unacceptable, especially since the excuse given was inflation, even though
home values in the area have gone down in the past year.
Do you think it would be fair, or successful, to tell them that if they
want to keep my business, they need to send me a rate that is comparable to
last year's? I know that they make very little $ on the home insurance, but
perhaps if I threaten to take my car insurance elsewhere, they might be
willing. (they make the majority of their profits on car insurance)
Thoughts anyone? What do you do when you get an unexpected, and seemingly
unjustified increase on a big bill on the order of 45%? Have you been able
to successfully fight it?
Al Bundy
Yea, that should work. Tell them you are mad as hell and you won't
take it any more.
No question that a 45% increase seems out of line. As usual, you don't
provide any detail. Where did it go from and to? Perhaps you have been
underrated for past years. Maybe you owe them money! Right. Like you
would be willing to cough anything up. You are starting from now.
Check competitive rates and go from there.
Insurance companies have rate structures generally approved by the
state. There are categories and sometimes those categories include so
much for out-buildings and so much for personal items. If they don't
offer a category for "I have nothing", you have to take what's on the
menu. Also, the insurance company doesn't give a dam what homes sell
for on your block if they are going to be forced to rebuild your home.
Those construction costs have gone up. These costs are stated as a
function of published indexes that should be referenced right on your
policy statement. Again, probably not 45% in a year, but we don't have
any numbers to work with here. There are sometimes options to pay for
the new construction at only the existing old code when the building
was constructed with you paying for any needed upgrades. There are
sometimes policies that only pay the damage up to the market value.
This latter is what you sound like you want. Ask if it is available.
It may or may not be in your state.
In short, you have done none of the homework yourself. Hope you teach
your kids differently.
Samantha Hill - remove TRASH to reply
Samantha Hill - remove TRASH to reply
> I just got our statement from Allstate for our home insurance annual
> renewal, and noticed the rates had gone up a LOT. 45% from last year, to be
> exact.
Before fielding the question here, you should talk to your agent and
find out what's going on from them, because they are really the only
person who can give you the whole story.
Every time my agent has offered me more coverage as a convenience, I
tell them that frankly and honestly, I am not interested in getting more
insurance coverage than I am required to by law or by a third party as a
condition of mortgage, employment (in the case of a job where I might
have to drive my car), etc., because there is no point in making claims
against an insurance policy because it will just drive insurance costs
up, and I don't care about their drivel that I would "lose everything
you have worked so hard to get," because I could easily walk away from
it and would. In the end, they agree that I am right and they will
change my insurance to the least amount I am require to have upon my
request, but they have told me that it is an industry standard to keep
offering more coverage because other people appreciate it. *shrug*
I also read an article that talks about if you ask if a particular type
of damage is covered by your homeowner's insurance, they are allowed to
report it and treat it the same as if had you filed a claim for what you
are asking about on the silly presumption that if you asked, it must
have happened, but a quick Google search fails to turn up the article
someone had posted a while back, but that could possibly be what happened.
With that said, insurance companies have a standard formula for
calculating rebuilding costs based on construction costs per square
foot. They also have a standard formula for determining property costs
based on a certain percentage of either the home value or the
construction costs, I forget which at this point. They might also have
changed your deductibles, which could cause a big jump.
They also don't care that you are frugal and get things for cheap -- if
it burns down, they have to rebuild or replace it with what can be
gotten immediately. Your average insurance customer would be pretty
fried if their insurance company said, "well, you only paid $20 for that
sofa, so we are only going to give you $20 to replace it with," don't
you think?
Go Google for articles on how to keep homeowner's insurance down, take
notes, and confront your insurance agent and tell them that you want
your coverage modified as much as possible so that your costs are as low
as possible. That should solve things.
OhioGuy
increased the insurance coverage amounts without my say so. I want things
set in stone until/unless I give then notice in writing that I want to
change something.
Anyway, last year was the first year I added the home insurance. The cost
went from $272 last year to $395 this year, an overall increase of $123. I
was expecting the amount to stay fairly level for at least a few years.
There was nothing in the print about the price last year being an
"introductory rate", or anything like that.
Especially this year, with food and gas costs having gone up, I've been
focused on holding repeat costs down.
There are 2 things that sort of bug me about this:
1) It is just short of $400 by $5. It is almost like they did a study to
see how high they could raise the rates, yet still be under $400, because
some study told them that people would go hunting if it was $400 or more.
2) They just sent us a rebate check of about $15 for being "safe drivers",
only 4 days before we got the bill for the rate increase. It seems like the
satisfaction from getting a small, unexpected check was supposed to somehow
counteract the unhappiness of the large rate increase on our other
insurance. HELLOOO! We just want the lowest possible rates, not gimmicks.
Samantha Hill - remove TRASH to reply
>
> 2) They just sent us a rebate check of about $15 for being "safe drivers",
> only 4 days before we got the bill for the rate increase. It seems like the
> satisfaction from getting a small, unexpected check was supposed to somehow
> counteract the unhappiness of the large rate increase on our other
> insurance. HELLOOO! We just want the lowest possible rates, not gimmicks.
Are you saying that your HOMEOWNER'S insurance sent you a rebate on your
homeowners' insurance for being a safe driver? That sounds more like
the Allstate AUTO insurance thing that they do for people who don't get
in accidents. I remember seeing a commercial with the guy from The Unit
that said that Allstate does that for auto insurance.
I did save money by changing to a different insurance company (switched
to Farmers insurance and then to Liberty Mutual), so do shop around but
make sure to ask the insurance company if the rate they give you is a
teaser rate, because sometimes insurance companies do that.
Al Bundy
Helloooo!
Who said your insurance rates were supposed to remain even just
because you want them to?
The fact that your car insurance rate went down is not related in any
way to the homeowner's.
No, the insurance company is not pricing your insurance so it pops up
under $400.
It could well be that you are lucky to have ANY home insurance. They
are not mandated to insure homes on your block. One of the reasons you
are trying to move is that the schools are bad. Maybe the rest of the
neighborhood is bad too. In fact it must be, based on the price you
paid for it and your estimate of value. It just ain't the Taj Mahal.
Sometimes insurance companies continue to insure in such areas by
insuring to a higher level. It could also be claims are skyrocketing
in your area.
The bottom line is from this and other posts that you lack situational
awareness and that is a very dangerous place to be for a family man
(person).
Ron Peterson
> Thoughts anyone? What do you do when you get an unexpected, and seemingly
> unjustified increase on a big bill on the order of 45%? Have you been able
> to successfully fight it?
Talk to your insurance agent, there might be an error causing your
rates to increase.
I had an error on the address of my house causing the homeowners
insurance to be double.
--
Ron
Marsha
> I just got our statement from Allstate for our home insurance annual
> renewal, and noticed the rates had gone up a LOT. 45% from last year, to be
> exact.
Check around. Do you use an independent agent, who routinely checks
your rates with other companies? How's your credit rating? My
insurance company uses that to base my rates. I have excellent credit.
House insurance is $409.00/yr - replacement coverage $125,000 home,
$12,000 garage, personal property $84,000, loss of use $24,000,
liability $300,000. Deductible is $500.00.
Marsha/Ohio
Lou
"OhioGuy" <no...@none.net> wrote in message news:g98j7q$a2k$1...@aioe.org...
> I just got our statement from Allstate for our home insurance annual
> renewal, and noticed the rates had gone up a LOT. 45% from last year, to
be
> exact.
>
> I haven't changed anything, but I did notice that they mentioned
something
> about adjusting coverages upwards to take inflation into account as the
> reason. Supposedly there is some Federal law that allows them to do that
as
> a "benefit" so that the insurance coverage isn't eaten into by inflation.
I don't know if there's a law covering this or not. When I bought my
homeowners insurance, this was offered as an option. I thought it was a
pretty good idea. I'd estimate that prices have gone up close to 20 times
what they were when I first became aware of the price of anything except
penny candy. Come to think of it, I don't think there is such a thing as
penny candy anymore - candy bars that cost a nickel or a dime way back when
are a buck or two now.
> I thought about this a bit, and then realized that while they presented
> this as a benefit for us, it of course really benefits them. Rather than
> your coverage and payment staying the same from year to year, and them
> agreeing not to mess with it without your say-so, they have an automatic
> reason to increase things on you every year, then mention inflation as an
> excuse.
>
> However, I've realized that inflation really isn't an excuse, especially
> this year. Over the past year, average home valuations in our area have
> dropped about 5% - not gone up as they allege. Besides, they increased
the
> coverage only 2%, yet raised my rates 45% at the same time, with no reason
> given.
Subject to the terms of your mortgage, it's up to you how much coverage you
buy. Whoever holds the mortgage probably wants to be assured that they'll
be paid what you owe if the place burns to the ground.
What you're covered for depends on your policy. Me, I'm covered for
replacement cost - if the place burns down, they'll pay to rebuild it.
Regardless of what's happened to the market value of my house in the last
couple of years, construction costs have gone up.
> Another aspect I've noticed is that we may be overinsured. Other
similar
> doubles in the area have been selling for about $60,000 over the past year
> and a half. (I just checked) However, they have our place insured for
> $92K - almost 50% more than we need. If this place burned down or
> something, we would just buy a similar place nearby, not rebuild. As
such,
> it seems rather silly to have insurance far above what we would need.
Well, I'd rather have a nice new house, with an up to date furnace and a new
roof. But if you'd rather an older place with appliances that need
updating, it's your choice.
> Under "other structures", they have gone ahead and insured a wooden shed
I
> got for free and paid $150 to have hauled here. It is insured for $9,200,
> with $1,000 deductible. Again, that seems silly, because the deductible
is
> more than I would pay for a replacement, if I even bothered.
Assuming you could find another one for free.
> They also have us down for $64K of personal property protection.
However,
> I'm pretty sure that the grand total of all of our possessions is more
like
> $4,000. Most of what we have we've gotten for free from friends or
family,
> or else gotten ridiculously cheap at estate sales, yard sales or thrift
> stores.
And how many years and how much effort did you spend finding that stuff?
Would your friends and family step up to the plate and refurnish your house?
And again, would you rather have an old couch in the living room or a new
one? But judging from the tone of your posting history, $64K is probably
high for your personal property, even if all the old stuff was replaced with
new.
> Anyway, to make a long story short, a 45% jump in my rate from one year
to
> the next is very unacceptable to me. My payment is due by Sept. 11, but
I'm
> wondering if instead of just paying it I should send them a letter
demanding
> a better rate if they want to keep my auto insurance and home insurance
> business?
If you think you're overinsured, then the sensible course of action would be
to call your agent and talk your coverage over. I don't see any advantage
to demanding something that you may be able to get by asking politely.
> If I do so, I think the letter would mention that the rate increase is
> unacceptable, especially since the excuse given was inflation, even though
> home values in the area have gone down in the past year.
>
> Do you think it would be fair, or successful, to tell them that if they
> want to keep my business, they need to send me a rate that is comparable
to
> last year's?
Why would you back yourself into a corner? What will you do if they say
sorry pal, that's what it costs this year? Have you shopped for insurance
with other companies to see if you can get a better price? For all you've
posted here, it may be that you're with the lowest rate company in your
area.
> I know that they make very little $ on the home insurance, but
> perhaps if I threaten to take my car insurance elsewhere, they might be
> willing. (they make the majority of their profits on car insurance)
I don't know anything of the kind - I've always heard that they make most of
their money on investing the premiums, and pay claims on those profits. I
don't know if that's accurate or not, but financial investments haven't been
stellar performers lately, and the poor market performance of their
investments could explain the increase if it is.
Lou
"Samantha Hill - remove TRASH to reply" <sam...@TRASHsonic.net> wrote in
message news:48b7ec7b$0$17153$742e...@news.sonic.net...
> OhioGuy wrote:
> > I just got our statement from Allstate for our home insurance annual
> > renewal, and noticed the rates had gone up a LOT. 45% from last year,
to be
> > exact.
>
>
> Before fielding the question here, you should talk to your agent and
> find out what's going on from them, because they are really the only
> person who can give you the whole story.
<<snipped>>
> Go Google for articles on how to keep homeowner's insurance down, take
> notes, and confront your insurance agent and tell them that you want
> your coverage modified as much as possible so that your costs are as low
> as possible. That should solve things.
I'd agree with just about everything you've said here, except the word
"confront". This doesn't have to be an adversarial situation.
Lou
"OhioGuy" <no...@none.net> wrote in message news:g98sdf$jbn$1...@aioe.org...
> Well, I was more focused on the 45% increase, and the fact that somebody
> increased the insurance coverage amounts without my say so. I want things
> set in stone until/unless I give then notice in writing that I want to
> change something.
Take a look at your policy - it's likely you did give them permission to do
this by signing a policy with a provision for automatic adjustments.
I remeber back in the '90's it went the other way - insurance company
investments were doing so well that coverage increased without cost
increases. I even have a fuzzy memory of some poeple getting cost decreases
but wouldn't swear to it. If times were good and things were swinging that
way, would you still be so insistent on no changes allowed without your
written permission?
> Anyway, last year was the first year I added the home insurance. The
cost
> went from $272 last year to $395 this year, an overall increase of $123.
I
> was expecting the amount to stay fairly level for at least a few years.
> There was nothing in the print about the price last year being an
> "introductory rate", or anything like that.
>
> Especially this year, with food and gas costs having gone up, I've been
> focused on holding repeat costs down.
Food and gas aren't repeat costs?
> There are 2 things that sort of bug me about this:
>
> 1) It is just short of $400 by $5. It is almost like they did a study to
> see how high they could raise the rates, yet still be under $400, because
> some study told them that people would go hunting if it was $400 or more.
>
> 2) They just sent us a rebate check of about $15 for being "safe drivers",
> only 4 days before we got the bill for the rate increase. It seems like
the
> satisfaction from getting a small, unexpected check was supposed to
somehow
> counteract the unhappiness of the large rate increase on our other
> insurance. HELLOOO! We just want the lowest possible rates, not
gimmicks.
So send the check back.
Samantha Hill - remove TRASH to reply
>
>> Go Google for articles on how to keep homeowner's insurance down, take
>> notes, and confront your insurance agent and tell them that you want
>> your coverage modified as much as possible so that your costs are as low
>> as possible. That should solve things.
>
> I'd agree with just about everything you've said here, except the word
> "confront". This doesn't have to be an adversarial situation.
No, it doesn't have to be adversarial, and I wasn't thinking of it that
way when I used that word.
James
> I just got our statement from Allstate for our home insurance annual
> renewal, and noticed the rates had gone up a LOT. 45% from last year, to be
> exact.
Coverage is usually a percentage of the house so your shack is
automatically given a limit. It does not mean they'll pay you that
amount. They will just pay you what it cost to replace the shack.
You don't save anything by lowing that limit. You can cut cost by
increasing your deductable. I raised it from $250 to $2000. I figure
if the house burned down $2000 less isn't going to make much
difference.
You might want to take your renewal to several companies and ask them
to give you a quote. You can then ask your agent to match the low
bid.