Homeowner's insurance (rant)

[Baz]

As everyone knows - when you have a mortgage you are required to have homeowner's insurance.

I've had it for the 17 years I've owned my current home. Plus a separate mandatory windstorm policy.

I only have $39K left on my mortgage and am thinking of paying it off rather than continue to (be required to) carry homeowner's insurance.

The reason is my home was built in '62 and it is insurance policy to require proof of updates on your home's infrastructure once your home has it's 50th birthday. I'm told the insurance company will accept what's known as a 4 point inspection, which covers roof, electrical, plumbing, and HVAC.

I have one of these 4 point inspections scheduled for Thursday but already know my 125 amp Federal Pacific electric panel will not pass muster and possibly my roof. They require a minimum of 3 year life left for a roof to insure the structure.

I don't mind doing upgrades when necessary but I want to do them on my schedule but I also understand how the insurance industry looks at things so as long as I have that mortgage - I'm pretty much at their mercy.

Unless I pay off my mortgage. I don't have the full $39K but could get it if I wanted to.

17 years here with no claims. Went through all the hurricanes with zero damage. My house is built like a bunker. Plus as a contractor in the trades - I have tons of acquaintances who could assist me should I suffer damage from a storm - on whatever I can't do myself - which is a lot.

I think my insurance is about $1,500.00 per year incl. windstorm. Not bad but the part about forcing me to do upgrades on their schedule....that part bugs me.

Has anyone gone through this as well?

[Evans, Marv]

I'll join in on this rant. I will be changing my homeowner's insurance -if I can. My premium bumped along increasing maybe $50/yr. for a long time. Year before last, it went up 38%. I talked to my insurance agent & asked how I might be able to lower the premium. He said I could get it back to the previous range by tripling my deductible - which I did, and the premium went back down to slightly higher than previously. I just received my new premium notice today. It went up by 55% over last year, and that includes the previously tripled deductible. Last year I asked a couple of agents how they could have raised my premium by 38%. Both answered, "Because they can." I live in a fire danger area in SoCal. The company I'm insured with (Farmers) doesn't write policies in the area anymore, it's the same with all other companies. Now the consensus seems to be they are raising premiums to force residents to drop policies with them. Others around here have had to go with the State sponsored program for insuring people living in fire danger areas, which I will probably opt for. President Eisenhower warned against the industrial/military complex. Now we have to worry about the political/corporate complex. I will be writing a letter sending copies to the State Insurance Commissioner, my State Senator, State Assemblyman, and CCing the insurance company. I know it will be dismissed, but at least I will feel better.

[Baz]

Good for you, Marv.

It feels like extortion to me.

I understand it's a business but why throw me in with the ENTIRE risk pool...I've never made a claim in my entire life for anything. Never even used my health insurance when I had it.

I have options!

[on2wheels52]

I didn't think anyone was a bigger insurance curmudgeon than me. Hats off Baz
We had a one year mortgage w/balloon payment we paid off (perhaps someone was surprised). I'll have to check tomorrow what our insurance premium is, am sure it has crept steadily up through the years.
I'm a big fan of self-insuring.
Jim

[TimT]

I don't have a mortgage on my home I have a Home Equity Line of Credit with the potential liability to my home for 100K. I have used around 37K of the equity in my home for some basic improvements to the structure, i.e. roof, insulation, windows... etc...

The Insurance carrier wanted me to carry insurance for the full assessed value of the home.. around $750K + liability + plus if I fart in the wrong place coverage, etc.

It took me really reading the fine print in the policy and after weeks of back and forth for me to have my policy modified..

In all I insured the 100K potential of the Equity loan, got a nice umbrella, and a replacement value of the structure...

For less than the whole package that was being forced on me...

Saving copies of emails sent by some of the insurers less knowledgeable customer service reps was helpful

Get some quote from other Insurance extortionists...when you get the quotes mention that you own the property outright.. ( they will discover of course if there is lien on the property if you commit to buying extortion from them)

[Typ616]

Originally Posted by Baz

I think my insurance is about $1,500.00 per year incl. windstorm. Not bad but the part about forcing me to do upgrades on their schedule....that part bugs me.

Mine in Tampa was $3200 per year. Think you have it bad ? ;-) And if you read it carefully, it had a major exclusion for Hurricanes anyway (deductible so high I doubt you would even hit that limit), and would't cover sinkholes. So really, all it did was cover a nuclear blast - chances are I'd be dead - and theft/fire, which is theoretically 20% of that premium... And flood was separate - $300+ more from FEMA !!! Still, "self insurance" as it's called is risky in beach communities in FL. Your call, but it's definitely a rip off !

[Baz]

Right on cue.......letter arrives today from my mortgage company.

"We understand you will soon be losing your insurance. If so - WE will supply it FOR YOU - but it will only cover your structure....and will be more expensive.


These people should be locked up.....

[Don Ro]

Baz, what's the value of your property?

[Baz]

Originally Posted by Don Ro

Baz, what's the value of your property?

Guessing around $250-300K, Don. Maybe more.

Hard to say given how the market is still jumping around a bit.

[Don Ro]

Originally Posted by Baz

Guessing around $250-300K, Don. Maybe more.

Hard to say given how the market is still jumping around a bit.

Pay it all off and be done with it, pal.
$39k? That's gas money for an entrepreneur.

[Baz]

Originally Posted by Don Ro

Pay it all off and be done with it, pal.
$39k? That's gas money for an entrepreneur.

I agree....that's probably how it will go down.

It's the principle.

I don't mind helping out these banks and insurance companies once in a while....but even a nice chap like myself has a limit.

[look 171]

Originally Posted by Evans, Marv

I'll join in on this rant. I will be changing my homeowner's insurance -if I can. My premium bumped along increasing maybe $50/yr. for a long time. Year before last, it went up 38%. I talked to my insurance agent & asked how I might be able to lower the premium. He said I could get it back to the previous range by tripling my deductible - which I did, and the premium went back down to slightly higher than previously. I just received my new premium notice today. It went up by 55% over last year, and that includes the previously tripled deductible. Last year I asked a couple of agents how they could have raised my premium by 38%. Both answered, "Because they can." I live in a fire danger area in SoCal. The company I'm insured with (Farmers) doesn't write policies in the area anymore, it's the same with all other companies. Now the consensus seems to be they are raising premiums to force residents to drop policies with them. Others around here have had to go with the State sponsored program for insuring people living in fire danger areas, which I will probably opt for. President Eisenhower warned against the industrial/military complex. Now we have to worry about the political/corporate complex. I will be writing a letter sending copies to the State Insurance Commissioner, my State Senator, State Assemblyman, and CCing the insurance company. I know it will be dismissed, but at least I will feel better.

I am in a fire zone as well. State farm was my insurance for years, I mean years. An umbrella policy so I never looked, but write them a check once a year and no claims. Comes my wife and she starts shopping for a new insurance because she felt we were paying to much. Found AAA and we were saving $2000 per month. But they would insurance fire zone. So I am stuck getting rape by State Farm. Tell me about the state sponsor programs will ya? Oh yeah, foundation has to be retrofitted so they can insurance you. What a bunch of rapist.

[LWJ]

Stop. Think. Homeowners insurance has two parts: property (which you are all complaining about and considering dropping) and liability.

First. I sell this stuff to businesses so I have a pretty good grasp of the industry. If you can afford to bear the loss, drop the insurance. I have told some of my wealthier client this very thing. If you buy insurance, purchase for a loss you can't bear. Liability comes to mind. Think about someone getting injured in your pool for example?

As for premium cost, ask your agent to shop it. I went from Liberty to Cincinnati and increased coverage significantly while dropping cost. Not that Liberty is uncompetitive but Cincinnati wanted the business. As for Florida? I don't know. A whole nuther world for property insurance.

Good luck!
Lary

[Baz]

Thanks Lary - my agent did mention retaining liability. Then we both agreed how outrageous it is that you can be sued for someone coming onto your property and getting hurt - even though you have posted "No trespassing" signs!

This is where a perimeter block wall makes sense....or a couple of these.....

[Evans, Marv]

Look171, I email or PM you info about the State programs after I do some research. The post above about the liability portion of the policy reminded me. They dropped their personal injury and loss assessment coverage on this latest policy. That was done unilaterally by them. On my last policy, they unilaterally dropped my Coverage A from 150% to 125%. They say to put these papers with my original policy. What good does it do to have the original policy when they can change any item they want going forward? The older I get, the more pissed I get about getting kicked around by corporations changing the rules (and being able to) to maximize the money they can squeeze out of you while continually reducing their services.

[look 171]

Thanks Marv. You aren't kidding about them kicking us around. they can turn on the money faucet when ever they want for no reason, for how ever long they wanted. I called them and inquire about the hike once several years ago. The person basically said, everyone else is going up just as much. He even suggested us to shop around.

jeff

[Tobra]

I have mandatory flood insurance on my property in Texas, that is above the dam, and could not possibly flood, ever, unless the sea levels rise 210 feet.

Leeches

[Baz]

I've all but made up my mind to pay off the mortgage and be done with insurance for a while. My electric panel does not need replacing - nor does my roof at this time. It's madness what they are asking me to do just to renew my policy....sheer madness!

Insurance doesn't prevent damage - it just provides some financial support should the need arise....the key words being 'should the need arise'.

For many folks, there's nothing wrong with being self-insured.

I'll make my decision by Friday....at high noon!

[look 171]

how would you deal with the slip and fall or the mailman who twist an ankle?

Our mail lady twisted her ankle at the neighbors and was limping for al bit. Her boss filed the lawsuit for her suing my neighbor. She tole me something about covering their ass? What BS?

[Baz]

Originally Posted by look 171

how would you deal with the slip and fall or the mailman who twist an ankle?

Our mail lady twisted her ankle at the neighbors and was limping for al bit. Her boss filed the lawsuit for her suing my neighbor. She tole me something about covering their ass? What BS?

Don't know but at this point I'm willing to take that risk.

Risk is the key word in all of this.

It's how the insurance company makes it's decisions.

It's how all of us who are independent thinkers should make OUR decisions also, IMHO.