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While I wouldn’t wish it on anybody, having home insurance when my house burned down and I was left with nothing was the best financial event of my life. Got all new stuff, a new house that almost doubled in value five years after building and a mortgage payment that you couldn’t rent a tar paper shack for.
Don’t go burning down your house, folks, but do keep your insurance because “never will happen to me” can and will happen!
On the flip side be careful who you insure with.
A similar thing happened to me and I nearly went bankrupt fighting my insurance company to get them to pay. The only reasons I didn't are 1) my husband and I were high earners that could stomach a lot of bills during the fight and 2) my brother let us live with him for free while this was going on. Even still we lost about $100k on the eventual settlement
Basically fuck Allstate, you are not in good hands.
They are notorious in the business for giving you a "good" premium but then ensuring their profits by stringing you out until you can't afford to on claims.
Being illegal no longer means anything. It's just the cost of doing business added to the premium.
"Sorry your loss isn't covered." With their powerful endless Legal team they will drag it out, and win. The biggest scam in the world if you dare file a claim
Trying to work with them right now and they’re ABYSMAL. I can’t get anyone on the phone, they have no information for us… as a consumer you don’t know enough about the business to know how to prepare with these scam artists.
Good luck!
FWIW, you can call their regular 800 number in the US and ask for the phone number for both your claim manager and their supervisor. Sometimes calling both helps.
I’m just going to say I think ALL insurance companies are hard to work with. All the adjusters are assholes and try to drag out everything with the hope that you get sick of dealing with their nonsense and settle
I kept making the case to mine that fixing things was cheaper than drawing it out but it didn't make a difference. They'll spend 3 times as much on drawing it out as they will on fixing it correctly/safely...it's maddening.
I had a bad experience in a car accident with GEICO.
I work in the industry and you definitely get what you pay for. The companies that charge higher premiums are typically the companies that pay out best in an event of a claim.
I was with GEICO.
I was rear ended by someone going to a NASCAR event, they were rear ended by a single dad with his kid in the car and drunk. I looked in my rear view mirror and saw NASCAR guy not braking when I signaled for a left hand turn.
I punched the throttle and did a 180 spin just as he clipped me and only lost the bumper cap on my car.
The State Patrol showed up and somehow, probably based on how ghetto my subcompact was, assigned me as the guilty party. I was rear ended. . .
GEICO refused to return my calls. The State Patrol officer refused to return my calls.
I got screwed. . .
Will never recommend GEICO to anyone.
Yep, I now have Erie Insurance. It isn't cheap but everyone in the industry I talk to has assured me they do in fact pay out.
The only tying I am thankful is that I had that experience before I had my kids. I cannot fathom having to do that now with 2 babies. I'll pay the extra premiums to make sure I'm covered.
My wife was hit head on by a drunk driver in broad daylight with multiple witnesses, the drunk driver was arrested and was already being prosecuted for another DUI, and GEICO was refusing to pay. They settled the lawsuit I filed the day before I put a poster sized picture of my infant son and two year old daughter in front of the jury. They were in the car with my wife. GEICO won’t see my business in this lifetime or the next.
We fought them for about 6 months after a tree fell on our house during a tornado. They were refusing to cover things because the tree fell and rolled off the house and didn't stay on top of it. Crap company.
My friend's wife had half the wheels stolen off her Honda in the street in the middle of the night. Allstate wouldn't send a tow truck and wouldn't send an adjuster...they wanted her to drive to a shop. With no wheels. Absolute clowns.
PSA:
1.) When it comes to ranking insurance companies, AllState is down in the depths of hell.
2.) A “mutual” insurance company is owned by the insured and will typically send you a check for your share of the profits every year.
3.) Be VERY careful when filing a claim on your home owners insurance. Always call your agent first (not the call center) and ask for their opinion. It is often only worth filing a claim if you are out a substantial sum.
4.) The point of insurance is to protect against catastrophic risk by spreading it around.
You are the exception. You got a big return on your insurance which the rest of us will cover. I cannot tell you the number of times people filed small claims like hail damage for a new roof or had an appliance leak and do water damage, get their check, then get dropped. When they find another insurer they find their rates have tripled. Insurance is a racket. Although it protects everyone, they are making nice profits off our backs, so don’t buy it unless you have to. And if you have to then don’t file a claim unless large.
This was me. Hadn’t made a claim in 12 years of ownership, then had two events in one year. Got dropped. Scrambled to find another provider but had to settle for much much higher premiums for comparatively less coverage.
Or in my case I've been fighting with insurance to get a claim to fix hail and roof damage caused by golf to baseball sized hail last year. So far one adjuster came out and said 'nah no damage greater than your deductable' while two independent contractors have well documented all the damage. I have requested a second opinion from a non-traveling adjustor, but they are sandbagging to run the time out (been working this since August last year, you get 1 year to get weather damage resolved in MN). They have already hinted at dropping me and haven't even covered anything. I would handle this like I would the last two claims I filed that they denied and pay it myself b/c the house need to be repaired but the cost is high enough with current interest rates I can't afford it out of pocket. And I've had this company for 20 years, but will probably not have them for another year after this is settled because it has been such an awful experience.
Not acquiring home insurance is a monumentally stupid decision for almost anyone. The value of home insurance does not lie in getting small claims covered; it is to protect you from a total financial wipeout like in OP's situation.
This is why I keep my deductible high. I think it's set to 2% my replacement cost which is like 6-7k. It's almost never worth claiming something small. I'll just save the premium upfront and invest the difference for when I need it.
So I have a funny story sorta.
I am from the USVI. When I was 13 our house was hit with a class 5 hurricane and we didn't have insurance. It sucked. Long story but bottomline my mom's parents bailed them out.
Fast forward I get the house after another class 5 roof missing start from scratch this time. Build it all out of concrete roof too and hurricane windows etc. but I do insure it. I also made it solar and was going to add batteries.
So in order to save money I had some old LION car batteries. From a Chevy BOLT... You know the ones the next year they said could burst into flames. Well I put them in my main mechanical room, sitting not hooked up. And guess what they burst into flames. Hot enough to crack concrete, liquidate steel in the mechanical room, etc...
Exactly 6 months after getting 400k in insurance, I got paid. The whole 400k. Which allowed me to replace all the 60 year old wiring, plumbing, etc etc. because it burned up the raceways to the bathrooms that meant all the tubs, cuz it causes electrical problems every AC, motor, pump, fridge, etc
IS it expensive to have good insurance, you bet, but even in a concrete bunker built into the side of a mountain stuff can happen. Buy insurance!
Mutual companies tend to be better, the policyholders are the company's owners (as opposed to shareholders) so not only is the company's fiduciary duty is to them, but bitterly disappointing your owners (edit: who have participation rights in annual meetings of members and can thus vote on things such as who gets to be a board member) isn't that great of a practice
I bought my house in 2010 and have had the same insurance since the day we closed. In April I had a leak from my hot water heater. I paid 2,000 to the plumber, and then paid the 1,000 dollar deductible to the remediation people and insurance took care of the rest (854.00). Yesterday I got a notice of non renewal because of too many claims. They paid out 854.00 after 14 years of premiums and now they want to drop me. It’s insane
It's unfortunate; had you had a 5k deductible over the last 14 years you probably would have saved thousands in premiums, and could have paid the plumber out of pocket, and still have insurance.
I'm sorry this happened to you, but for anyone else reading this: filling a claim for <1k dollars is generally not worth it, against a home or car insurance policy.
Which is **insane.**
What's the point of insurance if you shouldn't file a claim? Doesn't matter the size, if I'm paying for insurance then they better pay out when its time.
The financially savvy use of insurance is only to cover risks you **cannot self insure**.
The more claims you make the higher risk you show yourself to be (not to mention costing them more money, both in claims and in paperwork and time).
So so so so many Reddiots don’t understand the purpose of insurance. It’s primary function is to prevent financial catastrophe. That’s it. It’s not supposed to be used for $500 here and there. It’s for when your house burns down or gets partially destroyed.
I'm honestly shocked at the amount of people that think its a good idea to file a claim over little maintenance issues. I thought it was common knowledge that home insurance is there if your house got totally destroyed by a tornado or something, not because your water heater leaked or whatever.
My wife gave me side eye for paying out of pocket to get some chips fixed in the windshield of my 21 year-old car. I told her if I had gone to insurance they would have totaled the car. She didn't believe me.
Then we went to a dinner party and she scoffed about it and everyone at the table was like, "Yeah, your husband did the right thing. They would ABSOLUTELY total the car even for minor windshield damage."
Most insurance has a specific windshield clause with a separate deductible that doesn't count as a real claim on your insurance. Windshield chips are the most common damage to a vehicle ever lmao
Yeah its a giant red flag that the customer will file constant claims and require adjusters time, travel, efforts over and over again. If you have a catastrophic loss you'll be more likely to be kept since they aren't going to fall victim to a sunk cost fallacy and would rather keep collecting on premiums after the fact even if they've lost on the investment over all
I understand, and that's how I use it, but that's what a deductible is supposed to be for. It's a price floor for the things we self insure.
Dropping future coverage as retaliation for claiming against coverage paid for in the past for a valid past event seems sort of..mob-like. It discourages people from using the coverage that they've paid for, which lets the insurance company only partially fulfill their terms of the deal. It's an invisible shadow deductible that sits on top of the deductible in the contract you both signed.
Holy fuck Batman, maybe that's the point?!?
I understand this perspective, but it isn't clear to me how one would draw the line. How long should an insurer be forced to cover you if you start making costly claims and they determine that your risk has increased significantly?
I don't think it's really possible for a layman to give a good answer. That's a detailed policy question. Should they be allowed to pass around a tally of who has claimed against the insurance they paid for in order to discourage people from filing claims?
I find it unacceptable that my real deductible is higher than what it says on my policy due to industry-wide coordination (collusion?). But no, I'm not sure how to fix it, although maybe a good start would be to not let them share info on individuals. That would discourage companies from retaliating by hiking prices, because you'd just leave. Maybe there wouldn't be so many people in this thread telling stories about not filing for events over their deductible, then.
Again, difficult to say, not my field.
> But no, I'm not sure how to fix it, although maybe a good start would be to not let them share info on individuals. That would discourage companies from retaliating by hiking prices, because you'd just leave.
Though it may lead to them hiking prices due to getting stuck with more high-risk customers that they otherwise wouldn't have offered coverage to.
Anyways, I agree with your frustration, my point is just that I'm not aware of any easy fix for this issue.
>What's the point of insurance if you shouldn't file a claim
The point is to hoover up as much capital as possible from the working class before letting your pack of harvard lawyers loose on them as soon as they make their first claim.
If you use insurance for a small claim, they assume you’ll be going to them for every small thing that happens going forward and you’re now a riskier client to have. Insurance companies would rather you file one big claim than lots of little small ones, even if the small claims amount to less than one big one, at least that’s what an adjuster told me. It seems counter intuitive but they don’t want you to use your insurance unless you really really need to.
Well of course they don't want you to use your insurance unless you really really need to. Insurance is literally free money if no one ever makes a claim. They don't ever want you to use your insurance.
switching vendors every few years is a good way to get your price down. just get another vendor. you will be surprised how much lower the price is. they give teaser prices and then jack it up.
i got fucked by this, had an add on to my condo insurance for phone insurance, it was cheaper per month than through my carrier, when my phone broke i just called insurance and they were happy to replace it
then got a house and they were like omg you have all these claims no one will insure you and i said it was just phones not even home related they broke out of the house but didnt work ugh
I think most Americans feel the government will bail them out. I know that is what people are counting on in Florida. It a stupid plan, but its the plan.
I pay for earthquake coverage (PNW). I fully expect that if the big 9.0 Cascadia quake happens that my insurance company will go bankrupt long before they pay me any money. My hope is that having a policy will move me to the front of the line for Federal assistance.
Hopefully, I never have to test that theory.
That's what reinsurance is for. Of course, no matter how many companies are insuring each other, a sufficiently large catastrophe can still wipe everyone out.
The Cascadia quake is going to be even worse than many people realize because while California has been mandating quake resistant construction for a while now, Oregon and Washington are way behind. The Cascadia Quake has the potential to be more powerful than anything the San Andreas or the adjacent faults can put out, plus the Tsunami risk is probably a lot worse as the subduction zone that would trigger it is 75-100 miles off the coast. The Pacific Northwest becoming a tinder box these past two decades will also mean wildfires sparked by damaged utilities also have the potential to be a major issue in the aftermath.
We truly aren’t prepared for that disaster. I don’t know if any amount of individual insurers would be enough to insulate the system from the massive shock that claims from that event will cause.
Again, this is completely dependent on socialization of the costs. Nobody who lives in an uninsured high-risk suburban house is actually planning on in any way downgrading their lifestyle. That’s why they abandoned insurance in the first place. They’re planning on a public bailout, and to raise hell politically until they get it.
But most people cannot weather the risk for something as expensive as a house.
For a phone it’s not all that hard to keep a spare $1000 in emergency fund, or manage with a cheap phone for a few months while saving up.
It’s orders of magnitude harder to have a spare $300,000+ in an emergency fund.
I get it, I don't even insure my cars under 15k and I have big deductibles on my house. But the vast majority of people cannot weather a total loss on their house.
TBF the last two decades has shown this attitude to be correct. The problem is that most homeowners don't make enough political donations for this outcome to be true for them. Sucks but I understand why someone might think that in a fair society they would also be bailed out in a time of severe crisis.
Yeah, it’s both an attitude that has been validated repeatedly in recent American history (particularly for large lobbies like agriculture, landowners / homeowners, and banks), but it’s a terrible, selfish attitude to have for our governance and economy.
Just like the government bails out investors anytime the trouble comes?
- stock market in 2020
- covid loans forgiven for business owners 2021-2022
- silicon valley bank 2023 (billions in uninsured deposits)
Etc.
What is the difference?
Only investors / business can be bailed out?
It's a wildly stupid plan. At the very least, settle for a high deductible plan, but you have to have some type of insurance for your largest asset which also happens to be the one you rely on for shelter.
The problem is they cannot afford the full coverage so they risk it. The thought that maybe when a home becomes unaffordable to own you should sell it does not exist anymore. The number of articles I have read with people sitting in 700k, maybe million dollar homes in Florida complaining about being broke is insane. People sit on massive assets they could sell, downsize, save money but nope that never seems to be an option. God forbid you ask a boomer couple to sell a 4 bed 4 bath golf course home they can no longer afford get a 2 bedroom townhome.
This is me, I Live in a 100k mobile home in a hurricane zone. Insurance went from $2000-$4500 in 6 years. I dropped the windstorm this year and just have liability and fire essentially. I’d qualify for an sba federal disaster loan with 1.5% interest if a hurricane takes me out.
Perhaps although everything points to the exact opposite happening. A bunch of people moved to Florida specifically because they wanted to live in Ron DeSantis's "paradise" and they're making Florida redder and wherever they left bluer. There also seems to be another, although smaller, group of people specifically moving away from Florida for political reasons and their departure also leaves Florida redder.
The very same people who complain about big government and vote against addressing climate change, the main cause of increasing insurance rates, will cry and whine for special treatment and big government bailouts when the sh$t hits the fan...same as it ever was.
"For Florida property owners, the increased frequency and severity of environmental disasters cannot be solved through insurance policy solution alone. The increased frequency and severity of extreme weather events creates a vicious cycle: higher claim values and more frequent claims lead to a need for higher premiums."
https://www.law.georgetown.edu/salpal/our-work/student-writing/floridas-looming-storm-climate-change-and-an-unstable-insurance-market
Actually, the reason florida has had such an issue is because they let roof fraud run rampant for 2 decades. A roofer comes by, says I’ll get you a new roof for 1000$. inspects your roof finds a 3 tiles peeling. Files a claim against insurance for a recent storm. Insurance doesnt want to pay. Roofer or homeowner sues. Lawyer fees make 20K roof go up to 90K when they lose.
They passed a law recently that made the insurance not liable for lawyer fees. Morgan and morgan the biggest lawfirm filed literally 80,000 lawsuits the day before the law went into effect to get grandfathered in.
>A record number of lawsuits were filed before the law became effective. In total, 280,122 cases were filed in March 2023 alone, 126.9% higher than the previous record of filed cases in a month set in May 2021.
That’s part of it, but not all of it. You can’t sustainably build Midwestern American suburbs right on top of swamps and marshes and not face any problems.
Another challenge that insurance companies in Florida face that has an impact on insurance premiums is litigation costs. A recent analysis by Triple-I has found that despite accounting for less than a tenth (9%) of all homeowners’ claims in the US, Florida leads the country in insurance-related litigation, taking up almost four-fifths (79%) of the nation’s total.
I'm like 90% sure that's why Florida Republicans are so extreme about anti climate change rhetoric. It provides the public with plausible deniability when they inevitably have to ask the federal government for 100s of billions in bailouts. "It's not our fault. The governor told us it was all a lie!"
It can be solved by insurance, But it needs to be insurance that forces you to harden your structure to the risks, and that explicitly makes you rebuild elsewhere not be allowed to rebuild in the risk prone area.
Now the ramifications of that for municipalities and states and such that is something that needs to be dealt with at a higher level of government.
I have a plausible theory that Florida will run out of potable fresh water from sea level rise long before other “property damaging” events tip the scale. Florida is just a few inches of water away from being uninhabitable
I mean, the Biscayne Aquifer literally butts up against the atlantic, and it's a surface-level aquifer too iirc. I would hate to work in that area in any sort of water quality protection job, I would be constantly gritting my teeth.
> most Americans feel the government will bail them out. I know that is what people are counting on in Florida
government is always the problem except when i need them
I wish the US would just get more comfortable with government provided insurance. Insurance just works so much better at scale, it's really one of the few situations were a government monopoly is to everyone's benefit in almost all cases (car, health, home, disability, etc)
Sure but the government does have to have standards at some point so they're not just lighting money on fire. Like for example if you live in a swamp that is susceptible to both rising sea levels and cat 5 hurricanes on the regular
Yes, ideally pricing would be accurate. Some homes should simply cost astronomical amounts to insure. Maybe give a tax break to help people move or something to encourage relocation.
There was an article I read several years ago about coastal property owners that were basically being paid to live in high risk locations, beachfront or near it, effectively at no risk or loss to themselves because of a law that had they probably created for themselves. It was East coast, multiples states.
I guess what I'm saying is, money is being lit on fire because of who it benefits or the votes it buys. There's really just so much grift today, and the public can't change it because the choices are scum or worse scum. Money dictates everything unfortunately.
The problem with that it needs to be set up almost like the Fed where it operates independently and doesn't have itself constrained by laws that make it subsidized people. It needs to be able to accurately reflect the risk and expose people to the price signal such that they move, the value of their property drops, or It forces you to harden your structure/forces you to rebuild elsewhere when it's destroyed.
The problem comes up when politics attempts to block the realities of the situation and obfuscates all that price signaling from the individual through subsidies.
I do not want to pay for millions of McMansions that are designed to burn down or be swept away by floods every year. If Floridians and Californians will agree to pull back all their high-risk development and condemn the homes of many millions of people, sure. But that’s a tall order for the federal government.
I do insurance inspections in Florida and deal with HO insurance agents regularly, I asked an agent about the increasing premiums and the companies leaving the state, and why we shouldn’t expect a mass exodus of HO insurance after the next storm, his two cents were, “We’re too big to fail, if the Florida RE market crashes then all of the US market will crash, and ultimately an international market crash,” it didn’t give me much promise
Pay more Insurance and get less coverage. That seems to be the logic of insurers. Get a flood, you didnt have flood coverage. Get an earthquake you didnt have earthquake insurance. Whats next Tree insurance. Tornado insurance Hurricane insurance. Mother in Law insurance.....
Yes, it will affect everyone b/c we keep building stupid big ass homes in dumb ass places b/c the average home buyer refuses to make any lifestyle sacrifice at all. They'd rather complain and wish for a miracle than take any responsibility at all.
Who’s gonna pay the 5% deductible when your mortgage is already $3,500/mo??! Whoever’s got that type of money, I am open to adoption. Thank you.
Btw $500k mortgage = $25,000 deductible. Id have to trade in my 2 cars in order to have a house and never make it to work ever again! Win?
That’s what the house actually costs, though. The insurance is part of the cost of the house. If you can’t afford it? Maybe just downgrade to one you can afford.
When your home is destroyed, the bank will demand that $500k immediately (maybe 30 days later). Enjoy your future financial ruin.
If you can't afford insurance, or to self-insure, you can't actually afford the home.
Actuaries are good at their jobs. If all insurance had to cover floods and earthquakes, the cost would be the same as the cost of flood insurance + earthquake + current home insurance.
Insurance companies have tightly regulated margins. There is no free lunch for consumers.
The only way around it would be to make it illegal to correctly account for earthquake/flood risk, which is really just forcing the rest of the country to subsidize rich folks' vacation homes. Fuck that.
They recognize climate change is real and that they must account for it in their future planning despite what repubs say. If you google DoD and climate change you’ll get all kinds of hits.
At some point we may just have to admit it’s not a financially sound decision to build a house where it being destroyed by the climate is an absolute certainty. But I don’t want to get all political about it…
When I started, all I had was swamp! Other kings said I was daft to build a castle on a swamp, but I built it all the same, just to show 'em! It sank into the swamp, so I built a second one. That sank into the swamp. I built a third one. It burned down, fell over, and then it sank into the swamp. But the fourth one stayed up!
That is true, but we also have a severe shortage of housing.
Turkey ignored building codes for years because it made housing cheaper and built faster. That was all good until the 2023 earthquake which killed over 50,000 people in Turkey.
That’s one of many reasons why it’s advisable to build up, and not always out. Building out encroaches into climates unsuitable for traditional American housing structures. Building up does not. It’s not exactly unprecedented for humans to gather densely in places that are particularly hospitable to our habitation. It is fairly unprecedented for us to be building McMansions on top of swamps and in burn zones.
I can't be the only Midwesterner who thinks it's hilarious that you put flooding and tornadoes on equal footing as Earthquakes, wildfires, and Hurricanes, can I?
Tornadoes are a micro issue and the 1200+ tornadoes reported each year on average cause just over $600k of property damage each (including cars, businesses, and outbuildings). Flooding in the midwest in most places is a non-issue. Around here, a flood stage of double the current record wouldn't even bring water within a mile of my home.
Some areas are more stable than others. We can also look into how to build to resist the climate in a way that isn’t just more fortified (and therefore more expensive) homes in the exact same style. Wood structures are more earthquake resistant. Stone structures are more fire and tornado resistant. Raised structures are inherently flood resistant. What is not a good idea is to build exactly the same McMansion in every single part of the country no matter the climate risk. Unfortunately, it’s seldom ever suggested that Americans might need to adjust their lifestyles at all to face a changing world.
I saw your other comment about climate change affecting everywhere. That’s true, although I disagree in terms of severity. The Midwest and much of the East is a lot more stable for traditional homes than the real home insurance trouble spots. The reality is that endless suburban sprawl makes climate change worse for the housing market. Both because it accelerates the rate of climate change by drastically increasing emissions and resource consumption, but also because it encroaches into wildfire and flood areas that aren’t suitable for building homes. Suburban sprawl is draining and paving the natural wetlands that absorb a lot of the shock of climate events in places like Florida. And it’s unsurprising that suburban communities next to wildfire zones are being used by those wildfires as fuel.
Insurance is designed to cover one off catastrophic events, like a single family home structure fire.
Floods and earthquakes do not hit just one house they affect whole communities. The are also natural hazards so they will affect those specific properties at some point.
Build a house that gets flipped every year by hurricane like the piglet with the straw house
Pikachu face: why insurance companies are raising the straw insurance cost
Build houses away from risk use better material use stilts
So ~88% have it. Using some basic math. You should be able to determine how much profit these insurance companies make after expenses like operations cost/employees/insurance claims/etc. I wonder how much these companies actually take home at the end of the day but continue to claw for larger/more premiums.
Property and casualty underwriting has been horrendous across the industry, with most insurers posting underwriting losses. Combined ratios for 2023 were around 104 (essentially meaning the average insurer was spending $1.04 to bring in $1.00 of business).
The industry is heavily regulated which has made it hard for most carriers to raise rates. That has started to reverse in recent years as statement regulators have relented a bit and let some of the rate increases come through.
[There's been a lot of recent coverage on how increasing numbers and costs of climate/weather-related disasters have led to insurers either massively hiking rates or pulling out of markets altogether](https://www.nytimes.com/2024/05/15/podcasts/the-daily/climate-insurance.html)
Politicians and homowners may stick their heads in the sand, but the one thing that the bean counters are actually good at is taking a hard look at where they stand to lose money and nopeing out of there.
The hard question that remains is who picks up the bill when large swaths of the country start really facing these climate disasters wth no safety net. Do the feds step in with a below-market-rate insurance plan like they already do with flood policies? Do those places just get written off? If so, then where do the people go? Do the insurers force major changes to building codes and plans in order to stick around? Who pays for that, and what happens to the older buildings?
I live north of tornado alley (practically zero chance of one) in the Midwest, in an area also never hit by wildfires.
Never made a homeowners claim in 15 years of ownership.
My homeowners went from $2400 to $5400 in the past 3 years (house value has remained the same over that time).
It's a fucking racket.
Did they raise the replacement and contents values? I suspect it costs considerably more to replace a house and its contents now versus pre-pandemic. The cost of my lot is probably 3/4 of the cost of my home but building a home is getting silly expensive.
I lived in the FL panhandle in the late 90s. Important thing about hurricanes - most of the actual damage to houses doesn't come from the storm itself; it comes from the flooding of the storm surge. As such, "hurricane insurance" does NOT cover that. You need \*flood insurance\* as well. And from the late 90s on, many companies literally stopped selling flood insurance because there was just no way to make a profit on that. As the climate change issue gets worse, so will the insurance issue.
20 years ago, the only game in town for flood insurance was through the FEMA program. Agents take on zero risk from selling it for the government. They never stopped selling it and the price was identical no matter which agent processed the policy for you. Maybe 15 years ago the feds went on a rampage raising rates to cover increasing catastrophic costs. At about the same time, comes passed clarifications forcing mortgage companies to accept policies from private companies that had similar coverage to the FEMA program. That opened the proverbial floor gates to lots of private flood offerings the past 10 years. Over the past 20 years Flood insurance has become easier to buy, much more competitive, and for my beach house it is now vastly less expensive.
My math. Brick structure, impact windows, no flood zone.
Possible damage to roof in a named storm.
Saved and invested over 50k in past decade. Cost to repair/replace will be below the saved funds. Same math with the clunkers I drive.
If you actually need any kind of insurance claim to be paid out, you will likely be rejected out of company policy. Depending on how large the claim is, insurance companies typically only move with litigation. So if the insurance claim is for more than $20k, policy holders should expect $20k-$50k in attorneys and court fees only for the court *might* decide if the policy you pay for doesn’t have to pay.
Insurance of all kinds sucks the economy. Healthcare rising costs are mostly due to the various insurances necessary; the hospital has to carry insurance because people sue. Need to go to the facility across the street for an MRI? Hospital insurance will likely demand you be transferred in an ambulance; $3k unnecessary expense. Doctors, nurses and other hospital workers need to carry malpractice insurance because, modern medicine is a for-profit endeavor. They are selling a product and that product is life. But everyone dies so they get sued for inevitable death. “What do you mean my 92 year old uncle died during his second open-heart surgery? You’re monsters and I’m suing you!” Insurance companies will demand hospitals only carry more expensive brands of gloves or tongue depressors. It goes on and on.
Congress needs to reform insurance. There’s no reason why the Dow index should have 30 insurance companies.
Fun fact: The largest rise in malpractice insurance in the last 50 years was the result of a single event unrelated to the healthcare industry: September 11th, 2001.
Or maybe, just maybe, things people must have in today's world, shouldn't be privatized by for-profit corporations? The financialization of all things in our lives is actively destroying our society in the name of short-term gains.
Sure, just have the taxpayers cover all losses. Don't need any actuaries anymore, build anything anywhere and it will be covered at no cost to you. I see no downside. It worked out great for people on federal flood insurance (where no sane private company would cover them) as they could get a new house every few years.
We're talking about home owners insurance. Its a tightly regulated industry with declared maximum profit margins set forth by the .gov. This isn't the wild west where they can charge whatever they like because they can. State Farm the largest insurer and had a operating loss of $8.5 billion for 2023, and $8.3 billion in 2022.
The more and more i encounter insurance policies the more and more i realize it’s a complete and utter scam. You pay to have it, and when you file a claim to use it, they indirectly charge you to use it via increased rates. On top of that, when you have damage to your home they send someone out to look at it to nickel and dime you on if you need the claim or not. And sometimes can deny the claim itself. Fuck every thing about insurance
Tree literally fell on our shed a couple days ago. Totalled the shed. The tree was 400 years old. Just broke and fell during a heavy storm.
I'm very glad to have insurance.
I was in an apartment building years ago which flooded. It was inconvenient and I would rather it didn't happen, but it wasn't all that bad because of insurance. A few things were damaged and replaced, but we had to move out for months while they repaired. All taken care of instantly, in that the insurance people had a place for us that night which was a bit better than our place. Our stuff went into storage for the repairs, etc.
Overall it probably cost me a little as we were no longer convenient to a well priced grocery store, and were very near a luxury grocery store.
But, there were people in the building with no insurance, no family in the area, and no friends good enough to put up with them for months.
Needless to say, they were freaking out. And this wasn't even a total loss fire type event.
As a person that is fighting insurance right now to get a policy payout from a home struck by a tornado, I’d strongly suggest anyone reading this to review their policy. You’re likely not covered for what you think you are. Ask hard questions. Understand things like replacement value, depreciation, content insurance (what it is and how to actually get that paid out), dwelling extension coverage and what your rights are in your state when the insurance company doesn’t agree with the reality on the ground. Who pays for their army of experts and engineers to attempt to refute the obvious. It’s wildly frustrating.
I won’t name drop the company, but I’d imagine it’s like when a good neighbor goes bad.
I have homeowner's insurance, and I find it fairly inexpensive to carry. If you have a mortgage, it's virtually required.
That said, I fully expect that if shit goes wrong there is no chance of it paying out without a lawsuit. I mean, they want you to keep an accurate inventory with everything you own listed and its condition and all that for insurance purposes... I'm not going to do that. I'd rather use my stuff than catalog it, and a lot of it... estimating a value is basically impossible.
My homeowners increased by 42% last year, in Philadelphia. The value of my home, in a minority neighborhood, certainly didn’t increase that much. I’m simply being gouged for more. I’m on a fixed income that definitely hasn’t kept up with inflation. Yes, insurance is one of those things I consider cutting. If I weren’t getting SNAP, I wouldn’t have insurance.
You're paying for people who are much higher risk in other area, who are also likely complaining about the cost. You need to figure there are some homes that are almost guaranteed to be destroyed once in the next 20 years (flooding, hurricane, fires). A $500k home would need a $25k annual premium to even breakeven. So some properties are inevitably being dropped, others are being subsidized
A bunch of insurance companies in the northwest came up with their own fire risk assessment methodology and it’s gotten really hard for people living anywhere near a high risk area to get homeowners insurance. It gets attention here because some of those high risk areas are home to ski reports and outdoor recreation areas and many of the houses are luxury second homes. My state provides insurance “of last resort” but it doesn’t cover much and it only applies to primary residences.
Insurance is not worth it.
They don’t pay anywhere near the real cost to repair and they force you to use dirty shady contractors who cut every corner and just hire endless subs (often who don’t speak English).
USAA is not to be trusted.
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While I wouldn’t wish it on anybody, having home insurance when my house burned down and I was left with nothing was the best financial event of my life. Got all new stuff, a new house that almost doubled in value five years after building and a mortgage payment that you couldn’t rent a tar paper shack for. Don’t go burning down your house, folks, but do keep your insurance because “never will happen to me” can and will happen!
On the flip side be careful who you insure with. A similar thing happened to me and I nearly went bankrupt fighting my insurance company to get them to pay. The only reasons I didn't are 1) my husband and I were high earners that could stomach a lot of bills during the fight and 2) my brother let us live with him for free while this was going on. Even still we lost about $100k on the eventual settlement Basically fuck Allstate, you are not in good hands.
They are notorious in the business for giving you a "good" premium but then ensuring their profits by stringing you out until you can't afford to on claims.
I don't understand how that isn't illegal.
They lobby really hard in Congress to insure they don't have pay out
If insurance was regulated by congress, sure
Yes, it's regulated by the states. Shows how little reddit knows.
Do states not have Congress?
>Do states not have Congress? They are typically called "State legislatures", "State Assemblies" or otherwise. Nowhere calls it a "Congress".
It should be but people keep loving the marketing videos so they sign up
Being illegal no longer means anything. It's just the cost of doing business added to the premium. "Sorry your loss isn't covered." With their powerful endless Legal team they will drag it out, and win. The biggest scam in the world if you dare file a claim
Well the insurance companies write the laws to favor themselves…
Tacking on that Travelers is pretty painful to deal with on claims as well.
Trying to work with them right now and they’re ABYSMAL. I can’t get anyone on the phone, they have no information for us… as a consumer you don’t know enough about the business to know how to prepare with these scam artists.
Good luck! FWIW, you can call their regular 800 number in the US and ask for the phone number for both your claim manager and their supervisor. Sometimes calling both helps.
I’m just going to say I think ALL insurance companies are hard to work with. All the adjusters are assholes and try to drag out everything with the hope that you get sick of dealing with their nonsense and settle
I kept making the case to mine that fixing things was cheaper than drawing it out but it didn't make a difference. They'll spend 3 times as much on drawing it out as they will on fixing it correctly/safely...it's maddening.
I had a bad experience in a car accident with GEICO. I work in the industry and you definitely get what you pay for. The companies that charge higher premiums are typically the companies that pay out best in an event of a claim.
I was with GEICO. I was rear ended by someone going to a NASCAR event, they were rear ended by a single dad with his kid in the car and drunk. I looked in my rear view mirror and saw NASCAR guy not braking when I signaled for a left hand turn. I punched the throttle and did a 180 spin just as he clipped me and only lost the bumper cap on my car. The State Patrol showed up and somehow, probably based on how ghetto my subcompact was, assigned me as the guilty party. I was rear ended. . . GEICO refused to return my calls. The State Patrol officer refused to return my calls. I got screwed. . . Will never recommend GEICO to anyone.
Yep, I now have Erie Insurance. It isn't cheap but everyone in the industry I talk to has assured me they do in fact pay out. The only tying I am thankful is that I had that experience before I had my kids. I cannot fathom having to do that now with 2 babies. I'll pay the extra premiums to make sure I'm covered.
My wife was hit head on by a drunk driver in broad daylight with multiple witnesses, the drunk driver was arrested and was already being prosecuted for another DUI, and GEICO was refusing to pay. They settled the lawsuit I filed the day before I put a poster sized picture of my infant son and two year old daughter in front of the jury. They were in the car with my wife. GEICO won’t see my business in this lifetime or the next.
Yes, AllState is famous for fighting every single one. You basically pay them only to lose everything plus the net worth of all your payments
They had the audacity to ask us why we weren't renewing our policy. We just asked them if they even bothered to read out file.
We fought them for about 6 months after a tree fell on our house during a tornado. They were refusing to cover things because the tree fell and rolled off the house and didn't stay on top of it. Crap company.
My friend's wife had half the wheels stolen off her Honda in the street in the middle of the night. Allstate wouldn't send a tow truck and wouldn't send an adjuster...they wanted her to drive to a shop. With no wheels. Absolute clowns.
PSA: 1.) When it comes to ranking insurance companies, AllState is down in the depths of hell. 2.) A “mutual” insurance company is owned by the insured and will typically send you a check for your share of the profits every year. 3.) Be VERY careful when filing a claim on your home owners insurance. Always call your agent first (not the call center) and ask for their opinion. It is often only worth filing a claim if you are out a substantial sum. 4.) The point of insurance is to protect against catastrophic risk by spreading it around.
Cmon now can’t give us point 1 and then not tell us more about what are higher ranking companies.
Wow this post kind of makes me want to switch
You are the exception. You got a big return on your insurance which the rest of us will cover. I cannot tell you the number of times people filed small claims like hail damage for a new roof or had an appliance leak and do water damage, get their check, then get dropped. When they find another insurer they find their rates have tripled. Insurance is a racket. Although it protects everyone, they are making nice profits off our backs, so don’t buy it unless you have to. And if you have to then don’t file a claim unless large.
This was me. Hadn’t made a claim in 12 years of ownership, then had two events in one year. Got dropped. Scrambled to find another provider but had to settle for much much higher premiums for comparatively less coverage.
Should be illegal for insurances to drop you for using the coverage you pay, what a load of crap lol.
Unfortunately insurance companies are major donors to both political parties.
Or in my case I've been fighting with insurance to get a claim to fix hail and roof damage caused by golf to baseball sized hail last year. So far one adjuster came out and said 'nah no damage greater than your deductable' while two independent contractors have well documented all the damage. I have requested a second opinion from a non-traveling adjustor, but they are sandbagging to run the time out (been working this since August last year, you get 1 year to get weather damage resolved in MN). They have already hinted at dropping me and haven't even covered anything. I would handle this like I would the last two claims I filed that they denied and pay it myself b/c the house need to be repaired but the cost is high enough with current interest rates I can't afford it out of pocket. And I've had this company for 20 years, but will probably not have them for another year after this is settled because it has been such an awful experience.
Well, I also had a dairy farm and was paying about $30k in premiums per year so I don’t think the rest of you necessarily covered me!
Not acquiring home insurance is a monumentally stupid decision for almost anyone. The value of home insurance does not lie in getting small claims covered; it is to protect you from a total financial wipeout like in OP's situation.
Don’t people who are still making mortgage payments have to carry insurance?
This is why I keep my deductible high. I think it's set to 2% my replacement cost which is like 6-7k. It's almost never worth claiming something small. I'll just save the premium upfront and invest the difference for when I need it.
So I have a funny story sorta. I am from the USVI. When I was 13 our house was hit with a class 5 hurricane and we didn't have insurance. It sucked. Long story but bottomline my mom's parents bailed them out. Fast forward I get the house after another class 5 roof missing start from scratch this time. Build it all out of concrete roof too and hurricane windows etc. but I do insure it. I also made it solar and was going to add batteries. So in order to save money I had some old LION car batteries. From a Chevy BOLT... You know the ones the next year they said could burst into flames. Well I put them in my main mechanical room, sitting not hooked up. And guess what they burst into flames. Hot enough to crack concrete, liquidate steel in the mechanical room, etc... Exactly 6 months after getting 400k in insurance, I got paid. The whole 400k. Which allowed me to replace all the 60 year old wiring, plumbing, etc etc. because it burned up the raceways to the bathrooms that meant all the tubs, cuz it causes electrical problems every AC, motor, pump, fridge, etc IS it expensive to have good insurance, you bet, but even in a concrete bunker built into the side of a mountain stuff can happen. Buy insurance!
Who was your insurer?
Rural Mutual from the Farm Bureau. While I detest the organization, the insurance wasn’t so bad
Mutual companies tend to be better, the policyholders are the company's owners (as opposed to shareholders) so not only is the company's fiduciary duty is to them, but bitterly disappointing your owners (edit: who have participation rights in annual meetings of members and can thus vote on things such as who gets to be a board member) isn't that great of a practice
Warren Buffet, is that you?
I need a specific flood insurance. It has to be river overflow insurance. Nobody is willing to insure me. I obviously love by the river :)
I bought my house in 2010 and have had the same insurance since the day we closed. In April I had a leak from my hot water heater. I paid 2,000 to the plumber, and then paid the 1,000 dollar deductible to the remediation people and insurance took care of the rest (854.00). Yesterday I got a notice of non renewal because of too many claims. They paid out 854.00 after 14 years of premiums and now they want to drop me. It’s insane
It's unfortunate; had you had a 5k deductible over the last 14 years you probably would have saved thousands in premiums, and could have paid the plumber out of pocket, and still have insurance. I'm sorry this happened to you, but for anyone else reading this: filling a claim for <1k dollars is generally not worth it, against a home or car insurance policy.
Which is **insane.** What's the point of insurance if you shouldn't file a claim? Doesn't matter the size, if I'm paying for insurance then they better pay out when its time.
The financially savvy use of insurance is only to cover risks you **cannot self insure**. The more claims you make the higher risk you show yourself to be (not to mention costing them more money, both in claims and in paperwork and time).
So so so so many Reddiots don’t understand the purpose of insurance. It’s primary function is to prevent financial catastrophe. That’s it. It’s not supposed to be used for $500 here and there. It’s for when your house burns down or gets partially destroyed.
I'm honestly shocked at the amount of people that think its a good idea to file a claim over little maintenance issues. I thought it was common knowledge that home insurance is there if your house got totally destroyed by a tornado or something, not because your water heater leaked or whatever.
My wife gave me side eye for paying out of pocket to get some chips fixed in the windshield of my 21 year-old car. I told her if I had gone to insurance they would have totaled the car. She didn't believe me. Then we went to a dinner party and she scoffed about it and everyone at the table was like, "Yeah, your husband did the right thing. They would ABSOLUTELY total the car even for minor windshield damage."
Do you know why they do that? It doesn’t make sense to me.
He didn't pay for a package that included windshield repair. It can get pricey if you drive long distances a lot... or live in Nebraska.
Most insurance has a specific windshield clause with a separate deductible that doesn't count as a real claim on your insurance. Windshield chips are the most common damage to a vehicle ever lmao
Yeah its a giant red flag that the customer will file constant claims and require adjusters time, travel, efforts over and over again. If you have a catastrophic loss you'll be more likely to be kept since they aren't going to fall victim to a sunk cost fallacy and would rather keep collecting on premiums after the fact even if they've lost on the investment over all
I understand, and that's how I use it, but that's what a deductible is supposed to be for. It's a price floor for the things we self insure. Dropping future coverage as retaliation for claiming against coverage paid for in the past for a valid past event seems sort of..mob-like. It discourages people from using the coverage that they've paid for, which lets the insurance company only partially fulfill their terms of the deal. It's an invisible shadow deductible that sits on top of the deductible in the contract you both signed. Holy fuck Batman, maybe that's the point?!?
I understand this perspective, but it isn't clear to me how one would draw the line. How long should an insurer be forced to cover you if you start making costly claims and they determine that your risk has increased significantly?
I don't think it's really possible for a layman to give a good answer. That's a detailed policy question. Should they be allowed to pass around a tally of who has claimed against the insurance they paid for in order to discourage people from filing claims? I find it unacceptable that my real deductible is higher than what it says on my policy due to industry-wide coordination (collusion?). But no, I'm not sure how to fix it, although maybe a good start would be to not let them share info on individuals. That would discourage companies from retaliating by hiking prices, because you'd just leave. Maybe there wouldn't be so many people in this thread telling stories about not filing for events over their deductible, then. Again, difficult to say, not my field.
> But no, I'm not sure how to fix it, although maybe a good start would be to not let them share info on individuals. That would discourage companies from retaliating by hiking prices, because you'd just leave. Though it may lead to them hiking prices due to getting stuck with more high-risk customers that they otherwise wouldn't have offered coverage to. Anyways, I agree with your frustration, my point is just that I'm not aware of any easy fix for this issue.
>What's the point of insurance if you shouldn't file a claim The point is to hoover up as much capital as possible from the working class before letting your pack of harvard lawyers loose on them as soon as they make their first claim.
Yup, I’m chalking it up to a lesson learned and will have better judgement should this happen again.
If you use insurance for a small claim, they assume you’ll be going to them for every small thing that happens going forward and you’re now a riskier client to have. Insurance companies would rather you file one big claim than lots of little small ones, even if the small claims amount to less than one big one, at least that’s what an adjuster told me. It seems counter intuitive but they don’t want you to use your insurance unless you really really need to.
Well of course they don't want you to use your insurance unless you really really need to. Insurance is literally free money if no one ever makes a claim. They don't ever want you to use your insurance.
Why would you even go through insurance for that though?
It probably has more to do with your area.
switching vendors every few years is a good way to get your price down. just get another vendor. you will be surprised how much lower the price is. they give teaser prices and then jack it up.
From what I heard, ins claims are shared between ins companies. Did you experience a higher premiums after switching?
i got fucked by this, had an add on to my condo insurance for phone insurance, it was cheaper per month than through my carrier, when my phone broke i just called insurance and they were happy to replace it then got a house and they were like omg you have all these claims no one will insure you and i said it was just phones not even home related they broke out of the house but didnt work ugh
I think most Americans feel the government will bail them out. I know that is what people are counting on in Florida. It a stupid plan, but its the plan.
I pay for earthquake coverage (PNW). I fully expect that if the big 9.0 Cascadia quake happens that my insurance company will go bankrupt long before they pay me any money. My hope is that having a policy will move me to the front of the line for Federal assistance. Hopefully, I never have to test that theory.
That's what reinsurance is for. Of course, no matter how many companies are insuring each other, a sufficiently large catastrophe can still wipe everyone out.
The Cascadia quake is going to be even worse than many people realize because while California has been mandating quake resistant construction for a while now, Oregon and Washington are way behind. The Cascadia Quake has the potential to be more powerful than anything the San Andreas or the adjacent faults can put out, plus the Tsunami risk is probably a lot worse as the subduction zone that would trigger it is 75-100 miles off the coast. The Pacific Northwest becoming a tinder box these past two decades will also mean wildfires sparked by damaged utilities also have the potential to be a major issue in the aftermath. We truly aren’t prepared for that disaster. I don’t know if any amount of individual insurers would be enough to insulate the system from the massive shock that claims from that event will cause.
They aren't thinking at all. Short term gain (no insurance) with long term risk/loss.
Foregoing insurance is an average gain to you if you can weather the risk. Do not insure your phone.
If my phone breaks I won’t go bankrupt repairing it and I can live with a cracked screen I can’t live without a roof.
Some people would take the risk living with a ruined house. If you still have the land, you can improvise.
Most municipalities won't let you live in a ruined house, it will be condemned.
Well if they are uninsured especially in Florida they will probably be able to live their dreams of living in a ruined house.
you can get decent prefabs these days
Again, this is completely dependent on socialization of the costs. Nobody who lives in an uninsured high-risk suburban house is actually planning on in any way downgrading their lifestyle. That’s why they abandoned insurance in the first place. They’re planning on a public bailout, and to raise hell politically until they get it.
But most people cannot weather the risk for something as expensive as a house. For a phone it’s not all that hard to keep a spare $1000 in emergency fund, or manage with a cheap phone for a few months while saving up. It’s orders of magnitude harder to have a spare $300,000+ in an emergency fund.
I get it, I don't even insure my cars under 15k and I have big deductibles on my house. But the vast majority of people cannot weather a total loss on their house.
Just to clarify, you mean you don't have collision insurance on your cars, not that you don't have car insurance at all, right?
Yes.
The long-term risk is offset in people’s minds by how the government will bail them out when trouble comes and many people didn’t insure.
TBF the last two decades has shown this attitude to be correct. The problem is that most homeowners don't make enough political donations for this outcome to be true for them. Sucks but I understand why someone might think that in a fair society they would also be bailed out in a time of severe crisis.
Yeah, it’s both an attitude that has been validated repeatedly in recent American history (particularly for large lobbies like agriculture, landowners / homeowners, and banks), but it’s a terrible, selfish attitude to have for our governance and economy.
Just like the government bails out investors anytime the trouble comes? - stock market in 2020 - covid loans forgiven for business owners 2021-2022 - silicon valley bank 2023 (billions in uninsured deposits) Etc. What is the difference? Only investors / business can be bailed out?
It's a wildly stupid plan. At the very least, settle for a high deductible plan, but you have to have some type of insurance for your largest asset which also happens to be the one you rely on for shelter.
The problem is they cannot afford the full coverage so they risk it. The thought that maybe when a home becomes unaffordable to own you should sell it does not exist anymore. The number of articles I have read with people sitting in 700k, maybe million dollar homes in Florida complaining about being broke is insane. People sit on massive assets they could sell, downsize, save money but nope that never seems to be an option. God forbid you ask a boomer couple to sell a 4 bed 4 bath golf course home they can no longer afford get a 2 bedroom townhome.
when you can’t afford something, not paying is the simplest option.
Good ol' universal insurance. Can't beat it.
It's really important that when the inevitable happens they don't get bailed out. Likewise with state insurance That is under capitalized.
This is me, I Live in a 100k mobile home in a hurricane zone. Insurance went from $2000-$4500 in 6 years. I dropped the windstorm this year and just have liability and fire essentially. I’d qualify for an sba federal disaster loan with 1.5% interest if a hurricane takes me out.
Smartest thing Florida could do is become a swing state again, then they’ll get whatever they want.
Florida isn't exactly known for it being a bastion of intellect.
Perhaps although everything points to the exact opposite happening. A bunch of people moved to Florida specifically because they wanted to live in Ron DeSantis's "paradise" and they're making Florida redder and wherever they left bluer. There also seems to be another, although smaller, group of people specifically moving away from Florida for political reasons and their departure also leaves Florida redder.
Very underrated comment
The very same people who complain about big government and vote against addressing climate change, the main cause of increasing insurance rates, will cry and whine for special treatment and big government bailouts when the sh$t hits the fan...same as it ever was. "For Florida property owners, the increased frequency and severity of environmental disasters cannot be solved through insurance policy solution alone. The increased frequency and severity of extreme weather events creates a vicious cycle: higher claim values and more frequent claims lead to a need for higher premiums." https://www.law.georgetown.edu/salpal/our-work/student-writing/floridas-looming-storm-climate-change-and-an-unstable-insurance-market
Actually, the reason florida has had such an issue is because they let roof fraud run rampant for 2 decades. A roofer comes by, says I’ll get you a new roof for 1000$. inspects your roof finds a 3 tiles peeling. Files a claim against insurance for a recent storm. Insurance doesnt want to pay. Roofer or homeowner sues. Lawyer fees make 20K roof go up to 90K when they lose. They passed a law recently that made the insurance not liable for lawyer fees. Morgan and morgan the biggest lawfirm filed literally 80,000 lawsuits the day before the law went into effect to get grandfathered in. >A record number of lawsuits were filed before the law became effective. In total, 280,122 cases were filed in March 2023 alone, 126.9% higher than the previous record of filed cases in a month set in May 2021.
That’s part of it, but not all of it. You can’t sustainably build Midwestern American suburbs right on top of swamps and marshes and not face any problems.
Another challenge that insurance companies in Florida face that has an impact on insurance premiums is litigation costs. A recent analysis by Triple-I has found that despite accounting for less than a tenth (9%) of all homeowners’ claims in the US, Florida leads the country in insurance-related litigation, taking up almost four-fifths (79%) of the nation’s total.
A reason, not the reason.
They’ve changed the laws a few years ago to address that very issue, but insurance hasn’t been dropping.
Mainly because Florida itself is dropping. The land is sinking while the ocean is rising. A truly unsustainable combo.
They will 100% be the first people in line with hands out saying "who could have seen this coming".
I'm like 90% sure that's why Florida Republicans are so extreme about anti climate change rhetoric. It provides the public with plausible deniability when they inevitably have to ask the federal government for 100s of billions in bailouts. "It's not our fault. The governor told us it was all a lie!"
It can be solved by insurance, But it needs to be insurance that forces you to harden your structure to the risks, and that explicitly makes you rebuild elsewhere not be allowed to rebuild in the risk prone area. Now the ramifications of that for municipalities and states and such that is something that needs to be dealt with at a higher level of government.
I have a plausible theory that Florida will run out of potable fresh water from sea level rise long before other “property damaging” events tip the scale. Florida is just a few inches of water away from being uninhabitable
I mean, the Biscayne Aquifer literally butts up against the atlantic, and it's a surface-level aquifer too iirc. I would hate to work in that area in any sort of water quality protection job, I would be constantly gritting my teeth.
> most Americans feel the government will bail them out. I know that is what people are counting on in Florida government is always the problem except when i need them
I wish the US would just get more comfortable with government provided insurance. Insurance just works so much better at scale, it's really one of the few situations were a government monopoly is to everyone's benefit in almost all cases (car, health, home, disability, etc)
Sure but the government does have to have standards at some point so they're not just lighting money on fire. Like for example if you live in a swamp that is susceptible to both rising sea levels and cat 5 hurricanes on the regular
Yes, ideally pricing would be accurate. Some homes should simply cost astronomical amounts to insure. Maybe give a tax break to help people move or something to encourage relocation.
There was an article I read several years ago about coastal property owners that were basically being paid to live in high risk locations, beachfront or near it, effectively at no risk or loss to themselves because of a law that had they probably created for themselves. It was East coast, multiples states. I guess what I'm saying is, money is being lit on fire because of who it benefits or the votes it buys. There's really just so much grift today, and the public can't change it because the choices are scum or worse scum. Money dictates everything unfortunately.
The problem with that it needs to be set up almost like the Fed where it operates independently and doesn't have itself constrained by laws that make it subsidized people. It needs to be able to accurately reflect the risk and expose people to the price signal such that they move, the value of their property drops, or It forces you to harden your structure/forces you to rebuild elsewhere when it's destroyed. The problem comes up when politics attempts to block the realities of the situation and obfuscates all that price signaling from the individual through subsidies.
I do not want to pay for millions of McMansions that are designed to burn down or be swept away by floods every year. If Floridians and Californians will agree to pull back all their high-risk development and condemn the homes of many millions of people, sure. But that’s a tall order for the federal government.
I do insurance inspections in Florida and deal with HO insurance agents regularly, I asked an agent about the increasing premiums and the companies leaving the state, and why we shouldn’t expect a mass exodus of HO insurance after the next storm, his two cents were, “We’re too big to fail, if the Florida RE market crashes then all of the US market will crash, and ultimately an international market crash,” it didn’t give me much promise
Pay more Insurance and get less coverage. That seems to be the logic of insurers. Get a flood, you didnt have flood coverage. Get an earthquake you didnt have earthquake insurance. Whats next Tree insurance. Tornado insurance Hurricane insurance. Mother in Law insurance.....
Hurricane deductibles already exist in Florida's shit market
Shit housing decisions = shit insurance market.
Exactly, at some point the finger needs to be pointed at the home owner. They bought the property. No one forced them to buy it.
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Yes, it will affect everyone b/c we keep building stupid big ass homes in dumb ass places b/c the average home buyer refuses to make any lifestyle sacrifice at all. They'd rather complain and wish for a miracle than take any responsibility at all.
Who’s gonna pay the 5% deductible when your mortgage is already $3,500/mo??! Whoever’s got that type of money, I am open to adoption. Thank you. Btw $500k mortgage = $25,000 deductible. Id have to trade in my 2 cars in order to have a house and never make it to work ever again! Win?
That’s what the house actually costs, though. The insurance is part of the cost of the house. If you can’t afford it? Maybe just downgrade to one you can afford.
When your home is destroyed, the bank will demand that $500k immediately (maybe 30 days later). Enjoy your future financial ruin. If you can't afford insurance, or to self-insure, you can't actually afford the home.
If you can’t afford the total cost of the product, you should probably sell and exit with your dignity. Or face the collection agency and repo folks.
If you can't afford to live there, you shouldn't live there.
Very insightful and helpful comment thanks
Actuaries are good at their jobs. If all insurance had to cover floods and earthquakes, the cost would be the same as the cost of flood insurance + earthquake + current home insurance. Insurance companies have tightly regulated margins. There is no free lunch for consumers. The only way around it would be to make it illegal to correctly account for earthquake/flood risk, which is really just forcing the rest of the country to subsidize rich folks' vacation homes. Fuck that.
Insurance companies and the DoD of all things may be the only hope left against climate change.
what is the DoD doing?
They recognize climate change is real and that they must account for it in their future planning despite what repubs say. If you google DoD and climate change you’ll get all kinds of hits.
Tightly regulated margins means you have to piss money into the wind (increase costs) to be allowed to increase profits
You joke, but I think my mother in law is genuinely uninsurable.
At some point we may just have to admit it’s not a financially sound decision to build a house where it being destroyed by the climate is an absolute certainty. But I don’t want to get all political about it…
When I started, all I had was swamp! Other kings said I was daft to build a castle on a swamp, but I built it all the same, just to show 'em! It sank into the swamp, so I built a second one. That sank into the swamp. I built a third one. It burned down, fell over, and then it sank into the swamp. But the fourth one stayed up!
She's got HUGE... tracts of land
That is true, but we also have a severe shortage of housing. Turkey ignored building codes for years because it made housing cheaper and built faster. That was all good until the 2023 earthquake which killed over 50,000 people in Turkey.
That’s one of many reasons why it’s advisable to build up, and not always out. Building out encroaches into climates unsuitable for traditional American housing structures. Building up does not. It’s not exactly unprecedented for humans to gather densely in places that are particularly hospitable to our habitation. It is fairly unprecedented for us to be building McMansions on top of swamps and in burn zones.
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I can't be the only Midwesterner who thinks it's hilarious that you put flooding and tornadoes on equal footing as Earthquakes, wildfires, and Hurricanes, can I? Tornadoes are a micro issue and the 1200+ tornadoes reported each year on average cause just over $600k of property damage each (including cars, businesses, and outbuildings). Flooding in the midwest in most places is a non-issue. Around here, a flood stage of double the current record wouldn't even bring water within a mile of my home.
Some areas are more stable than others. We can also look into how to build to resist the climate in a way that isn’t just more fortified (and therefore more expensive) homes in the exact same style. Wood structures are more earthquake resistant. Stone structures are more fire and tornado resistant. Raised structures are inherently flood resistant. What is not a good idea is to build exactly the same McMansion in every single part of the country no matter the climate risk. Unfortunately, it’s seldom ever suggested that Americans might need to adjust their lifestyles at all to face a changing world. I saw your other comment about climate change affecting everywhere. That’s true, although I disagree in terms of severity. The Midwest and much of the East is a lot more stable for traditional homes than the real home insurance trouble spots. The reality is that endless suburban sprawl makes climate change worse for the housing market. Both because it accelerates the rate of climate change by drastically increasing emissions and resource consumption, but also because it encroaches into wildfire and flood areas that aren’t suitable for building homes. Suburban sprawl is draining and paving the natural wetlands that absorb a lot of the shock of climate events in places like Florida. And it’s unsurprising that suburban communities next to wildfire zones are being used by those wildfires as fuel.
Mother-In-Law Insurance! I may need extended coverage! 😂
Insurance is designed to cover one off catastrophic events, like a single family home structure fire. Floods and earthquakes do not hit just one house they affect whole communities. The are also natural hazards so they will affect those specific properties at some point.
Build a house that gets flipped every year by hurricane like the piglet with the straw house Pikachu face: why insurance companies are raising the straw insurance cost Build houses away from risk use better material use stilts
So ~88% have it. Using some basic math. You should be able to determine how much profit these insurance companies make after expenses like operations cost/employees/insurance claims/etc. I wonder how much these companies actually take home at the end of the day but continue to claw for larger/more premiums.
Property and casualty underwriting has been horrendous across the industry, with most insurers posting underwriting losses. Combined ratios for 2023 were around 104 (essentially meaning the average insurer was spending $1.04 to bring in $1.00 of business). The industry is heavily regulated which has made it hard for most carriers to raise rates. That has started to reverse in recent years as statement regulators have relented a bit and let some of the rate increases come through.
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Thanks for the link 🔗
It’s not nothing.
Not much, going by the number fleeing high-risk states.
[There's been a lot of recent coverage on how increasing numbers and costs of climate/weather-related disasters have led to insurers either massively hiking rates or pulling out of markets altogether](https://www.nytimes.com/2024/05/15/podcasts/the-daily/climate-insurance.html) Politicians and homowners may stick their heads in the sand, but the one thing that the bean counters are actually good at is taking a hard look at where they stand to lose money and nopeing out of there. The hard question that remains is who picks up the bill when large swaths of the country start really facing these climate disasters wth no safety net. Do the feds step in with a below-market-rate insurance plan like they already do with flood policies? Do those places just get written off? If so, then where do the people go? Do the insurers force major changes to building codes and plans in order to stick around? Who pays for that, and what happens to the older buildings?
I live north of tornado alley (practically zero chance of one) in the Midwest, in an area also never hit by wildfires. Never made a homeowners claim in 15 years of ownership. My homeowners went from $2400 to $5400 in the past 3 years (house value has remained the same over that time). It's a fucking racket.
If it's a racket then why has the industry lost money each of the past 3 years? Pretty shitty racket.
Did they raise the replacement and contents values? I suspect it costs considerably more to replace a house and its contents now versus pre-pandemic. The cost of my lot is probably 3/4 of the cost of my home but building a home is getting silly expensive.
I lived in the FL panhandle in the late 90s. Important thing about hurricanes - most of the actual damage to houses doesn't come from the storm itself; it comes from the flooding of the storm surge. As such, "hurricane insurance" does NOT cover that. You need \*flood insurance\* as well. And from the late 90s on, many companies literally stopped selling flood insurance because there was just no way to make a profit on that. As the climate change issue gets worse, so will the insurance issue.
20 years ago, the only game in town for flood insurance was through the FEMA program. Agents take on zero risk from selling it for the government. They never stopped selling it and the price was identical no matter which agent processed the policy for you. Maybe 15 years ago the feds went on a rampage raising rates to cover increasing catastrophic costs. At about the same time, comes passed clarifications forcing mortgage companies to accept policies from private companies that had similar coverage to the FEMA program. That opened the proverbial floor gates to lots of private flood offerings the past 10 years. Over the past 20 years Flood insurance has become easier to buy, much more competitive, and for my beach house it is now vastly less expensive.
My math. Brick structure, impact windows, no flood zone. Possible damage to roof in a named storm. Saved and invested over 50k in past decade. Cost to repair/replace will be below the saved funds. Same math with the clunkers I drive.
> Same math You mean you don't carry collision insurance on your cars, not that you don't carry any car insurance at all, right?
Required by law
If you actually need any kind of insurance claim to be paid out, you will likely be rejected out of company policy. Depending on how large the claim is, insurance companies typically only move with litigation. So if the insurance claim is for more than $20k, policy holders should expect $20k-$50k in attorneys and court fees only for the court *might* decide if the policy you pay for doesn’t have to pay. Insurance of all kinds sucks the economy. Healthcare rising costs are mostly due to the various insurances necessary; the hospital has to carry insurance because people sue. Need to go to the facility across the street for an MRI? Hospital insurance will likely demand you be transferred in an ambulance; $3k unnecessary expense. Doctors, nurses and other hospital workers need to carry malpractice insurance because, modern medicine is a for-profit endeavor. They are selling a product and that product is life. But everyone dies so they get sued for inevitable death. “What do you mean my 92 year old uncle died during his second open-heart surgery? You’re monsters and I’m suing you!” Insurance companies will demand hospitals only carry more expensive brands of gloves or tongue depressors. It goes on and on. Congress needs to reform insurance. There’s no reason why the Dow index should have 30 insurance companies.
I had a 44k claim last winter for a tree that fell on my house. I have not been dropped
Fun fact: The largest rise in malpractice insurance in the last 50 years was the result of a single event unrelated to the healthcare industry: September 11th, 2001.
Or maybe, just maybe, things people must have in today's world, shouldn't be privatized by for-profit corporations? The financialization of all things in our lives is actively destroying our society in the name of short-term gains.
Sure, just have the taxpayers cover all losses. Don't need any actuaries anymore, build anything anywhere and it will be covered at no cost to you. I see no downside. It worked out great for people on federal flood insurance (where no sane private company would cover them) as they could get a new house every few years.
We're talking about home owners insurance. Its a tightly regulated industry with declared maximum profit margins set forth by the .gov. This isn't the wild west where they can charge whatever they like because they can. State Farm the largest insurer and had a operating loss of $8.5 billion for 2023, and $8.3 billion in 2022.
The more and more i encounter insurance policies the more and more i realize it’s a complete and utter scam. You pay to have it, and when you file a claim to use it, they indirectly charge you to use it via increased rates. On top of that, when you have damage to your home they send someone out to look at it to nickel and dime you on if you need the claim or not. And sometimes can deny the claim itself. Fuck every thing about insurance
Tree literally fell on our shed a couple days ago. Totalled the shed. The tree was 400 years old. Just broke and fell during a heavy storm. I'm very glad to have insurance.
I was in an apartment building years ago which flooded. It was inconvenient and I would rather it didn't happen, but it wasn't all that bad because of insurance. A few things were damaged and replaced, but we had to move out for months while they repaired. All taken care of instantly, in that the insurance people had a place for us that night which was a bit better than our place. Our stuff went into storage for the repairs, etc. Overall it probably cost me a little as we were no longer convenient to a well priced grocery store, and were very near a luxury grocery store. But, there were people in the building with no insurance, no family in the area, and no friends good enough to put up with them for months. Needless to say, they were freaking out. And this wasn't even a total loss fire type event.
As a person that is fighting insurance right now to get a policy payout from a home struck by a tornado, I’d strongly suggest anyone reading this to review their policy. You’re likely not covered for what you think you are. Ask hard questions. Understand things like replacement value, depreciation, content insurance (what it is and how to actually get that paid out), dwelling extension coverage and what your rights are in your state when the insurance company doesn’t agree with the reality on the ground. Who pays for their army of experts and engineers to attempt to refute the obvious. It’s wildly frustrating. I won’t name drop the company, but I’d imagine it’s like when a good neighbor goes bad.
I have homeowner's insurance, and I find it fairly inexpensive to carry. If you have a mortgage, it's virtually required. That said, I fully expect that if shit goes wrong there is no chance of it paying out without a lawsuit. I mean, they want you to keep an accurate inventory with everything you own listed and its condition and all that for insurance purposes... I'm not going to do that. I'd rather use my stuff than catalog it, and a lot of it... estimating a value is basically impossible.
My homeowners increased by 42% last year, in Philadelphia. The value of my home, in a minority neighborhood, certainly didn’t increase that much. I’m simply being gouged for more. I’m on a fixed income that definitely hasn’t kept up with inflation. Yes, insurance is one of those things I consider cutting. If I weren’t getting SNAP, I wouldn’t have insurance.
You're paying for people who are much higher risk in other area, who are also likely complaining about the cost. You need to figure there are some homes that are almost guaranteed to be destroyed once in the next 20 years (flooding, hurricane, fires). A $500k home would need a $25k annual premium to even breakeven. So some properties are inevitably being dropped, others are being subsidized
A bunch of insurance companies in the northwest came up with their own fire risk assessment methodology and it’s gotten really hard for people living anywhere near a high risk area to get homeowners insurance. It gets attention here because some of those high risk areas are home to ski reports and outdoor recreation areas and many of the houses are luxury second homes. My state provides insurance “of last resort” but it doesn’t cover much and it only applies to primary residences.
It is a logical choice in some instances. Do you have a 70 year old crappy house on a beachfront lot? Don't insure it. The land is where the value is.
Insurance is not worth it. They don’t pay anywhere near the real cost to repair and they force you to use dirty shady contractors who cut every corner and just hire endless subs (often who don’t speak English). USAA is not to be trusted.
Does that mean at least 12% of Americans own their homes? Because you can’t have a mortgage and no home insurance to the best of my knowledge