Homeowner's insurance - 60% increase for less coverage

[Brian Elfert]

I just got my renewal package for my homeowner's insurance. A 60% increase! If it keeps going up at this rate in a few more years I'll be looking at foreclosure on my house as I won't be able to pay both the mortgage and the insurance. On top of the huge increase I also get less coverage. I now have a $5,000 wind/hail deductible.

[Ron Citerone]

Seems to be a sign of the times. That is a huge increase. I would shop it around if you have options there.

[Brian Elfert]

My roof is 20 years old this year so everyone I have talked to has said it is going to be hard to find another insurer. Roof replacement is planned for spring 2024 and that will open up more options once that is done.

The agent I work with has had two insurers they work with pull out of the personal lines business entirely due to losses in that market. There have been multiple billion dollar plus weather events in Minnesota in the last two years. My co-worker thinks his claim from storm damage might be upwards of $250,000. That seems expensive to me. I could probably have new Andersen windows (I have Andersen now), new doors, new siding with fascia/soffit, and a new roof for $50,000 to $60,000.

[Brian Runau]

My wife and I have Erie. Home and auto. There have been increases, but not severe. Good to deal with. No homeowners claims, but accidents. One my fault and rear-ended twice over the years and they didn't jack up my rates. Brian

[Brian Elfert]

The increase is actually 65%. Unfortunately, Erie does not cover Minnesota. I can't really look for new insurance until my roof is replaced. I really like a couple of things about my insurer. 1) They offer full comp/collision insurance on borrowed or rented trailers. It might even be zero deductible. 2) The home coverage is not strictly split between contents and the home itself.

[Pat Germain]

This is a growing problem. My Farmers premiums went up around 100% earlier this year. I switched to Nationwide which kept the premiums about the same, but Nationwide is cancelling policies all over Colorado. Likely Nationwide will cancel my policy or significantly raise the premiums.

Underwriters are taking huge losses all over the country from fires, floods, hail, tornadoes and hurricanes. Underwriters don't like to lose money, so they are pulling out of high risk areas and jacking up premiums everywhere.

You might be able to save some money by contacting an insurance broker who can shop multiple companies for you based on your actual insurance needs. Forget company loyalty. What other people are paying is irrellevent. Your particular property, your zip code, your credit rating and many other factors determine your premiums. We're going to have to keep switching companies whether we like it or not. Eventually, we may not have any options for homeowners insurance. Florida now offers state homeowners insurance because no companies will insure so many parts of the state.

Many years ago I was in the Navy and stationed in Washington DC. I could not get car insurance from ANY company. I called and called and called. They all said, "Due to the extreme risks of the Washington DC area, we are not offering policies there." I notified my chain of command and they were just dumbfounded. They said, "Call USAA". They didn't insure enlisted troups back then. They said, "Call GEICO". I did. They wouldn't insure anyone in DC. I was forced to drive with no auto insurance because nobody would insure me. This scenario is now spreading to other parts of the country.

[Brian Elfert]

My insurance agent has multiple companies they work with, and they are adding more. It is very hard for me to switch insurance companies right now. My agent says most insurance companies will not write a new policy for a house with a 20 year old roof. I plan to have the roof replaced in 2024.

[Jim Becker]

For those of us required by our mortgage holders to escrow our homeowner's insurance premiums, it's really a "not fun" thing because it means paying up front for the new coverage (before getting a refund of the current coverage) while still paying for premiums monthly with the mortgage payment and tax escrow. It's also more difficult when Homeowners, Auto and Umbrella are bundled. Unfortunately, many folks will be forced to make the change a lot more frequently than in the past due to where the industry is heading.

[Brian Elfert]

I chose not to have escrow and I just pay my own insurance and property taxes. There was a small fee not to have escrow, but worth it to me. I hate the whole reserve thing they require with escrow. Insurance and property taxes almost always go up every year, so every year they would not only collect more for taxes and insurance, but also collect more for the reserve.

My insurance allows monthly payments so I just do that.

[Patty Hann]

I chose not to have escrow and I just pay my own insurance and property taxes. There was a small fee not to have escrow, but worth it to me. I hate the whole reserve thing they require with escrow. Insurance and property taxes almost always go up every year, so every year they would not only collect more for taxes and insurance, but also collect more for the reserve.

My insurance allows monthly payments so I just do that.
Yep, that escrow account ties up a lot of money.
Years ago the escrow account (with Wells Fargo) had 3 months reserve for ins/tax payments in it. The it went to 6 months reserve, then it went to a year's worth reserve.
About 10 years before I paid off the mortgage I closed it and shifted to paying it annually myself; one payment in July paid the insurance, and one payment in October paid the property tax.
You know you are going to have to pay it, so you just put aside the required amounts (divided by 12) in a separate account.
And what would have been tied up as the reserve amount was invested elsewhere.

[Jim Becker]

Yes, the reserve is not fun...I have to send in a few more shekels "as we speak" (and before 1 January) because my new shop building raised the property taxes in the past year. OTOH, paying mortgage monthly makes the insurance cost higher which then reflects a chunk of the reserve equivalent if escrowed. Depending on the carrier, it can be a meaningful percentage of the base premium to pay on monthly intervals. One has to pick their poison if they have a choice. My current mortgage requires the escrow.

[Patty Hann]

Yes, the reserve is not fun...I have to send in a few more shekels "as we speak" (and before 1 January) because my new shop building raised the property taxes in the past year. OTOH, paying mortgage monthly makes the insurance cost higher which then reflects a chunk of the reserve equivalent if escrowed. Depending on the carrier, it can be a meaningful percentage of the base premium to pay on monthly intervals. One has to pick their poison if they have a choice. My current mortgage requires the escrow.
Yes some do. I read that that most house purchases with less than 20% down not only require mortgage insurance, they require escrow accounts for insurance and prop.tax payments.

[Zachary Hoyt]

I went with a local agent up here near the house I bought, and they did a fine job. First I only had fire insurance because the building was kind of derelict, and then when I got the work done and moved in they switched to homeowners and a BOP. They also were very helpful when I bought that bus and had to try to insure it. I wasn't getting anywhere myself because it was an odd vehicle, but they had the knowledge and connections to get a quite affordable policy. I've never had to make a claim so I don't know how good it really is, but on paper I have good coverage for the house, the business, and the car, all through the local agency, and all quite reasonable. House and car are under $1k each for the year and BOP is just under $500.

[Jim Becker]

Yes some do. I read that that most house purchases with less than 20% down not only require mortgage insurance, they require escrow accounts for insurance and prop.tax payments.
Our down payment was well in excess of 20%. But the escrow was still required and non-negotiable. But at 3.125%, I'm not about to complain nor look to replace it.

[Brian Elfert]

I think I pay $1 per month to pay my insurance over twelve months. $12 per year is a small price compared to the $300+ per month my homeowner's and auto insurance costs.

I have quite a bit of money transferred from my checking account to my savings account every payday. Some of that money is for property taxes, some for an emergency fund, and some for home expenses like new appliances, new HVAC, new roof, and so on.