Here’s the deal. We’re the proud (?) owners of a large McMansion. This is a custom home inside and out, in a neighborhood of similar well kept houses. Since we live in the Bermuda Triangle of real estate (Midwestern USA) the prices have not appreciated a whole lot since we built it 15 years ago. Probably would sell for $100/sq ft. Insurance used to be $1k/year back then, it climbed to $2k by 2011 or so and now we’re looking at $3k a year. With no claims. The house is an insurance agent’s dream, all brick exterior, monitored alarm, a half mile from a fire station, every discount in the book. Not enough.
The catch is as follows. replacement cost is quoted by the insurance underwriters as $155/sq ft. Never mind I see houses like mine, brand new, selling for no more than $110/sq ft. The premium seems to go up by $250-300 a year (more than 10%) and the excuse is that every year there’s a storm that caused damage, blah, blah.
I tried getting online quotes and I’m beginning to believe that nobody wants to insure such houses. This chimes with what my insurance agent says, that we have the best deal. We do have auto thru them and get lots of discounts, and the auto rates are pretty good actually.
I’m starting to look for better rates but the sheer size and cost of the house (not too large and not too expensive but still…).
We are in the same situation. Our insurance company, Chubb, charges us for 150% of our house’s value and says they have to do that because that’s what the replacement cost of the house would be, to build it the same way it is now. I tell them that I only want to insure for the house’s true value and I wouldn’t rebuild it the same way - or I would pay the difference out of pocket but they don’t care.
My house is almost 150 years old and has weathered many storms and stood the test of time. They don’t care. Their MO is to assume the worst, double it, and charge accordingly. We pay more than $9000/year. We are looking around for alternatives right now because we are refinancing but there aren’t any. At least Chubb has a reputation for paying claims (we’ve never had a claim though).
Insurance is a racket and homeowner’s insurance is the worst.
We also have Chubb and I feel like we pay a lot. That said, we had a claim about two years ago that many other insurers wouldn’t have paid – there was a leak around a window on one side of the house and, as these things go, the entire side of the house had rotten wood underneath the siding. Only discovered the problem because of squishy dry wall under one window. Chubb paid three separate claims – as the contractor continued work, one thing led to another – totally $25,000. Both contractor and we were flabbergasted that they paid, because if truth be told, this was probably from simple “wear and tear,” not some “event.” Regardless, we were extremely happy they paid and feel like maybe our overpaying all these years was worth it.
We have Chubb, and I agree they’re expensive, but I also agree they pay for claims. We had a huge tree limb fall on our roof one Christmas Eve. Within the hour - and did I mention this was Christmas Eve about 8pm? - a troop of guys arrived and tarped the roof. All it cost was a plate of Christmas cookies. Homeowners insurance pays to “replace with like kind and quality”. The roof was about 20 yrs old so they couldn’t find tile that matched the uninjured part of the roof, so they ended up replacing the entire roof, at no cost to us!
When you’re evaluating costs, remember the homeowners covers liability and also all your furniture and most other personal belongings.
When we switched,mew looked at tons of policies. Our old Kemper policy insured for replacement value. We couldn’t find any other company that did so.
Anyway…our house isn’t as big as yours it seems…but our SafeCo plan is about $1500 a year. Insures for 1 1/2 value of our house. If this house burns down, we would build a smaller one anyway!
Are you sure about the replacement value, @thumper1 ? In most states, according to our broker, it’s legally required that a homeowners policy provide replacement coverage for a primary dwelling.
Does anyone have military connection such as a spouse, parent ( not sure about grandparent) ? We have USAA for our home, cars and travel trailer. We had Allstate before and it is by far the most reasonably priced and customer service oriented company we’ve worked with.
I’m confused about insuring your house for 1.5 times its value unless that includes furnishings. My insurance company doesn’t do that. They told me that a substantial portion of the house value is in the land (obvious.) Also if your house is destroyed by fire or tornado the foundation is still in place and usable.
I have USAA for auto and umbrella policy and we used to have them for homeowner’s too until we moved. They don’t usually write policies for our new zip code but they did for me. It was higher than Chubb and didn’t cover as much. H called with a question about our neighbor’s tree falling on our fence (at our old address) and they counted it as a claim.
We recently got our Chubb renewal. It only covers $1000 for tree removal (per tree) but will cover up to $100,000 for expenses incurred by kidnapping, including ransom payments and the hiring of a professional negotiator! Please, just remove the trees!
My deductible is $10,000, unless it’s a “wind and hail” deductible which is $26,000 and is not waived if the loss is more than $50,000. The wind and hail deductible goes into effect if there is a hurricane watch or warning for any part of the state and doesn’t end until 24 hours after the watch or warning is ended. So, a storm could be considerably downgraded and we would still have to pay.
I live in a home that is hardly a McMansion … a bit less than 2000 sq ft. I am in a subdivision that used to be a lot more desirable than it is today, with well & septic. I have replacement cost insurance (about 1.5 times market value) w/a $1,000 deductible. I just paid $1,231 for the year. I am also in the midwest, and I am insured with Citizens/Hanover. The home insurance is a drop in the bucket compared to MI auto insurance rates!
Be glad you don’t live in south Florida. We pay over $7200 a year for homeowner’s (USAA) and windstorm protection (Citizen’s). Our windstorm deductible is almost $29K and our homeowner’s deductible is $2K. USAA tried to hike our house valuation into the stratosphere some years ago but they allowed us to submit a replacement cost estimate (by a licensed appraiser, at our own expense) that justified lowering the valuation. Over the years, it has crept back up to a crazy high figure. Insurance costs are the main reason we are planning to sell and move to north Florida where insurance is cheaper.
This thread is making me think I might be underinsured, because I pay about $1200 per year for home and auto, for a house whose tax assessment has more than doubled in value since we purchased it in 1989. I guess I should look at the policy.
I consider home insurance really important - I know someone whose home burned, and only after that happened did they realize that their insurance was less than adequate.
I have USAA and my homeowner’s insurance premiums over the past decade, with no claims, have increased over 400%. I pay over 6K a year and have reduced my coverage and increased my deductible to help control costs. I plan on selling my house in the near future and am considering shopping for a new insurance company to cover my new house.
Increasing your deductible is a good way to reduce the premium - rather than having a $500 or $1000 deductible - increase it to 1% of the home value. It’s not smart to file relatively small claims anyway, so no drawback to a high deductible.
This is exactly what we just did. Our insurance dropped from over $8K a year (with a $30K deductible and no claims through 2-3 major hurricanes and 15 years) to about $800/per year. Yes, our new homeowner’s insurance costs 1/10 of what it did.
We own this next home out-right (downsized) with no loan, but we still carry liability insurance. We are self-insuring to a certain extent because (once again), our lot is more valuable than our home (it’s old) and we can afford to replace the contents.
Few things drove me more crazy in SoFlo than homeowner’s insurance. The ground our house sat on was way more valuable than our house, but because we had a loan we had to carry all the regular insurance.
IMHO, insurance companies do this stuff because they can. I’m sure some companies are good but we did not like the options in SoFlo. It’s probably regional to a certain extent. When they’ve got you they’ve got you.
Our bill is under 3k (officially 2200 sf) and I went in circles with the insurer over that. Deductible probably 1k. State law allows a different treatment here for homes built before some date. Ours is about 110 years. And yes, they had the idiocy to suggest that, if something happened, I would want to replace the horsehair plaster and whatever the nails in the walls and floor are. Last time I did the hoops, a number of insurers won’t touch older properties.
I’ll find out in the next 4 weeks what my annual increase is.
Ours is State Farm , pay $2400 a year for $2000 deductible. Replace about 150%. Also have car and umbrella insurance not in that price. Sq ft 2800. Have lowest on contents you can. In mountain area. No claims 15 years since built home.
@rockymtnhigh - my coverage excludes damage by animals “including bats and mollusks”, lol. How about yours? D3’s boyfriend’s parents live in CO and have had brown bears invade their house. Not sure if they made a claim…
