<p>This was not a huge shock, just a mild one that I found interesting.</p>
<p>I thought my homeowner insurance renewal looked very high so I thought I would do a little insurance shopping and went to the internet. Started with Geico, and began with automobile, filling out the online application form. I input my name and address only, and on the next page popped up my 2 vehicles, year/make/model and vin… ok, that’s convenient! Towards the end of the application my (and wife’s) drivers license numbers were already in the form. How convenient I don’t have to pull my license out of my wallet. No other shockers there, we have no accidents, no tickets, kids no longer living at home, I had to adjust coverage to match our existing and the quote was lower than what we are paying now but not enough to make me switch today.</p>
<p>Then I went to the homeowners insurance application page, input my name and address and my estimated home value popped up - lower than recent tax assessment, maybe they use Zillow, and my home square footage was also filled in on their form. Lots of questions to answer - they did not already know the breed of our dog - but they did know we had a claim in 2009 and the amount of the claim (It was a new roof, $10k, wind damage). Very convenient because I couldn’t remember the amount of the claim. Their quote for h/o insurance was really high (!!) but the $ amount on the dwelling also looks very high so I will have to call them to find out if there is a mistake somewhere.</p>
<p>We know all this info is “out there.” I was just a little surprised to find it so readily available, but I guess I shouldn’t be.</p>
<p>You can blame the CLUE (comprehensive life underwriting exchange) database. The big brother of the insurance world. All you need to do is make an inquiry about property damage and the info will be sent to CLUE.</p>
<p>Yes!!! Years ago a neighbor mentioned that she had hail damage and had filed a claim. I thought I would be proactive and call MY insurance company. I told them I thought I might possibly have hail damage too and asked how to proceed. They told me that I would have to pay someone to come and survey the damage and IF they said there was significant damage the insurance company would pay. </p>
<p>I never even followed through. Many years later when we moved and need a new policy as I called around I was told that since I’d “called about hail” I couldn’t qualify for the lowest rate!!! I was furious. Lesson learned. If you have to call for a question refuse to give your name!!!</p>
<p>You know, I really HATE insurance. It just seems like there’s no winning with these people. You pay through the nose to have that safety net. And then if, God forbid, you ever actually avail yourself of the protection you’re paying for – or apparently, even ASK about availing yourself of the protection you’re paying for – you will be punished forevermore.</p>
<p>Wow. Last year I called about a couple things, also never followed through on (one thing was considered wear and tear, the other was gutter damage from the derecho that didn’t meet the threshold of our deductible). I am already worried about the next insurance bill–I have a feeling that everyone in NJ, whether or not they made a claim, is going to get socked.</p>
<p>Well, we (in NJ) seemed to have lucked out.
We even put in a claim after Sandy for our fence that was obliterated. First claim in 20+ years. Our renewal just received is not out of line.</p>
<p>Good to know, musicmom! I’m hoping that will be true. I do worry that they’ll up the bill on our house in CM county, even though it’s not in a flood zone or near the ocean side. But I guess I’ll find out when the bill’s due.</p>
<p>garland, hope you’re pleasantly surprised like we were.</p>
<p>We are planning a week’s vacation down in Cape May in September. Friends of friends have a small house in North Cape May that they have offered us. Looking forward to some after Labor Day quiet, ride on the ferry to Lewes, shopping, biking and walking.</p>
<p>Hey, your friends might be my neighbors! (small houses in NCM are extraordinarily cheap right now–much more so than when we bought :/). You should take a look around while you’re here! :)</p>
<p>Oh, and September is the best month to be here. The water’s warm and the crowds are gone!</p>
<p>You guessed my ulterior motive to this vacation, though I have to keep it concealed from DH. We’re not able/ready to retire yet but I am a planner and think that relocating to a smaller home in less expensive (nothing in NJ is cheap!) south jersey might work for us.
DH loves where we are and is not embracing the idea…</p>
<p>If you need any good arguments or testimony–I’d be glad to offer them! I’d love to have you as a neighbor! (we started in the same town, so why not?)</p>
<p>I have a friend who made a hail damage claim on his car insurance and not only did his car insurance go up, but his home owner’s did also. That just doesn’t make sense to me. </p>
<p>I went around and around with my home owner’s insurance company last year. They kept raising the “replacement cost” by significant amounts every year. I fought it and they did some magical recalculations and brought it down quite a bit. Do they really think anybody would have them spend $245K to rebuild a house that would only sell for $90K to begin with? Darn, that reminds me, I meant to get some new home owner’s estimates before the renewal this year and I forgot. The renewal is due to be billed within a few days and it’s paid through my escrow account on my mortgage. It is probably too late to make a change. Ugh.</p>
<p>Well, the concept of “replacement cost” is an interesting one. On the one hand, if your house cost $90K to purchase, one might think that the replacement cost is, say, $50K – the remaining $40K is land value, which doesn’t change even if the house is completely destroyed by fire, flood, tornado, etc. On the other hand, if the worst were to happen and you were to rebuild, you wouldn’t replace things with 30- or 40-year-old things. You’d buy a new furnace, new foundation, new roof, new kitchen, new everything. So replacement cost might indeed be more than the house was purchased for.</p>
<p>We moved six months ago and our replacement cost in the new house was also deemed to be higher than we paid for the house. I didn’t realize that could be a bad thing, but I can see how we’re paying more in premiums because of it.</p>
<p>Any insurance people out there have a point of view on which logic makes the most sense? Or on why the insurance companies deem replacement cost to be higher than the purchase price of the entire property, including land?</p>
<p>Well, I can understand that the replacement cost can be higher than the original cost, but barnardmom’s point was that the “replacement cost” was deemed far, far, higher than the possible selling price, which is a different thing.</p>
<p>Nothing to do with insurance, but I had the same experience this past week of being shocked at the information that was out there. I was registering for online access to a small retirement account that H has, for both of us, and I was sent to a third party identity verification company. I was asked a number of multiple-choice questions. For example, which of the following 6 addresses have you lived at, which of the following cars have you owned. The addresses were almost 20 years ago, the cars even longer. </p>
<p>I have also noticed that when looking up addresses on switchboard or whowhere, relatives’ names come up as well. I checked myself just to see what they had, and they had quite a few relatives, some with different names. </p>
<p>By the way, we have the most wonderful insurance company (cars, house, umbrella). We’ve been with them for almost 30 years, and have had two claims in that time. The first was years ago, when it made sense for us to make an expensive change in the house (that was clearly not covered) rather than risk a repeat of the same flooding that had just occurred (that was covered). I told the agent not to bother coming out to see it, because it was not covered. He said he wanted to come anyway. He came and said that they would cover this (thousands of $$) because they agreed that it made sense and could prevent other claims in the future. More recently, we had significant hurricane damage. They not only paid the claim without problems, they worked to maximize the amount they would pay us. I knew what was covered and didn’t expect more; the check was higher than expected. I called, and the agent said that they’d interpreted the policy in a way to maximize the payment. And they are incredibly nice and supportive when these things happen.</p>
<p>Considering I could get a brand new house on a bigger lot, with a garage (don’t have one now) for half the price of the “replacement cost” of this house, it really wouldn’t make sense to rebuild this one, would it? I could pay off this mortgage, buy a brand new build free and clear and they could sell this land for $40K if they were going to spend that much. The land sale would cover their costs of demolishing the existing house, I would think. They would even save on temporary housing while the house was being rebuilt because I would just move into the new house instead. It just isn’t financially logical.</p>
<p>I work in insurance and we use the CLUE report with one of our carriers who requires it. We only look at losses that are within the last 3 years, but if you submit a claim and nothing is paid out it still counts as a claim, and if you call to ask a question your agent may label it as a claim. With one of my carriers, claims at different addresses count, too-- say you have a nasty tenant in a rental property. It doesn’t seem fair to double dip, when you get surcharged on both your home and your auto policy for example, but people who have claims are more likely to have more claims than people who never have claims… it wouldn’t be smart for us to just pretend that isn’t true.</p>
<p>We bend over backwards for our insureds as much as we can, some of the things we let slide sometimes because insureds will complain is really shocking. But, it’s also a crappy business sometimes. We have to make a profit or we can’t be there when you need us. Replacement cost can vary greatly depending on the calculator the agent or inspector uses, which is why they sometimes change when people complain. We can sometimes get you a cheaper number if you make noise, but that doesn’t mean in our expert opinion that number is the correct number. Right now, replacement cost IS always going to be higher than market value just about everywhere. The market has bottomed out, what do you expect? And your land jacks up your market value in a way that isn’t a factor in replacement cost because nobody is going to replace your land. Sometimes with houses on a lot of land we have insureds who are very upset because our replacement cost is a lot less than what they paid, they are the exception to the rule, and they think they are getting screwed-- but they’re not. My company does not offer you the option to pack up and move elsewhere so nobody feels compelled to burn their house down because they want to move and can’t afford it, so we will rebuild your house the way it is now. If you read the policy, there are usually things built into the policy to make up for inflation or if your house is very old and you would not be able to replace with the same items.</p>
<p>The one thing I wish I could tell people when I see their CLUE report is DON’T file a claim for something you can afford to do yourself just because your insurance covers it. You will pay more for your insurance, and you only get so many claims before you get bumped to the kind of high risk insurance I sell-- and THAT sucks. I see so many people filing $200 claims because their camera broke or something stupid and all I can think is BOY does that family need a better agent. Insurance should be for emergencies, not convenience.</p>
<p>I understand that, although I really don’t like a system where we can be heavily penalized just for using a service we’ve been paying for, sometimes for decades. </p>
<p>But what makes NO sense is counting a simple inquiry as a “claim.” And in fact, in rooting around the website linked above, it seems that this practice has been outlawed in some states.</p>
<p>garland, thanks, testimony of someone who actually lives in CM area might help my DH…
still a bit down the road for us.<br>
Yeah, wouldn’t that be a wacky full circle if we ended up in the same town again? :)</p>