Homeowners insurance advice

[gregk24]

We purchased our first home almost 4 years ago and have been with the same homeowners insurance company (also have auto with them) since the beginning. My family has also been with this company for generations. Well, each year our homeowners policy has increased. Last year it increased by nearly $500, and this year it increased nearly $250. We have never filed a claim, and even had a new roof put on back in 2018. Long story short, I don't like these increases especially when our family has been with the company for so long with ZERO claim history.

We are looking at options and State Farm comes in $200 less per year, not a lot but it's "something". Other companies can beat this but they are what I would call "no name" companies which concerns me if we ever have to file a claim.

Kin has a good rate, but they are new to the insurance market. Any advice? Should we stay with our existing company (Farm Bureau) and hope the rate goes down down the road? Or drop them and go with State Farm or other for less money? I don't want to cut ties with a longstanding relationship if that will come back to bite us in the rear.

Thanks for any advice!

 

[Leo99]

Your insurance company wouldn't be increasing your rates if they were concerned about your longstanding relationship. To me Farm Bureau is a no-name company.

 

[jhs914]

Your insurance company wouldn't be increasing your rates if they were concerned about your longstanding relationship. To me Farm Bureau is a no-name company.

Maybe not in N.J., but in Florida and the the deep South, Farm Bureau is a major player.

To the O.P., I am a Florida resident also and used State Farm exclusively for homeowners and auto insurance from the time I graduated college until I was in my 50's. When I moved to a waterfront house they refused to insure me so I dropped all insurance with them. I visited Homestead after Hurricane Andrew and remember all of the houses had spray painted the name of their insurance company on the front of the house so the adjusters would know where to stop. About half the houses had State Farm painted on them. Because State Farm had so many insured they suffered massive losses and started cutting back on policies in the state.My wife was rear ended by a State Farm covered driver and I had to fight tooth and nail to get them to cover the proper repairs to my wife's Acura. So the bottom line is that my opinion of State Farm is not very high.

If you go with another company do a little research to determine their rating by places like A.M. Best before you decide.

 

[Lubener]

I have learned not to be loyal to your insurance company. If you find cheaper premiums for the same coverage, it's time for a change if the new insurer has good reviews and ratings.. It seems everyone's rates will be going up due to the big increase in building materials which will affect "replacement" cost for repairs or replacement of your home for damage.

 

[Spartanfool]

We purchased our first home almost 4 years ago and have been with the same homeowners insurance company (also have auto with them) since the beginning. My family has also been with this company for generations. Well, each year our homeowners policy has increased. Last year it increased by nearly $500, and this year it increased nearly $250. We have never filed a claim, and even had a new roof put on back in 2018. Long story short, I don't like these increases especially when our family has been with the company for so long with ZERO claim history.

We are looking at options and State Farm comes in $200 less per year, not a lot but it's "something". Other companies can beat this but they are what I would call "no name" companies which concerns me if we ever have to file a claim.

Kin has a good rate, but they are new to the insurance market. Any advice? Should we stay with our existing company (Farm Bureau) and hope the rate goes down down the road? Or drop them and go with State Farm or other for less money? I don't want to cut ties with a longstanding relationship if that will come back to bite us in the rear.

Thanks for any advice!

If you're over 50, get The Hartford thru AARP. I priced them out two years ago and no one could touch their prices, not even USAA.

 

[Lubener]

If you're over 50, get The Hartford thru AARP. I priced them out two years ago and no one could touch their prices, not even USAA.

I assume you would have to be an AARP member to get any deal?

 

[Gimpy1]

Shop around. Rates go up because the insurance company's total risk portflio increases, and the loss ratio increases. Take advantage of all the discounts they offer, State Farm, Farm Bureau, etc all have different risk portfolio's and will have different rates for each risk they insure. Compare at least 10 companies not 2 or 3 and check your states department of insurance for complaints and financial strength, it takes a little research but you will find a better rate.

 

[paulri]

When looking to change insurance in CA, I have always gone to the board of insurance (or whatever its called), and looked at the number of justified complaints per 100,000 policies that they list for each company, grouped under different types of insurance (car, home, life, etc.). Companies with a high rate of justified complaints I shy away from. Your state might have something similar.

I would try at least one company that either doesn't have branches (like Mercury) or is online, to see if you can tap into some of the cost savings there. AAA also offers car insurance, and home also, although I don't know if it is in every state.

I agree with the above, a company that is raising your rates like that w/o claims isn't interested in your loyalty. I'd look elsewhere. Also, when you price policies out, I'd look at moving everything (bundling home & car)--different companies offer you different rates for bundling.

 

[The Critic]

Without percentages, the figures you provided are not very helpful.

Getting alternate quotes is always a good idea since the product is very commoditized, however, some carriers do deliver better value than others when it comes to coverage enhancements and claims service. Keep in mind that many pricing decisions are made at a portfolio level, followed by an individual level. If a company's portfolio is performing poorly on a specific class, you can expect to see a rate increase.

Also, beware of this:

Florida's Property Insurance Market Is 'Spiraling Towards Collapse' Due to Litigation: Report

Florida's property insurance market is "spiraling towards collapse" and requires immediate attention if there is any chance of protecting the market,

www.insurancejournal.com

 

[ctechbob]

Florida has always been a bit of a mess for homeowners/property insurance. I wouldn't be too surprised if it ends up in a situation much like flood insurance, where the fed or the state has to step in in a big way to support the system. You can't expect a private company to write insurance in a location where they know there's going to be massive losses over time and that litigation issue just stacks on top of that.

 

[tbm5690]

Just switched mine over this year to save a few hundred...same story, rates going up yearly. I've also been unable to have anyone beat prices on a bundle...I've never had home and auto together as it's been cheaper to keep them split so get quotes both ways on that too.

 

[paulri]

Funny, I called around a few months ago as we were getting liability for the Camry in my sig and adding my 16yo daughter to our policy. Everyone was cheaper when I bundled home & car. Oh well YMMV.

Just switched mine over this year to save a few hundred...same story, rates going up yearly. I've also been unable to have anyone beat prices on a bundle...I've never had home and auto together as it's been cheaper to keep them split so get quotes both ways on that too.

 

[PandaBear]

Go with a broker online, the one that gets businesses over the phone and have the best rate. So far I have seen the same policy for my quad plex going from $1300 to $3000 and you can guess which one is from your local agent and which one is the one remote from an office in the middle of nowhere in your state. Farmer raised suddenly from $1500 to $3000 in one year and the same Mercury insurance at different broker (SoCal rural office broker vs inside San Francisco broker) can vary from $1300 to $2300 as well.

When you need to file a claim it is always the local claim adjuster who came out anyways.

 

[paulri]

When we went with mercury (broker), I found that we could get car & home for what farmer's (local agent) only gave us car insurance for, with an extra hundred or two dollars per year, to spare. You pay a lot for that local office & the employees.

Go with a broker online, the one that gets businesses over the phone and have the best rate. So far I have seen the same policy for my quad plex going from $1300 to $3000 and you can guess which one is from your local agent and which one is the one remote from an office in the middle of nowhere in your state.

When you need to file a claim it is always the local claim adjuster who came out anyways.

 

[atikovi]

Last year it increased by nearly $500, and this year it increased nearly $250. We have never filed a claim,

That's all? Lucky you. Last my FL policy went up $800 and this year the company pulled out of Florida entirely. Had to find a replacement for $1400 more at $3,600. I had contacted Kin which has better rates, around $2,400, but requires a wind mitigation report. Nobody there now for an inspection so maybe next year.

 

[PandaBear]

Think of it this way, insurance is basically a casino and if your casino is going out of business it would not give you a very good odd, every casino has different customers and will have different odds because they may win or lose at different amount.

 

[The Critic]

When we went with mercury (broker), I found that we could get car & home for what farmer's (local agent) only gave us car insurance for, with an extra hundred or two dollars per year, to spare. You pay a lot for that local office & the employees.

I don't know if changing the distribution model always results in lower pricing to the end user. Direct writers such as Geico have always prided themselves on a lower expense ratio, but in return, they end up using most of those savings towards claims because they tend to write at a higher portfolio loss ratio.

 

[PandaBear]

I don't know if changing the distribution model always results in lower pricing to the end user. Direct writers such as Geico have always prided themselves on a lower expense ratio, but in return, they end up using most of those savings towards claims because they tend to write at a portfolio loss ratio.

True, in theory the lower the cost of the vendor / service provider the lower fee they must charge to keep their business alive. In practice if they are lower priced they may make more money spending those profit on advertisement on the kind of customers they cater to (i.e. upper middle class, lazy, low risk).

I don't see Geico being any cheaper than others, at least for me they are not cheaper, and when I told them another insurance is cheaper they told me to go to them instead. They just don't think I fit their target customer profile.

Same for bundling home and auto, I always end up keeping them separate and it ends up saving me hundreds every year.

Also sometimes when they cut corner hiring cheap workforce or eliminate commission to save on expense, they will backfire because talents end up at the competitors.

 

[FordMan59]

I'd go with a company that has cheaper rates. I used to be insured with Farm Bureau of KY. When I had a water heater leak in 2016 they recommended I get an estimate from Servpro or Paul Davis. The estimate Servpro gave me was under $5K and didn't even mention drying anything out just coming in and replacing some flooring and drywall. I also called Paul Davis Restoration another of their recommendations, their reply was are you doing the work or are you hiring it done. I asked them what difference does it make it's the same amount of damage either way. I waited 2 or 3 weeks for an estimate which I never received. These 2 companies were giving law ball estimates for the insurance company for anyone doing the work themselves. I got 2 other estimates from persons of my choice. One was a general contractor at $48,500. the other was another water/mold remediation company at about $25,000 not counting profit and overhead of 20% since KY law doesn't allow an insured individual doing the work to collect it. I got my first payment for the initial estimate fairly quick. When the work was started there was unknown damage uncovered for a few more thousand dollars and the adjuster kept dragging his feet about paying the remainder of the claim. Finally I got tired of waiting and called and told him the issue was going to be resolved that day or I was getting the state insurance commission involved. In less than an hour he was at my front door with a check in hand. In the beginning I was planning to hire the work done but they were giving me about a 3-4 month timeline to get everything done. I ended up buying a dehumidifier drying everything out, cleaning/painting/treating the damaged studs/floor joists for mold and replacing the damaged insulation/flooring/drywall and had everything back together myself in less than a month. After that experience with FB I switched to another insurance company and haven't looked back.

 

[boulderdentist]

Hey, I live in Colorado on the front range. We have a consumer expert who recommends a company which is a broker and represents about 25 companies. Compass insurance has been great. The consumer expert states there is not loyalty nor reward for longevity with an insurance company, they just keep creeping up your rates. Compass will do an insurance check up, report back, tell you have a great deal or make recommendations for a new company with rates. I have two cars, a home, and was switched to Safeco from A.F. I am saving nearly $2500.00 per year with equal or better coverage. The key is that they represent multiple companies, not a captive agent beholden to one company. On homeowner's for $30 a year now have sewer line coverage. Very satisfied, have heard insurance check ups on the radio consumer show and they usually save substantially.

Scott