Homeowners Insurance

[BankerCat12]

Just curious if there is anyone on here selling insurance. Being on the banking side, I see quotes everyday and its crazy how fast the premiums are rising. I still see some premiums at levels for the past few years but some are twice as much as they used to be.

My biggest question is how can some companies like State Farm say they are no longer going to write insurance in Florida? That is red lining and not allowed in lending so not sure how insurance companies can get away with it.

 

[Dore95]

Redlining is refusing to insure because of race/national origin. Insurance companies want to stay out of Florida (or at least parts of Florida) because of the risk involved (hurricanes). That is not illegal.

 

[DSmith21]

California has some laws on the books that are causing insurance companies to flee. Companies have a right to decide where they want to sell their products. It's not just happening in FL or other high risk states (weather related).

I just got my homeowners renewal from Safeco /Liberty and they want a 35% increase in premium. I have never made a claim and Kentucky isn't a top risk state. Needless to say that I am shopping for a new carrier.

 

[CAT Scratch FVR]

Costs for materials to rebuild have risen, costs to auto body work have risen, inflation baby.
Companies in Florida and California have pulled back from writing any new business and non-renewing others,
You can exclude wildfire, flood, etc but if you can't predict how courts will rule in liability cases you'll never get enough premium to cover losses.

 

[GJNorman]

Climate change is real!

 

[CastleRubric]

Been thinking about this lately & its not a topic I know much about

We learned that our home owners insurance wasn't going to be renewed - because of the evaluation of an underwriter

That means someone within the previously active insurance company somehow assessed that it was too risky for them to continue supporting right?

I haven't seen details on what criteria they used but will be asking

Our winchester home IS older but previous occupants upgraded and modernized several aspects & and there's never been a claim made by us

Question about insurance companies - is it possible that they're being financially stressed more in the last 5-6 years - and maybe that's driving stricter criteria for maintaining policies?

I don't know the industry well enough to form the question any better but would love to chat it up later with anyone here who works in that world

Its going to be interesting to see how requirements for home ownership may change in places like FL etc

 

[CAT Scratch FVR]

There's more data available now than ever before. Drones/satellite footage also helps assess areas, conditions of properties, etc. They can tell if a roof needs replaced, is the property kept up, etc.
Wind/hail damage has picked up in states you never used to see.
Some carriers find out they are oversaturated in a specific region, not enough spread of risk, so they stop issuing new business.
Reinsurance rates are rising, putting pressure on the primary carrier pricing.
Pretty simple stuff too, like construction type, will your house burn to the ground quickly? How far away are you from the fire station, water sources, etc.

 

[B.B.d.K.]

Question about insurance companies - is it possible that they're being financially stressed more in the last 5-6 years - and maybe that's driving stricter criteria for maintaining policies?

Is it possible? It's fact. Speaking in KY, the widespread March '23 wind event alone was the biggest loss (700M) in my company's 100 year history...and that's not even counting the seemingly endless tornados, floods, and other events during the last 3 years.

Been a historic nightmare of a 3 year span for Insurers in a lot of places, not just the coast.

 

[CastleRubric]

Is it possible? It's fact. Speaking in KY, the widespread March '23 wind event alone was the biggest loss (700M) in my company's 100 year history...and that's not even counting the seemingly endless tornados, floods, and other events during the last 3 years.

Been a historic nightmare of a 3 year span for Insurers in a lot of places, not just the coast.

Holy shit - thats the kind of info i was hoping for

So within the insurance industry - I would assume there are different levels of capacity within the companies - like maybe local agencies vs larger corporations -

Are the smaller entities getting bought out or merged ?

Are there bailouts from the USG in any situations if certain insurers start drifting into bankruptcy?

Home and health / life insurance are normally separate business lines right?

So it sounds like there's more stress on these companies than they've experienced in a while -

What happens if enough insurers go broke or revoke services to homeowners -en masse - thats what im wondering

Plus the letters we we're getting - kicked off my natural, highly tuned paranoia

 

[CastleRubric]

Very helpful and timely thread yall - genuinely appreciate the responses

Weird but wonderful that these questions have been bugging me intensely lately & and here we are

 

[Cold Stout Beer]

Just curious if there is anyone on here selling insurance. Being on the banking side, I see quotes everyday and its crazy how fast the premiums are rising. I still see some premiums at levels for the past few years but some are twice as much as they used to be.

My biggest question is how can some companies like State Farm say they are no longer going to write insurance in Florida? That is red lining and not allowed in lending so not sure how insurance companies can get away with it.

I've got State Farm for home and auto and it's skyrockted. I asked my agent why since I never claim anything. She said "look at it this way, we're all in this together and when we have a lot of claims, we have to raise prices for everyone since we're all in the same bucket."

I said "so are illegals having lots of car wrecks?"

I never got a response back.

 

[Cold Stout Beer]

Holy shit - thats the kind of info i was hoping for

So within the insurance industry - I would assume there are different levels of capacity within the companies - like maybe local agencies vs larger corporations -

Are the smaller entities getting bought out or merged ?

Are there bailouts from the USG in any situations if certain insurers start drifting into bankruptcy?

Home and health / life insurance are normally separate business lines right?

So it sounds like there's more stress on these companies than they've experienced in a while -

What happens if enough insurers go broke or revoke services to homeowners -en masse - thats what im wondering

Plus the letters we we're getting - kicked off my natural, highly tuned paranoia

My agent at state farm said they've taken a net loss every year recently.

 

[ukalumni00]

One major issue is the large number of folks moving to FL and coastal areas. Anytime these storms hit the financial impact is much greater to these carriers than in the past. Skyrocketing reinsurance costs, etc. Fraud is incredible along with an enormous amount of injury attorneys suing for ridiculous amounts and liberal courts handing out insane rulings/financial awards to claimants. The whole system is as strained as it has ever been and then add in inflation, construction costs, etc that has skyrocketed as well.

 

[Pelosigalore]

I think that when claims go up, it makes sense that everyone has an increase. On the other hand, whoever has the claim should have the largest increase.

 

[CastleRubric]

So - to what extent does the Federal govt regulate insurance?
If you create a commercial policy for a family - are there federal acquisition type clauses or regulations?

Or is it a company (seller) specific framework that doesn't cite state / federal regulations?

PS - Israel started their military response against Iran about 25 minutes ago
I only mention this because the current parameters of this ME conflict "isn't business as usual "

 

[JumperJack]

I've got State Farm for home and auto and it's skyrockted. I asked my agent why since I never claim anything. She said "look at it this way, we're all in this together and when we have a lot of claims, we have to raise prices for everyone since we're all in the same bucket."

I said "so are illegals having lots of car wrecks?"

I never got a response back.

You touched on a big part of the problem.

I’ve come to believe that if you choose to build in a hurricane or wildfire zone, you ought to pay more. I know people will say that there’s risk everywhere but I haven’t had to file a claim in 25 years. Why should I pay more for illegals and people that want to live on the beach?

 

[Pelosigalore]

So - to what extent does the Federal govt regulate insurance?
If you create a commercial policy for a family - are there federal acquisition type clauses or regulations?

Or is it a company (seller) specific framework that doesn't cite state / federal regulations?

PS - Israel started their military response against Iran about 25 minutes ago
I only mention this because the current parameters of this ME conflict "isn't business as usual "

I’d rather just not pay sales taxes to the government on my premiums.

 

[bigblueinsanity]

Another big part of the price increase in these states, including ky, is the endless vehicle theft. Kia's were getting stolen and totaled left and right.

They eventually fixed the problem but there was a long window of time where the youths could just plug in a usb into the usb in the steering column and drive it off.

Insurance companies just spread out the loss. So that combined with floods and tornadoes caused the massive price increase.

 

[GJNorman]

You touched on a big part of the problem.

I’ve come to believe that if you choose to build in a hurricane or wildfire zone, you ought to pay more. I know people will say that there’s risk everywhere but I haven’t had to file a claim in 25 years. Why should I pay more for illegals and people that want to live on the beach?

are you unaware of the three insurance premiums needed to live on the Gulf?

Flood
Wind
Homeowner’s liability.

For a $2 million house near the Gulf, you’re looking at $30,000 a year for insurance.

 

[Atrain7732]

are you unaware of the three insurance premiums needed to live on the Gulf?

Flood
Wind
Homeowner’s liability.

For a $2 million house near the Gulf, you’re looking at $30,000 a year for insurance.

Yeah I live on a saltwater canal in SW FL and can personally attest to outrageously high premiums for most of us in the area. I get it and for me it’s just a cost of living in paradise type deal. Not gonna lie there is some level of frustration at certain insurance companies and what I perceive to be fairly blatant unprofessional business practices. Not until we went thru Ian did I realize the full extent. I have no issue with companies who decide not to insure here, but if you are going to do it don’t rip off your policy holders with legitimate claims.

 

[GJNorman]

Yeah I live on a saltwater canal in SW FL and can personally attest to outrageously high premiums for most of us in the area. I get it and for me it’s just a cost of living in paradise type deal. Not gonna lie there is some level of frustration at certain insurance companies and what I perceive to be fairly blatant unprofessional business practices. Not until we went thru Ian did I realize the full extent. I have no issue with companies who decide not to insure here, but if you are going to do it don’t rip off your policy holders with legitimate claims.

Take care down there. I hope it misses you.

We have had to fight it out with insurance companies. The wind guys will blame it on water and the flood insurance company will blame it on the wind.

 

[CastleRubric]

i realize insurance is supposed to help when things go wrong - but is there some kind of equivalent to force maejure (sp?) within policies - some set of criteria where the insurers DONT have to honor the payment if certain conditions occur?

In the kinds of contracts i managed over the years that's typically fires, floods, tornadoes, epidemics - even strikes - "Acts of God"


Maybe thats a stupid question but i bet some policies have parameters similar to federal contracts


I should have thought about this long ago
Genuinely appreciate the conversation

Brandi (my lovely bride) - has often asked me to consider moving into this field for an employer change

 

[CAT Scratch FVR]

i realize insurance is supposed to help when things go wrong - but is there some kind of equivalent to force maejure (sp?) within policies - some set of criteria where the insurers DONT have to honor the payment if certain conditions occur?

Standard policies, it's all covered unless it's specifically excluded, for the most part within each line of business coverage that you purchase.

Folks in wildfire or flood areas or wind typically have those exclusions.

In the Excess&Surplus markets, it's more standard to say what exactly is covered.

For instance, a manufacturing plant may be pretty innocuous to insure, property, auto, premises liability etc. But the actual product they manufacture is pretty hairy, from a product liability standpoint, so is excluded from the standard insurance form. This may require the insured to go out and get coverage for that product completed coverage. So, the E&S coverage will say we are only insuring for liability for claims as the result of this products fault.

 

[Atrain7732]

Take care down there. I hope it misses you.

We have had to fight it out with insurance companies. The wind guys will blame it on water and the flood insurance company will blame it on the wind.

Thanks man hunkered down in Ft Myers at the moment looks like it’s gonna hit a bit north we should be ok.

Recently played the blame game with the insurance guys hope I never have to do it again. When your entire business model hinges on making your customers go the most extreme lengths possible to get what is rightfully covered, that’s a shame. As usual, it’s the ones with the least who are most effected by these type of companies. I would have a hard time sleeping at night if I worked there, but that’s just me.

 

[WellerSR]

If the Hurricane is hitting North of you, the south will get more SURGE! Please get out of there to other side. We like to still have our Catpause friends to discuss all things. Praying for you.

 

[CAT Scratch FVR]

Some other things to note:

If your carrier is losing money, your rates will go up. Pay attention and look at their quarterly earnings release to view their combined ratio.

A lot of carriers getting killed by cars reported to be domiciled in KY and Ohio, but were really located in Florida via snowbirds, driving up auto premiums in those states when flood damaged those vehicles.