Homeowners insurance rate hike

[gordon_as]

Just recieved the invoice for our homeowners policy renewal. Funny how when the office called me a couple weeks ago to see if any changes were needed , they forgot to mention that our rates were going up 46% over last years price.

3 different insurance companies say our replacement cost ( for the structure ) is around $380,000 . I wonder if any of them would like to purchase my house AND PROPERTY for a steal of a deal at $340,000 ?

[kgcayenne]

Last year, my insurer said this was as a result of Alberta's floods. I wonder if that is still having fallout effect on our rates.

[Drip_Torch]

Last year, my insurer said this was as a result of Alberta's floods. I wonder if that is still having fallout effect on our rates

From what I see - I'd say insurance companies are getting wacked with increasing frequency right around the globe.

It's much bigger than the Alberta floods. While watching the Australian fire season, I became familiar with a phenomena that became known as "storm-o-clock". On the most intense day I think it was something like 5000 lightening strikes in Brisbane, and I recall a number in excess of 17,000 over 5 days - and of course, that happened with all the hail and flash flooding that would be associated with such an intense storm. Less than 150 kms away... it was fire season as usual.

Ice storms that coat everything with 6 inches of ice... Slovenia's Feb 2014 storm is said to have wiped out, or damaged 80% of the standing forest in the country. Tornado's that hit the alley in December - not to mention a weak one that hit downtown LA. Wildfires and the chain reaction conflagrations that are taking place in the interface zones. (Valparaiso, Chile - 13 dead and over 1100 buildings destroyed over three days.) And, flooding that appears to be happening with increasing regularity in all corners of the globe.

... If the insurance companies had to replace your house, they couldn't replace it with "your house" - it would need to be built to today's codes and standards.

Frankly, I don't see insurance rates getting any better, any time soon.

[kgcayenne]

...or any less necessary.

[Glacier]

My insurance company says that the replacement value of a modest, nothing fancy house is $200/sq. ft. This seems a bit high, but I figure that if they apply this to everyone else it doesn't really affect rates since everyone else is in the same boat.

Insurance rates have been going up for a variety of reasons, but one of the big ones is that insurance companies make their money by investing the market, and since the market has not been giving them the returns that it used to, they have to up their rates to compensate.

One way to save on rates is to look at any organizations to which you might belong because most of them offer special group rates to their members. You might be part of a professional association or a recreational club. Even if you're a member of PETA, you might want to join the BC Wildlife Federation just to save on insurance.

[Hassel99]

I don't recall the exact numbers but I recall reading that weather related losses in 2012 were about a 1 billion dollars in Canada. in 2013 (Alberta and Toronto floods among other events) it jumped to 3.5 billion.

[Bsuds]

Ours went up approx $7 and that was less than 10%

[pentona]

I've had insurance companies that try to up my rates and hope that I wouldn't notice. All I do is tell them that if they don't lower it at least to where it was before, I will go elsewhere. It always works for me.

[kgcayenne]

Mine, a condo policy for a townhouse, went up by $6.16, and that's 23%.

The comparison is interesting.

[twobits]

Two years ago I was paying 3800/yr for house insurance. It had quadrupled in 8 yrs. For interests sake I asked my broker what the premium would be if I increased the deductible from 500. They gave me options ranging from 1000 to 5000 in deductible. Taking the 5000 deductible dropped my premium from 3800 to 1485.
The reality and my rational is that my primary concern is catastrophic loss and not a carpet burn or leaky sink drain I should have been aware of anyway, or a 25 dollar pan I can put under the hot water tank if it leaks. It's claims like that that really drive insurance rates. Does anyone doubt that multiples of thousands have not had their flooring replaced for 500 bucks because of dog damage, a candle, or the kids having a heyday with packs of koolaid powder? You take a 5k deductible and the insurance company knows they will not be seeing frivolous and essentially fraudulent claims. You in return get a rate that still protects your major asset when it really counts.

[Anonymous123]

Two years ago I was paying 3800/yr for house insurance. It had quadrupled in 8 yrs. For interests sake I asked my broker what the premium would be if I increased the deductible from 500. They gave me options ranging from 1000 to 5000 in deductible. Taking the 5000 deductible dropped my premium from 3800 to 1485.
The reality and my rational is that my primary concern is catastrophic loss and not a carpet burn or leaky sink drain I should have been aware of anyway, or a 25 dollar pan I can put under the hot water tank if it leaks. It's claims like that that really drive insurance rates. Does anyone doubt that multiples of thousands have not had their flooring replaced for 500 bucks because of dog damage, a candle, or the kids having a heyday with packs of koolaid powder? You take a 5k deductible and the insurance company knows they will not be seeing frivolous and essentially fraudulent claims. You in return get a rate that still protects your major asset when it really counts.

3800 seems steep no matter what the deductible. Your house must be in the 1.5 million dollar range.

[kgcayenne]

More incentive to live on the low-down.

[twobits]

3800 seems steep no matter what the deductible. Your house must be in the 1.5 million dollar range.

Not quite but I am not ashamed of having a nice home. I worked hard for it. There are other things that come into play like not being within 1000 ft of a fire hydrant that drive my premiums higher.
I am just throwing out the possibility that others might consider a higher deductible to reduce their premiums. Too often we do not know what questions to ask our brokers. It is after all in their best interest to sell you the highest cost premium they can considering the bulk of their salary comes from commission. They may quote you prices from all of the underwriters they have shopped your policy to but how many of them have ever asked you if you would consider a higher deductible to reduce your premium?

[rookie314]

My insurance company says that the replacement value of a modest, nothing fancy house is $200/sq. ft. This seems a bit high, but I figure that if they apply this to everyone else it doesn't really affect rates since everyone else is in the same boat.

Insurance rates have been going up for a variety of reasons, but one of the big ones is that insurance companies make their money by investing the market, and since the market has not been giving them the returns that it used to, they have to up their rates to compensate.

One way to save on rates is to look at any organizations to which you might belong because most of them offer special group rates to their members. You might be part of a professional association or a recreational club. Even if you're a member of PETA, you might want to join the BC Wildlife Federation just to save on insurance.

Your gonna have to explain that one. The markets are at record highs so I don't understand the return on investment argument.

[gordon_as]

Mine went from $800 aprox to $1150 aprox. Good points twobits , I will look into raising my deductable up from $1000. Like you , I am really only concerned about major disasters like a fire. We actually went ahead and bought insurance from a different company to save $200 , and a different broker just because they didn't bother to mention that our premium was going to skyrocket even though they knew.