Do you think property insurance carriers (home) have been allowed to grow predatory?

[focusondisney]

All I know is I am retreating from the owners market in large part because of insurance, I don't trust it. I do not want to buy again because renters insurance is a fraction of homeowners and I endure none of the risk of a homeowner. I read too many stories of $10000 jumps in policies - yikes. Other perks: If the neighbors are awful I can move, if the places starts getting neglected I move, if taxes jump I move, if the neighborhood changes I move, if an industry I don't like moves in I move, even if the place starts to look dated I do not need to update I just move. I would consider owning again if these carriers get a tighter leash.

You don’t think those insurance increases are being passed onto renters?? Of course they are, the owners of rentals aren’t taking the increases out of their profits anymore than any other business does. It all gets passed onto the consumer. If your rent gets increased from things like insurance rates, it’s a good bet insurance rates will cause rents to be increased in the whole region. So be prepared to move to another area or less desirable housing.

You make moving as a renter sound like no big deal. It certainly is in most areas. Families can’t find reasonably priced rental housing in many areas of the country. Moving costs money, have your first & last month’s rent plus your security deposit saved up. And don’t count on getting that deposit back. You might also need a security deposit for some utilities. You have to pass a credit check, which can be challenging for low or lower middle class. Might need to hire movers which costs more money. Most people aren’t moving unless they absolutely have to.

 

[barkley]

One majorly underappreciated aspect is how much repair costs have gone up, both for houses and cars. It makes every loss event so much more expensive, they have to be more selective about what they will insure.

the issue many homeowners in nearby to us fire devastated areas of recent years have been faced with is the cost of rebuilding OLDER homes vs. newer and finding themselves to be grossly underinsured. there's allot of anger when folks see the newer construction homes being rebuilt much faster/entirely covered by a neighbor's policy which they know to be comparable in coverage to their own when they are facing huge delays and notices that their coverage will not cover all the expenses of their even smaller re-build. what they are up against which their neighbors don't face is the added costs of remediation (all that old asbestos that's now burned and soaked into the ground) and bringing their homes/lots up to current code standards. lots of older homes are grandfathered and exempt from current building code standards but a total loss requires they be brought up to date-when you are talking about things like major infrastructure to foundations, lot line distances, utility easements, the portion of public utility connections on the home owner (sewage piping in particular) it can cost way more than rebuilding that newer house that was already in step with all of those criteria.

I feel so badly for everyone affected by these current fires but it will be interesting to see what if any changes occur with reconstruction in both traditional neighborhoods and the more affluent (in the more affluent psudo-rural areas I will be particularly interested to see b/c I recall many, many years ago a major fire in California devastating similar topography and the fire and building officials saying the area was a recipie for disaster for decades and just a matter of time due to california's then building codes that allowed for homes to be located in known horrifically high risk areas).

 

[LuvOrlando]

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I think the Dis needs train wreck insurance.

I do think you would benefit, lots of runaway trains.

 

[LuvOrlando]

Sometimes its easier to let people sit in their bias than bother explaining things they wont understand because of cognitive dissonance, happens quite a lot lately.

 

[BorderTenny]

Watching some of live fire videos this morning, in some cases it is clear the homeowners didn't take the most preliminary steps to protect their homes. No defensible spaces. Should over the long term insurance companies be required to cover higher risk clients without being allowed to charge appropriate rates?

The most preliminary step that needed to be taken by homeowners (and other residents) would have been electing officials who believe in implementing the most basic steps to prevent/mitigate these wildfires to begin with.

 

[bcla]

Homeowner's insurance is sold by private companies who are running a for-profit business. Clearly, in parts of the country where risks are higher, the cost of insurance will also be greater. The money to pay claims doesn't just fall out of the sky, there has to be a pool of reserves that each company manages based on risk/premiums/claims/etc. Some people can deny global warming/climate change is real, but the reality is in places like Florida the number/intensity of major storms is increasing which means the costs associated with these storms is also increasing. If rates don't rise, there won't be sufficient funds to cover future disasters. How much influence the govt should have in this area is probably a topic for a separate forum.

Not necessarily. Quite a few insurers are not-for-profit mutual benefit corporations. Regional AAA insurance exchanges clearly are. When my home was insured through AAA I received an annual dividend that went back reducing my next year's premium.

What a lot of people don't realize is that several reasonably big national insurers are also not-for-profit mutual benefit corporations. That includes the largest home insurer in the US - State Farm. Legally, State Farm is owned by its policyholders.

https://insuranceindustryblog.iii.o...lks-about-the-power-and-promise-of-mutuality/​

State Farm is unusual among large U.S. insurers in that it has retained its mutual structure and continues to rely primarily on a network of more than 19,000 captive agents to sell its products. Founded in 1922 by a farmer who believed farmers shouldn’t have to pay the same auto insurance rates as city dwellers, State Farm has grown to become the largest home and auto insurer in the United States, in terms of market share and premiums written.​

​

The mutual structure – in which policyholders own the insurer – was popular at the time, but in recent decades many mutuals have converted to stockholder-owned companies to access capital needed to grow more quickly.​

 

[NaptownMom]

Not necessarily. Quite a few insurers are not-for-profit mutual benefit corporations. Regional AAA insurance exchanges clearly are. When my home was insured through AAA I received an annual dividend that went back reducing my next year's premium.

What a lot of people don't realize is that several reasonably big national insurers are also not-for-profit mutual benefit corporations. That includes the largest home insurer in the US - State Farm. Legally, State Farm is owned by its policyholders.

https://insuranceindustryblog.iii.o...lks-about-the-power-and-promise-of-mutuality/​

State Farm is unusual among large U.S. insurers in that it has retained its mutual structure and continues to rely primarily on a network of more than 19,000 captive agents to sell its products. Founded in 1922 by a farmer who believed farmers shouldn’t have to pay the same auto insurance rates as city dwellers, State Farm has grown to become the largest home and auto insurer in the United States, in terms of market share and premiums written.​

​

The mutual structure – in which policyholders own the insurer – was popular at the time, but in recent decades many mutuals have converted to stockholder-owned companies to access capital needed to grow more quickly.​

Same is true of health insurance companies: people complain the costs are due to profits even when many of the insurance companies--and hospitals!-- are nonprofit, and it's simply that the services are expensive.

 

[barkley]

The most preliminary step that needed to be taken by homeowners (and other residents) would have been electing officials who believe in implementing the most basic steps to prevent/mitigate these wildfires to begin with.

this is vital. we live ruraly and the small university town (technically a city) near us is SO RIPE for the development of more subdivisions, more apartments... esp. since the county has changed some zoning from rural to mixed use (in an attempt to encourage residential developments) but the city elected officials have stood firm on no growth b/c the aging infrastructure for fire protection is insufficient for existing needs let alone increased. these politicians are reelected term after term b/c existing residents encourage and support them as they work towards shoaring up and improving existing services while being very proactive in wildfire education and prevention.

 

[LuvOrlando]

Interesting:
https://www.usatoday.com/story/mone...-not-buying-homeowners-insurance/74144566007/

Not great:
"At the greatest risk are low-income homeowners and homeowners of color who disproportionately go without homeowners insurance, research shows."

 

[LuvOrlando]

Yikes for vehicles, sheesh

https://www.motor.com/2025/01/auto-insurance-rate-increases-are-slowing-down-in-2025/
"While premiums are rising for the 7th straight year, on average, drivers should expect to see smaller increases in comparison to last year’s reported 16.5% rate increase."

Did anyone else catch how much premiums will go up with a moving violation?

Was thinking of a new car, now thinking maybe not.

 

[tvguy]

The most preliminary step that needed to be taken by homeowners (and other residents) would have been electing officials who believe in implementing the most basic steps to prevent/mitigate these wildfires to begin with.

It was interesting to hear today that apparently the area of the Palisades fire has not had a major fire in 50 years. That means a lot of elected officials over the decades had a hand in the situation when the fires broke out.
But California, after these fires, needs to review many things, including the current push to increase population density in urban areas in an effort to make housing more affordable. Things like ADU (Auxilary Dwelling Units) in the backyards of 100 year old homes, on narrow alleys. Alleys so narrow modern fire trucks can't get in.

 

[Cannot_Wait_4Disney]

I do think you would benefit, lots of runaway trains.

Interesting.

Sometimes its easier to let people sit in their bias than bother explaining things they wont understand because of cognitive dissonance, happens quite a lot lately.

Fascinating.

 

[MillauFr]

Was thinking of a new car, now thinking maybe not.

Cars are very expensive and out of reach of many lower income residents. I gave up mine 25 years ago because of the high costs. Have you considered doing without one?

 

[china mom]

You don’t think those insurance increases are being passed onto renters?? Of course they are, the owners of rentals aren’t taking the increases out of their profits anymore than any other business does. It all gets passed onto the consumer. If your rent gets increased from things like insurance rates, it’s a good bet insurance rates will cause rents to be increased in the whole region. So be prepared to move to another area or less desirable housing.

Spot on. Two of my rentals just had a mortgage increase sur to insurance premiums increasing. One went up $50/mo and the other $65. Guess how much rent increased on those two houses at lease renewal.

 

[EACarlson]

Makes total sense. But the flip side is what prevents companies from doubling, tripling, quadrupling(?), the premiums (if not more)? Personally, I don't think that's right either.

Competition. If State Farm is charging $1k/month and another company is charging $500/month, it's a pretty easy decision to make. My belief is that the only time the government should be setting the prices is if it's a government imposed monopoly. If it's an open market, let it be a free market.

 

[DCLMP]

It was repeated over and over in every Insurance class I ever took, I used to work in Insurance in NYC.
The reasoning was this:
It is hard for poor people to save enough to buy things. ( I grew up quite poor so I agree)
The biggest expenses for people are often a home and a car.
Most people in the middle can not afford a total loss of a home or a car.
If these people did not have insurance they would not buy these things because they could not replace them.
Because Insurance replaces things people have the confidence to buy them and spend elsewhere.
This created the middle class.

Now maybe they lied, dunno, I assumed they weren't lying to me but it made sense, still maybe they did lie.

All I know is I am retreating from the owners market in large part because of insurance, I don't trust it. I do not want to buy again because renters insurance is a fraction of homeowners and I endure none of the risk of a homeowner. I read too many stories of $10000 jumps in policies - yikes. Other perks: If the neighbors are awful I can move, if the places starts getting neglected I move, if taxes jump I move, if the neighborhood changes I move, if an industry I don't like moves in I move, even if the place starts to look dated I do not need to update I just move. I would consider owning again if these carriers get a tighter leash.

The majority of Americans are middle class. I don't think insurance companies created that, but insurance does provide a safety net. I also don't think it's just the lower and middle class that couldn't afford to replace their homes, I would say 95% or more of Americans could not.

 

[sam_gordon]

Competition. If State Farm is charging $1k/month and another company is charging $500/month, it's a pretty easy decision to make. My belief is that the only time the government should be setting the prices is if it's a government imposed monopoly. If it's an open market, let it be a free market.

Provided there is enough notice for someone to "shop around", yes. We shopped around last year after Nationwide said they were raising our rates and saved about 10-20% (IIRC) by going to a smaller company.

 

[MICKIMINI]

Got a call from BIL in HI yesterday. His condo insurance has gone from $900 per month to $2000 per month. They also had a special assessment of about 10K each unit. There area is not what would be considered dangerous but their insurance company suddenly decided it is. Can you imagine over 13K per year added to your "budget"? Thankfully, BIL and SIL can afford it, however I'm sure many other residents cannot.

Our homeowners went up 50% last year (NH) on brand new construction.

In NH we have to pay for non insured on our auto policy to cover our vehicle should a dead beat without insurance damage it. You can pursue legal action against that person, however they likely don't have any money to begin with.

Going without is just not an option IMO.

 

[cabanafrau]

From what I've seen observing from the legal system for about 20 years now is insurance is now designed not to pay out, period. It doesn't matter if it's home, auto or medical, their primary business focus is now centered around not paying claims unless absolutely strong-armed into it by protracted litigation.

 

[sam_gordon]

From what I've seen observing from the legal system for about 20 years now is insurance is now designed not to pay out, period. It doesn't matter if it's home, auto or medical, their primary business focus is now centered around not paying claims unless absolutely strong-armed into it by protracted litigation.

We did not have that problem with Nationwide. We had two home claims, one when a toilet inlet valve broke while we were out of town and caused tens of thousands of dollars in water damage, and the second following a hail storm that forced a replacement of our roof.

We've changed from them (also had them for auto) when they tried to up our auto rate.