Insurance woes ...

[Marie17]

Just looked at WWL's 870 am website and found some "yikes" article about how much insurance rates might be going up.

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Affordable homeowners insurance mostly a thing of the past in south Louisiana
10:04 AM CDT on Monday, July 31, 2006
Jeremy Shapiro / Houma Courier

excerpt from their site...

This problem isn’t unique to Louisiana. Other Gulf Coast states have experienced insurance availability problems. Some companies are exiting coastal markets in Florida, Alabama and Mississippi. Those staying behind in Florida are asking state regulators for hefty rate increases.

State Farm’s rates in Florida will increase an average of 52.7 percent this year. Nationwide Insurance Co. of Florida asked the state earlier this month for permission to raise homeowners rates by an average of 71.4 percent.

Locally, if you already have homeowners insurance, for the most part you can renew your policy -- albeit at a higher cost. Also, some companies will allow you to transfer your policy if you move, though that’s not always the case, as Guidry found out.

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It seems this is just TOO scary to even think about.

So my question is this, do other states besides those that are in the "gulf region" plagued by substantial increases if a natural disaster hits. How much do insurance rates go up when a tornado hits a particular town or county? Are those customers even allowed to get the "wind" damage endorsement? What about California regarding the earthquake endorsement? How much are those and do insurance companies even write them even after an earthquake? And what are the deductibles? I know when we lived in Texas near "tornado alley" we were able to get "wind" coverage but our deductible was $11,000. Is that what the gulf coast residents are going to be facing? I see it mentioned Florida, Louisiana, Alabama, Mississippi but left out Texas? Have any of the people that reside in Texas received information regarding increasing of insurance rates.

 

[kvogel11202]

Just looked at WWL's 870 am website and found some "yikes" article about how much insurance rates might be going up.

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Affordable homeowners insurance mostly a thing of the past in south Louisiana
10:04 AM CDT on Monday, July 31, 2006
Jeremy Shapiro / Houma Courier

excerpt from their site...

This problem isn’t unique to Louisiana. Other Gulf Coast states have experienced insurance availability problems. Some companies are exiting coastal markets in Florida, Alabama and Mississippi. Those staying behind in Florida are asking state regulators for hefty rate increases.

State Farm’s rates in Florida will increase an average of 52.7 percent this year. Nationwide Insurance Co. of Florida asked the state earlier this month for permission to raise homeowners rates by an average of 71.4 percent.

Locally, if you already have homeowners insurance, for the most part you can renew your policy -- albeit at a higher cost. Also, some companies will allow you to transfer your policy if you move, though that’s not always the case, as Guidry found out.

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It seems this is just TOO scary to even think about.

So my question is this, do other states besides those that are in the "gulf region" plagued by substantial increases if a natural disaster hits. How much do insurance rates go up when a tornado hits a particular town or county? Are those customers even allowed to get the "wind" damage endorsement? What about California regarding the earthquake endorsement? How much are those and do insurance companies even write them even after an earthquake? And what are the deductibles? I know when we lived in Texas near "tornado alley" we were able to get "wind" coverage but our deductible was $11,000. Is that what the gulf coast residents are going to be facing? I see it mentioned Florida, Louisiana, Alabama, Mississippi but left out Texas? Have any of the people that reside in Texas received information regarding increasing of insurance rates.[/QUOT


Here in Massachusetts people on Cape Cod can't get insurance through regular companies because of wind damage from ocean...companies are stopping accepting that business and nonrenewing policies if a claim is filed. Insurance Comapnies are not nonprofit organizations, so unfortunately the rates increase with the risk. Stinks, but it's the way it works.

 

[mickeyfan2]

Honestly I am surprised it is not even higher. The amount that the insurance companies paid out was astronomical.

 

[Marie17]

I can understand why they increase - they are not a government agency - they are in it for a profit.

But we lived in tornado alley for approximately 4 years and even had a "small" tornado that passed less than 500 feet from our house. We had no damage. Our insurance rates did not increase even if it was that close - even some of the people that had a claim - their insurance went up but only minimally - the standard that was expected when you make any claim. I know that it is based on "risk assessment" but it seems that the "hurricane" clauses such as wind - hail - flood) are being adversely treated different than other natural disasters.

Do we have anyone from California? We actually have an earthquake endorsement on our policy and our deductible would be over $11k. We are no where near California (actually east coast) and the nearest fault line is not even in the next state - it's two over. So what happens for the earthquake insurance - those are not cheap - one brick or the foundation crack - you basically need to rebuild - so full replacement coverage is needed just like you need for "wind - hail - flood"

 

[mickeyfan2]

Do we have anyone from California? We actually have an earthquake endorsement on our policy and our deductible would be over $11k. We are no where near California (actually east coast) and the nearest fault line is not even in the next state - it's two over. So what happens for the earthquake insurance - those are not cheap - one brick or the foundation crack - you basically need to rebuild - so full replacement coverage is needed just like you need for "wind - hail - flood"

No in CA but we do carry earthquake insurace. Our deductible is 2% of the loss. There is a minor fault line in our state and we have had rating of 2 earthquakes, but those are extremely minor. Getting small ones is best, they cause the least amount of damage.

 

[DVC Sadie]

Prior to Katrina we paid about 4000.00 a year for homeowners and this year we paid over 12000.00 not including flood insurance. Next year the premium is going up over 90% bringing our cost to about 26,000.00 with flood insurance.

I have already talked to a lot of people who will not be able to afford coverage next year and have had to get a 2nd job to pay for this years insurance.

I don't know how a lot of families will be able to keep up with the increase of premiums, year after year.

 

[Marie17]

This is exactly what I was talking about DVC Sadie. Has anyone done any research into the percentage of increases that other states that have a tendency to have natural disasters go up after claims are filed?

Your increase is outrageous. I can understand if they raise the deductibles to try to off-set losses but 12k for just the premiums a year - that's an extra $1,000 a month. $26k for next (over $2k a month just for insurance) - OUCH - OUCH - OUCH! We would definitely have to have to take another job just to stay in our house if we lived there.

I guess with rates that high - and what you are saying does not seem to be out of the ordinary unfortunately - the entire gulf-coast region will have their own sort of re-build due to the unaffordability of insurance. It will definitely become a coast of only the wealthy.

 

[mickeyfan2]

Prior to Katrina we paid about 4000.00 a year for homeowners and this year we paid over 12000.00 not including flood insurance. Next year the premium is going up over 90% bringing our cost to about 26,000.00 with flood insurance.

I have already talked to a lot of people who will not be able to afford coverage next year and have had to get a 2nd job to pay for this years insurance.

I don't know how a lot of families will be able to keep up with the increase of premiums, year after year.

If you don't mind my asking, what is the house insured for/worth and is it on the Gulf?

 

[DVC Sadie]

If you don't mind my asking, what is the house insured for/worth and is it on the Gulf?

This house is insured for 695,000 and had no damage from Katrina, thats why we bought it. It is not in a flood plain and is about 7 to 8 miles north of the Gulf of Mexico.

The house that we lived in prior to the above home was on the water but on Bay St. Louis. That house had 29 feet of water and took out all of the furniture, appliances and everything else. The structure is still standing but we won't start rebuilding until November.

A lot of the national insurance companies will not underwrite a policy for less than 500,000 so it makes it very difficult for some families to even find homeowners insurance let alone affordable insurance.

What makes me sad is the fact of a lot of families are moving away due to the fact of higher costs of living in this area.

 

[lowie]

What makes me sad is the fact of a lot of families are moving away due to the fact of higher costs of living in this area.

BINGO! and this is exactly why the housing markets are crashing like crazy here in florida. so many people just can't afford the homeowners insurance, new buyers also don't want to pay those astronomical amounts, so the houses don't sell and are sitting on the market longer and longer.

i live about 13 miles off the ocean coast of florida, had major damage in wilma and actually got a better policy at $100 less this year then last year. but i'm sure that next year i won't be so lucky, and if we have another catastrophic hurricane i'll really be in deep doo-doo.

my advice is to make sure you are not over insured, make sure that if the value of your house drops that your insurance does as well AND that you continue to shop for new and better insurance. there is nothing stopping people from moving from one company to another as often as they can get a better deal.

 

[mickeyfan2]

DVCSadie - All I can say is wow. Our homeowner's insurance is $1300 and that is hight for our area.

 

[SplshMtn99]

my advice is to make sure you are not over insured, make sure that if the value of your house drops that your insurance does as well AND that you continue to shop for new and better insurance.

Very BAD advice. You do NOT insure for the market value of your home, you insure for its REPLACEMENT value. What it will cost in material & labor to repair / replace the home. (former insurance agent here)

And I just can't fathom the premiums you guys are quoting. WOW! Best wishes.

 

[mickeyfan2]

Very BAD advice. You do NOT insure for the market value of your home, you insure for its REPLACEMENT value. What it will cost in material & labor to repair / replace the home. (former insurance agent here).

So true. Our house is built with premium construction (we were the contractor) so our house is overinsured so it can be rebuilt with premium contstruction. That is why our payment is so high for our area.

 

[Miss Jasmine]

Very BAD advice. You do NOT insure for the market value of your home, you insure for its REPLACEMENT value. What it will cost in material & labor to repair / replace the home. (former insurance agent here)

And I just can't fathom the premiums you guys are quoting. WOW! Best wishes.

Very good advice. I meet with my agent every year and go over the replacement costs. In the five years we have lived in our home our premium has doubled. Now State Farm was approved for another 50% premium hike. Between the premium increases and the construction cost increases, it is unbelievable.

 

[DVC Sadie]

DVCSadie - All I can say is wow. Our homeowner's insurance is $1300 and that is hight for our area.

I can't even say wow anymore. It's more like OUCH! Where do you live that your insurance is so reasonable? We might have to move there.

 

[DVC Sadie]

Very BAD advice. You do NOT insure for the market value of your home, you insure for its REPLACEMENT value. What it will cost in material & labor to repair / replace the home. (former insurance agent here)

And I just can't fathom the premiums you guys are quoting. WOW! Best wishes.

ITA, in regards to insuring for the replacement value and for what it will cost in materials and labor. We had the insurance guy out here to be sure we had enough coverage.

Thank you for your best wishes, we need them right now. I am hoping and praying for a very quiet hurricane season.

 

[mickeyfan2]

I can't even say wow anymore. It's more like OUCH! Where do you live that your insurance is so reasonable? We might have to move there.

PA

 

[DVC Sadie]

PA

It is beautiful up there.

 

[lowie]

Very BAD advice. You do NOT insure for the market value of your home, you insure for its REPLACEMENT value. What it will cost in material & labor to repair / replace the home. (former insurance agent here)

And I just can't fathom the premiums you guys are quoting. WOW! Best wishes.

what i meant was that with the real estate market bubble about to burst that even replacement values will go down.

 

[mickeyfan2]

It is beautiful up there.

Thanks. We live on 10 acres of rolling hills. We love it here. But we do have to deal with goundhogs.