S/O Homeowner's Insurance

[wendow]

Thanks. We have American Family. DH says that he can't shop around for a new company until 2 years after a claim, which will be this coming December. I guess we will wait until next June to get a less expensive policy. I still would like to keep the Umbrella policy.

IIRC, you said your policy was $1200, maybe the umbrella policy is the $400 difference between yours and mine. Also do you have a wood shake roof? When we had one, our policy was $1600 on the same house.

 

[sukhakuli]

I guess I don't understand how it won't cover me? If my house is totaled the insurance company will send me a check for $360,000. There is no way I could afford to rebuild without the insurance. In Washington State the historical records show a magnitude 9.0 quake every 300 years. The last one was in 1700. Portions of Seattle rose or fell up to 10 feet during that quake. Most houses and many of the high rises will collapse or be badly damaged in a similar quake.

It's not just the cost and deductible. If I remember right, for us, we would pay several thousand dollars extra per year, plus hundreds of thousands in deductibles, and there were tons of loopholes and clauses. Like if the pipes burst or if the gas ignited, they wouldn't cover anything. If the land couldn't be built on again they wouldn't cover anything. It's crazy. It's like, we won't cover you unless a 7.5 happens on the 4th Friday of February kind of stuff. It's a joke.

Plus, like I said, the area of So Cal we live in isn't prone to major earthquakes anyway, so we don't need to think about it like people in the Bay Area do.

 

[pryncess527]

If the homeowner couldn't raise the funds for the deductible the insurance company would pay them nothing? That doesn't sound right to me but I am no expert and it may work that way.

Ditto. I thought they just subtracted the deducible from the payment. If you had $200,000 of insurance and a $20,000 deductible, they would not expect you to pay them $20,000 before they paid you $200,000 -- they'd just pay you $180,000.

But I don't live in CA, so I have no idea. I can't fathom living in a place where I was exposed to that level of risk with NO insurance to protect me from a catastrophic loss like home destruction.

 

[bdcp]

Ditto. I thought they just subtracted the deducible from the payment. If you had $200,000 of insurance and a $20,000 deductible, they would not expect you to pay them $20,000 before they paid you $200,000 -- they'd just pay you $180,000.

But I don't live in CA, so I have no idea. I can't fathom living in a place where I was exposed to that level of risk with NO insurance to protect me from a catastrophic loss like home destruction.

That's exactly how homeowners insurance works. You do not pay the insurance co the deductible. They take it out of what they pay out to you. It is not like medical insurance.

And, for rebuilding, they don't just send you a lump sum. They usually work with the builder and pay out the estimate/final bill, not the insured amount.

 

[disneypharm]

IIRC, you said your policy was $1200, maybe the umbrella policy is the $400 difference between yours and mine. Also do you have a wood shake roof? When we had one, our policy was $1600 on the same house.

Yes, umbrella policies are about $400. Our policy was $900 2 years ago June. We did have a wood shake roof at that time, but after a hail storm, we replaced the roof with another HOA-approved material. After replacing the roof, the policy went up to about $1200. We moved our car insurance to combine with the home insurance at that time, that's why DH thinks it went up just a little last year. This year it is $1600.

Just another thing. Several neighbors (similar square footage and less upgrades) sold their house recently higher than the asking price (higher than $500K) in bidding wars, so it is possible that the insurance is higher for that reason, but I don't think insurance companies check price increases before changing their yearly rates! Do they? Oh well, we will probably shop around next year to see. This is definitely a big jump.

 

[sukhakuli]

That's exactly how homeowners insurance works. You do not pay the insurance co the deductible. They take it out of what they pay out to you. It is not like medical insurance.

And, for rebuilding, they don't just send you a lump sum. They usually work with the builder and pay out the estimate/final bill, not the insured amount.

So let's say there is an earthquake and your house is a total loss. You owe 350,000. The cost to rebuild is 300,000 (you pay some for the land, often times what you are insured for is less than what the house and the land are worth). Your deductible is 100,000. So you have no house, a mortgage for 350,000, a check from the insurance company for 200,000 that usually goes to the mortgage company, not you, and it will cost 100,000 to rebuild. Some people could get a loan for the 100k, but most people couldn't. So you paid all those years several extra thousand dollars a year for your insurance company to send 200k to your mortgage company. And that's IF they do cover it, because like I said, if the pipes burst, they won't consider that earthquake damage, it's flood and so on. There's a ton of loopholes so they can get out of it. They're like Insuracare in The Incredibles.

It's the exact same thing with flood insurance, except you can buy in to a government flood insurance program. I don't believe there is anything like that for earthquakes. You're really better off spending that money putting in structural supports in your home that will withstand an earthquake because earthquake insurance is a scam.

 

[MillauFr]

So let's say there is an earthquake and your house is a total loss. You owe 350,000. The cost to rebuild is 300,000 (you pay some for the land, often times what you are insured for is less than what the house and the land are worth). Your deductible is 100,000.

I don't understand how you can have a 33% deductible? The deductibles I have seen are 10-15%. You are correct that you have to take the land cost out of the equation. Unless you live on/near a steep slope the land value shouldn't change all that much after an earthquake.

There's a ton of loopholes so they can get out of it.

Where did you get this information? If there is a major earthquake there shouldn't be any argument over what caused the damage to your house. They do exclude exterior masonry structures (chimneys) and stucco.

You're really better off spending that money putting in structural supports in your home that will withstand an earthquake because earthquake insurance is a scam.

You should do that regardless. I had to bolt my 90 year old house to the foundation and install shear walls in the basement before Amica would even write me a policy. That will reduce but not eliminate damage due to an earthquake.

 

[OnlyDisney]

We have a 1974 1350sq split level in KY worth about $124,000. Insured through Farm Bureau with multi-line discounts.
Property Taxes $1021
Insurance $941

 

[havaneselover]

20 year old 2,200 square foot house in central VA worth about $350k. Of that the land is worth $90k. House was just reroofed (saving over $100/year). Premium is $636. I bundle with auto.

 

[bdcp]

So let's say there is an earthquake and your house is a total loss. You owe 350,000. The cost to rebuild is 300,000 (you pay some for the land, often times what you are insured for is less than what the house and the land are worth). Your deductible is 100,000. So you have no house, a mortgage for 350,000, a check from the insurance company for 200,000 that usually goes to the mortgage company, not you, and it will cost 100,000 to rebuild. Some people could get a loan for the 100k, but most people couldn't. So you paid all those years several extra thousand dollars a year for your insurance company to send 200k to your mortgage company. And that's IF they do cover it, because like I said, if the pipes burst, they won't consider that earthquake damage, it's flood and so on. There's a ton of loopholes so they can get out of it. They're like Insuracare in The Incredibles.

It's the exact same thing with flood insurance, except you can buy in to a government flood insurance program. I don't believe there is anything like that for earthquakes. You're really better off spending that money putting in structural supports in your home that will withstand an earthquake because earthquake insurance is a scam.

Who has a 100K deductible? Where'd you pull that from? Our deductible is not that high a percentage.

Do you or have you ever had homeowners insurance? I don't think you have an understanding of how it works.

First, your home is insured, not the land. Our home is worth 800K including the land. We are insured for what it should cost to rebuild the house. I'd have to read our policy to find our deductible.

The insurance money to rebuild your house goes to the builder, while it may have (probably actually) to be cosigned by the mortgage co since they own the house, they do not get the money. For our new roof, the insurance co issued the first check (1/3 of the cost) to us and the mort. co. We sent it to our mort co who signed it and sent it to us. We signed and deposited it and paid the roof company. The rest of the payment, paid out once the roof was done was sent to us. We then turned around, and signed it over to the roofer. The mortgage co at no time had possesion of the money. Our deductible was 1K and we didn't even pay that. It was figured into the cost of the roof.

Do you know anyone who has lost their home to a fire? The people I know have completely rebuilt without going into further debt unless they decided up upgrade/make major changes to the house.

 

[disneysmyhappyplace]

Who has a 100K deductible? Where'd you pull that from? Our deductible is not that high a percentage. Do you or have you ever had homeowners insurance? I don't think you have an understanding of how it works. First, your home is insured, not the land. Our home is worth 800K including the land. We are insured for what it should cost to rebuild the house. I'd have to read our policy to find our deductible. The insurance money to rebuild your house goes to the builder, while it may have (probably actually) to be cosigned by the mortgage co since they own the house, they do not get the money. For our new roof, the insurance co issued the first check (1/3 of the cost) to us and the mort. co. We sent it to our mort co who signed it and sent it to us. We signed and deposited it and paid the roof company. The rest of the payment, paid out once the roof was done was sent to us. We then turned around, and signed it over to the roofer. The mortgage co at no time had possesion of the money. Our deductible was 1K and we didn't even pay that. It was figured into the cost of the roof. Do you know anyone who has lost their home to a fire? The people I know have completely rebuilt without going into further debt unless they decided up upgrade/make major changes to the house.

Our policy only has a $250 deductible and we pay $1000 per year for a 2000 square foot home in upstate NY. I agree with you that I have never heard of 100k deductible before? We had hail damage to our roof as well and the insurance company wrote a check out to us after inspection and we only had to pay $1 out of pocket for a new roof they covered the rest

 

[Gr8t Fan]

I agree with you that I have never heard of 100k deductible before? We had hail damage to our roof as well and the insurance company wrote a check out to us after inspection and we only had to pay $1 out of pocket for a new roof they covered the rest

They're specifically referring to earthquake coverage which has very high deductibles and very specific exclusions.

 

[scrapquitler]

I pay $333 annually for a 1300 sq ft, 42 year old house worth around $240K in Portland, OR through State Farm with a multi-line discount. Seeing what others pay makes me realize that I really can't complain. Now, property taxes are another story. Not sure what others are paying but my last annual tax bill was $2,400. But I guess that's offset a bit by not having any sales tax.

I"m in CT, and my house is worth about the same as yours and about the same size, it was built in 1958. We pay $1400 for homeowners insurance, and $4700 in property taxes (and sales tax here is 6.375%).