Author Topic: Finding good homeowner's insurance?  (Read 3660 times)

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Finding good homeowner's insurance?
« on: March 11, 2013, 04:03:22 PM »
I'm having a problem with the agent for my current insurance company.  I have a property (house + land) that, in the current market, is valued at roughly $250-300K.  The mortgage balance is well under $120K.  Most of the value of the property is in the land; the house is a '60s-vintage ranch, and wasn't of terribly high quality even when new.  I could replace it (with something more to my taste, too), or buy an equivalent house on a smaller & not-so-nice lot, for under $100K.

The insurance agent jacked the valuation on my policy from the previous $125K (I think even that was over-insuring) to $180K.  When I discovered it (thanks to the mortgage company sending me a letter requiring increased flood insurance to match the over-valuation), the response was a bit of bluster, and an offer to reduce coverage to $155K.

I'd appreciate suggestions for finding (with minimum hassle, and preferrably one I can deal with on-line) an insurance company that will provide reasonable coverage.

babysteps

  • Stubble
  • **
  • Posts: 119
  • Location: Southern Tier NY State
Re: Finding good homeowner's insurance?
« Reply #1 on: March 12, 2013, 09:42:35 AM »
Hopefully others will have a company/companies to suggest.

Our experience (with multiple companies & agents) is that you have to read all insurance policy "declarations" very carefully, and then be clear & assertive (including threatening/actually moving your coverage) about what coverage you do or don't want.

We recently consolidated both cars (I know, insert face punch for 2 cars, apologies, at least we own them free & clear) to a single policy, and had a few back-and-forths thanks to sloppy work from our agent (they hadn't filled in the location where the car is garaged, so the insurer had quoted/charged the maximum coverage for anywhere in the country - there were a few other items too, all resolved now).  If we hadn't bothered to ask & read the details, we would be overpaying for our coverage.

We have had some luck in finding local insurance cooperatives for homeowners & investor property policies, *but* what you gain in pricing and coverage, you may lose in billing accuracy (they are happy to fix errors, but you name it, it has happened - payment credited to wrong policy, double payment on auto-pay, no payment & late fee on auto-pay, double billing, no billing...).

Also, be aware that if you switch homeowners insurance companies, most are now doing at least drive-by inspections on new policies (especially if you are in a lower-cost neighborhood, based on our experience) and will likely send you a letter saying you have 60 days to fix x, y & z or they will cancel the policy.  These are generally things that *could* be done, but that haven't really been things you think you *need* to do right away (patching the safe but cosmetically imperfect concrete front steps, for example). 

*So* if you find a new insurer, and if your house isn't newly renovated or fully upper-middle-class-standards maintained, you may wish to not cancel your old insurance until you are 60 or 90 days into your new insurance.  Just  in case.  You can often get a refund on the first policy (if you call in May and cancel as of March, for example). 

This inspection practice seems to have become more common in the last 2 years (not sure if it's some new regulation, or just shift in industry practice).  One property that changed ownership but that we continued to manage, using the same insurer but a new policy for the new owner, we had to limb a tree and replace part of the roof (which was worn but still weather proof).

Daley

  • Magnum Stache
  • ******
  • Posts: 3955
  • Location: Cow country. Moo.
  • Got that mustache feeling.
Re: Finding good homeowner's insurance?
« Reply #2 on: March 12, 2013, 09:57:11 AM »
Best advice I've found is to deal with member-owned insurance companies... outfits like USAA, Farm Bureau, various insurance co-ops, etc. The premiums will be a bit higher, but what you lose in monthly premium costs you'll gain in flexibility, control over your policies, customer service and payout if the policy is ever called upon for use, etc.

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Finding good homeowner's insurance?
« Reply #3 on: March 12, 2013, 10:40:32 AM »
When I exited a state that was infamous for pissing off insurers (and many of them simply boycotted the state) and came to Colorado, I had my pick of insurers for once.  Since I am not eligible for USAA membership, I signed up with Amica which has a longstanding reputation for excellent policyholder service, is a mutual, financially strong, and if you take their dividend policies is competitive with others.  I have had to file a claim (never done it before in 15 years of homeownership) for hail damage and they were great.  Fast adjusting, coughed up enough money to do the job right, and minimal hassles.

RewardTraveler

  • 5 O'Clock Shadow
  • *
  • Posts: 27
Re: Finding good homeowner's insurance?
« Reply #4 on: March 12, 2013, 12:49:13 PM »
USAA probably isn't what you're looking for.  They have very strict policy standards and require the policy to cover more than 100% of their rebuild value (I want to say 110%), which typically comes out to 25% or so above market value for the entire property.

brewer12345

  • Handlebar Stache
  • *****
  • Posts: 1386
Re: Finding good homeowner's insurance?
« Reply #5 on: March 12, 2013, 01:22:20 PM »
USAA probably isn't what you're looking for.  They have very strict policy standards and require the policy to cover more than 100% of their rebuild value (I want to say 110%), which typically comes out to 25% or so above market value for the entire property.

There are actually good reasons for rquiring such coverage.  After a major catastrophe there are lots of people trying to rebuild at once.  Guess what happens?  Prices spike.  What was an excessive amount of coverage to rebuild might suddenly be barely adequate.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Finding good homeowner's insurance?
« Reply #6 on: March 12, 2013, 01:50:42 PM »
USAA probably isn't what you're looking for.  They have very strict policy standards and require the policy to cover more than 100% of their rebuild value (I want to say 110%), which typically comes out to 25% or so above market value for the entire property.

Yeah, that's exactly where my problem starts: the current company is basing the coverage on market value of the property, rather than replacement value of the house.  Then you factor in the fact that the sort of house I'd actually like would cost significantly less than the replacement cost...  Well, in all honesty, I'll admit to being somewhat disappointed when I came back after the big fire last year, and found the place still standing.  If it was insured for $180K, I'd be so tempted to arrange a minor electrical fault.

babysteps

  • Stubble
  • **
  • Posts: 119
  • Location: Southern Tier NY State
Re: Finding good homeowner's insurance?
« Reply #7 on: March 13, 2013, 04:03:43 PM »
Different insurers definitely have different internal standards for the minimum policy they will write. 

Ask around - it's a financial product, there is probably some insurer that would be willing to write the policy for amount owed on loan as the minimum coverage.  In our experience, even insurers who are willing (when pressed) to write lower coverage amounts have a habit of a periodic desktop coverage/price escalation that you have to call up to change if you don't want more coverage.

Probably doesn't mean 100% though, especially in areas with fewer insurers.

Good luck!