home insurance rates

[lizzie]

We pay $1457/year for home insurance from State Farm. After hanging around MMM for awhile, I had the impression that this was pretty high, so I did a little shopping around. All of the quotes are in the $2500-$3000/year range! (This makes me wonder if we're underinsured, frankly, but let's just set that aside for now.) So far I've gotten quotes from Farmers, Liberty Mutual, Progressive, and Safeco.

A few details about our house:
Built in 1914
1 full bath 1 three-quarters bath
3 or 4 bedrooms (depending on how you count)
2.5 stories
basement
no garage
radiator/gas heat
fireplace
roof 25+ years old
no idea when electrical or plumbing was last updated
lived here since 1999
no sprinkler system or burglar alarms

We're on a fairly small city lot in Minneapolis. I believe our house's market value is around $350k, based on what similar houses in our neighborhood have sold for recently.

Am I doing something wrong, or should I just be happy with the premium I'm currently paying?

TIA for any insights. Sorry if there are threads I should've looked at first; I searched and couldn't really find what I was looking for.

[Shade00]

It's possible you're overinsured. The value of $350k may in fact be for the home and the land - but think about it this way - if the house burned down, the insurance would pay to replace the house, because the land wouldn't be affected. So you might consider having a new appraisal to find out what the replacement cost for your home would be and insure for that amount. I have been vastly overinsured in my home for several years now and only recently came to this realization. Of course, my insurance company has been happy to take my premiums and continue to raise my coverage and premiums every year due to 'inflation of building supplies.' I am aggressively shopping and plan to switch insurance ASAP.

[iluvzbeach]

We are also with State Farm, have been forever, and we recently got renewal info and our annual premium jumped to a shocking $2,143. That got me to do some shopping around and I called Amica Insurance (a company I'd never heard of before, but saw they were rated highest on Consumer Reports) and found their rates to be awesome - I promise I don't work for them or have any relation, just sharing my experience. Other providers were quite high, much like what you found. Definitely make sure you aren't over or under insured and that you compare apples to apples across policies from the various companies. Also, if you can, make sure to include quotes on your vehicles as multi line discounts tend to be significant.

[woodnut]

The thing that jumps out at me is the 25+ yr old roof.  I'm not familiar with Minnesota but in my area of Colorado, that old of a roof would drive rates really high.  You might inquire to your insurance company what the rate would be if you replaced the roof.  Also what is your deductible?  Can you raise it to lower your rate?  For reference, I'm paying $285 per year on a $250k house, with a $5000 deductible, and $300k liability, and a brand new roof.  It would be close to $1000 with an old roof.

[JLee]

The thing that jumps out at me is the 25+ yr old roof.  I'm not familiar with Minnesota but in my area of Colorado, that old of a roof would drive rates really high.  You might inquire to your insurance company what the rate would be if you replaced the roof.  Also what is your deductible?  Can you raise it to lower your rate?  For reference, I'm paying $285 per year on a $250k house, with a $5000 deductible, and $300k liability, and a brand new roof.  It would be close to $1000 with an old roof.

Wow, that's cheap. I'm at $880/yr for a $150k house with a 5-10yo roof.

[ShoulderThingThatGoesUp]

Have you had a claim recently? That's what drives up my rates.

My house is also from the 1910s and its structural walls are brick. That seems to substantially drive up the replacement cost, which is what you're insuring against. I know I could get an equivalent house built for $200k or under, but they always calculate replacement near $300k.

[lizzie]

Thanks for all the responses! Lots of variables to figure out.  We are insured up to $271K on the dwelling, which seems a little low for replacement cost, or at any rate not too high. Our deductible is $1K, and we could definitely go higher there. We also have $300K personal-liability coverage, which seems a bit much but I guess it's great to have if you need it?

We've never made a claim, as far as I can remember, so that shouldn't be affecting the premium.  I'll have to play around with some of these deductibles/coverages to see if it gets much cheaper.  We also have our car insurance with State Farm, and our most recent premium notice says that we're getting a $663 home/auto discount and a $474 claim-record discount. I guess that explains why all the quotes I got were so much higher!

That's interesting that an old roof can affect the premium--I had never heard that before. We're planning on downsizing in about 9-10 years, and I've kind of emotionally disengaged from this house (I've never liked it as much as our first house). So I'm sort of disinclined to invest a bunch of money in it. Frankly if the house burned down I'd just gladly take the money and buy a different house, I wouldn't want to rebuild on this lot (it has a steep incline down to the sidewalk that's very annoying to mow). But if we'd have to replace the roof anyway before we can sell, it might be worth doing sooner rather than later for the insurance savings. Thanks again to everyone for your help and insights!