Homeowners Insurance Renewal…Yuck!

I received our homeowner’s insurance renewal this afternoon. Our new annual premium is…


Yes, I realize that we live on the Gulf Coast and that our area has been hit with two hurricanes in 3 years. But…we have never filed a claim. Never.

Looking through our old insurance renewals, I noticed a trend:

2005 – $1,430
2006 – $1,528 (6.9% increase and this was a year after Hurricane Rita)
2007 – $1,655 (8.3% increase)
2008 – $1,725 (4.2% increase)
2009 – $2,072 (20.1% increase!!!!!!!!!!!!!!!!!!!!!!!!)

And, that premium includes a couple of discounts. Now, along with those increases there were increases in the limits of liability, which is $228,000 for our home. We also have a 2% deductible for our dwelling.

It also didn’t help that we had the mold fiasco of the early part of this decade. People were getting their entire homes gutted and re-done and their insurance companies were footing the bill. Talk about a scam!

I put in a call to our insurance agent to see if some adjusting can be done. I’m not optimistic.

How much are you paying for homeowner’s insurance? What does it cover? What is your deductible?

33 thoughts on “Homeowners Insurance Renewal…Yuck!”

  1. We’re currently paying $475 for a $220,000 limit and a $1,000 deductible however, we have a brand new home and are not in a coastal area (Central Virginia).

    Being in a coastal area will definitely impact your premium as will which state you are in as regulations and rates vary state by state. Just look at the variations in the average auto insurance premiums in each state.

    If you haven’t recently shopped around for alternate quotes, you may want to do that whether with your current agent (if they have access to more than one carrier) or a new agent all together.

    Additionally, having multiple policies with one carrier (Home & Auto &/or Umbrella &/or Life) will often result in additional credits (5-15% in most cases).

  2. I live in South Florida, and I believe we pay the most in terms of homeowners insurance. My premium which includes windstorm and flood is $3200.

  3. We pay $424 year (just renewed) on $175k homestead with 1% deductible in central TX (with auto discount).

    I’m glad the coastal guys are now paying their share (sorry JLP) because my rates had shot up to near $900 due to all the claims from people living on the TX coast. Hurricanes don’t make it to where I live.

    We went through these guys for our policies:

  4. LOL,

    I don’t live ON the coast. I live 40 miles from the coast.

    The whole purpose of insurance is to spread the risk.

  5. LOL,

    Also, based on your argument, I should have lower rates because I have lived in my house for nearly 10 years and have NEVER filed a claim. Why should I pay more just because I live in a certain area even though I have never filed a claim? It’s the same argument you are making.

  6. Odd that you would like to ‘spread the risk’, when it comes to your higher HO insurance premium and make others pay the same as you even though you are in a higher risk area then certain others, but spreading the cost of health insurance for people to get medical treatment who otherwise would go without is bad and the downfall of our system. I’m confused. I guess you only care about ‘what’s in your wallet’.

  7. I find it’s better to just pay for everything in cash, and put what you would have put towards insurance premiums into an emergency fund. This goes for houses, cars, etc…

    Insurance is a rip off. Not only are you paying for the actual “insurance” but you are also paying for all if the insurance companies employees and overhead, all the fraudulent claims filed by others, and also all the profits the company makes including the million dollar salaries and other perks for the executives.

    Of course, it takes discipline to do this and you can’t do it while having a loan.

  8. Seamus,

    I’m not talking about giving property insurance to people who can’t afford it. I’m talking about dividing risk up evenly, which is supposed to be the purpose of property insurance.

    Think about it…

    over the entire United States, there’s plenty of risk. From tornados in the midwest to earthquakes, forest fires, hurricanes, flooding, volcanoes, etc.

    Yes, living on the beach is more risky than living inland. But, I don’t live on the beach. Nor have I ever filed a property insurance claim.

  9. JLP: If you haven’t filed a claim in 10 years, then I expect your roof to be at least that old? I suspect your rates are higher particularly because of that. If you’ve replaced it “out-of-pocket”, make sure your insurer knows the date that happened (might get a nice discount). So — not filing a claim is actually costing you more in insurance now (at least if I was an adjuster, I’d see it that way — the odds of you needing a roof soon are going up very quickly).

    As for ‘spreading the risk’: Texas is a massive state — and I don’t particularly think I should share equally in your risk-profile because some arbitrary line doesn’t separate us. I’m sure you pay 5x the insurance rates because your location is 5x riskier than mine (no hurricanes here). I suspect someone ‘right on the coast’ to be paying 5x more than you…. (though I don’t know someone to confirm with) — especially for the flood insurance (which I don’t need in a desert).

    Seamus: Amen brother.

  10. I live in New Orleans – – Orleans Parish to be more specific. Never flooded; Never had a claim against my homeowner’s policy. Yes, you read that correctly: no Katrina claim. I have been with same homeowner’s insurer since 2000.

    I pay over a $5,000 premium for my homeowner’s insurance. I have my house valued at under $200,000 (just the structure, i.e, excluding the land value).

    If I moved to Baton Rouge, my premium would drop by more than half.

  11. You think that’s bad, try living near a creek in the san francisco bay area! Higher property values + possible water damage risk (though we are outside of FEMA’s official floodplain) + earthquake risk = $ridiculousness.

  12. $410k dwelling coverage, $82k other structures, $287k personal property, $82k loss of use – $500 deductible – $696 annual premium – I live in the NC Piedmont

    Rates definitely vary from state to state – we paid $1400 annually (w/$1000 deductible) for our $150k house in Memphis. NC is a very low insurance state – our car insurance dropped considerably as well when we moved.

  13. JLP: I’ve paid my share. Mine started at $250, went as high as $950, and is now at $424. Granted, we’ve gone through at least 4 different insurance companies in 10 years. Maybe that is the key — keep switching to keep them competing 🙂 I switch car insurance companies often as well: I just left Geico after only 3 months — specifically for the deal on the home owners — about a 30% savings.

    Seriously try that link I gave you above. I’m not affiliated with them, but they were recommended to me by a friend. I have no idea how they compare to other companies as far as ‘service’ and other such things go.

  14. I live in tornado country, and I would say from the perspective of an insurance company, tornadoes are way less risky than hurricanes. Sure a tornado takes out a few houses and damages some more. When a hurricane hits, lots of places take damage, flood, etc.

    It would be the rare tornado that outpaced the (equally rare) hurricane for damage.

  15. I’m gasping for air, reading your post. I have not received our bill yet this year, but last year I paid $481 – with $300k in coverage and a $500 deductible.

  16. The funny things is that if a hurricane comes through and destroys everything, the insurance company will file for bankruptcy and you’ll get nothing. Insurance….what a scam!

  17. “Why should I pay more just because I live in a certain area even though I have never filed a claim?”

    Because the area you live in has higher risk. Or maybe cause your insurance company is gouging you and you haven’t shopped around.

    Texas, Florida and Louisiana have the 3 highest rates for insurance.

  18. JLP,

    I’m hearing that the Eastern seaboard and Florida have seen similar increases because of the hurricane threat. Some insurance firms have pulled out of certain markets. However, it’s also reported that insurance companies spread the risk throughout the world, so rates go up somewhat even in low-risk areas when another area gets hammered often, like the Gulf Coast.

  19. You can add the Alabama Gulf Coast to the list of highest rates. Our company just dropped our wind and hail coverage, to cover basically only fire now, and still increased our rates to around $2000 for a $200,000 house. We had to find another small company (there are only 2 small companies that I know of who will insure the area) at an additional increase. We have lived in the same area for 9 years, never filed a claim, built a new house in 2007 under new, stricter building codes which were designed with insurance in mind, were told we would be fine since we spent the thousands of extra dollars on hurricane straps, window coverings, and other things stipulated under the new codes, and we were still dropped and rates increased. We also live 30-40 miles from the coast, not in a flood plane. A lot of the money spent included in those figures spent by the insurance companies after hurricanes include figures for flood which is an additional cost. Regular insurance does not cover flooding.

  20. The other night there was a local newstory about homeowner’s insurance premiums going up in our area. HOWEVER, they said the average increase was 10% – 12%…NOT 20.1%!

  21. The same thing has been happening to us. I can’t give you all the details because my wife handles all of that but she told me last week about how it is going up again.

  22. Hi. My escrow account just sent me a notice saying my mortgage payment will increase and the line-item breakdown indicates that my “hazard insurance” went up by over $200/month last year (2009).

    This is maybe $200k of insurance for a $155k house purchased 7 years ago in Columbus, OH and maybe 500-100 deductible, never a claim. (Can’t remember the exact amounts but will look it up when I get home.)

    Well, the insurance co. says that this was actually the two-year annual rate increase, b/c my rate had not increased the previous year, i.e. each year the rate went up by $113. I accepted that as standard until I asked my coworker and he said his insurance doesn’t go up every year. He of course lives in the same metro area that I do, but his house is newer. Mine is 1928 and closer to the city.

    Any tips?

  23. Oops, I meant to say that my hazard insurance went up by over $200/YEAR last year, not by over $200/mo. (that would be for living on the moon, where there are major hazards), LOL.

  24. Funny how these morons like to claim $105 billion in damages from Katrina. Ask the homeowners insurance companies how much of that they paid. FLOOD INSURANCE covered most of the losses in Katrina because piece of crap insurance companies cover hurricanes, but not floods CAUSED by hurricanes. You got that? Be careful because just because you are covered for fire doesn’t mean you will get paid. If a candle caused the fire, you better buy candle insurance!

  25. Insurance rates are rediculous, period. I don’t care where you live, something could always happen. Yes, we are more at risk where I live in Mid City of New Orleans:

    Prem. in 2002: $1700.00
    2004: $1800.00
    2005: $1850.00
    2006-08 Under construction
    2008-09 $2700.00
    2010 $3100.00

    Granted, the house only flooded ONCE in 100 YEARS.

    Personally, I think the risk belongs to all of us. We would all pay less if we had the risk spread out over the US. But, this will never happen because of BIG INSURANCE COMPANY CROOKS!






  26. Susan,

    Can you tell me who your provider is? I’m in the process of buying a home (that didn’t flood but is in a flood zone) in the marigny and the lowest I have found is $3400. It’s an older home so that may be part of the problem. Also, have you looked into having a wind inspection to reduce your rate?


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