My house insurance rates jumped 45% this year!

 

  I just got our statement from Allstate for our home insurance annual
renewal, and noticed the rates had gone up a LOT.  45% from last year, to be
exact.

  I haven't changed anything, but I did notice that they mentioned something
about adjusting coverages upwards to take inflation into account as the
reason.  Supposedly there is some Federal law that allows them to do that as
a "benefit" so that the insurance coverage isn't eaten into by inflation.

  I thought about this a bit, and then realized that while they presented
this as a benefit for us, it of course really benefits them.  Rather than
your coverage and payment staying the same from year to year, and them
agreeing not to mess with it without your say-so, they have an automatic
reason to increase things on you every year, then mention inflation as an
excuse.

  However, I've realized that inflation really isn't an excuse, especially
this year.  Over the past year, average home valuations in our area have
dropped about 5% - not gone up as they allege.  Besides, they increased the
coverage only 2%, yet raised my rates 45% at the same time, with no reason
given.

  Another aspect I've noticed is that we may be overinsured.  Other similar
doubles in the area have been selling for about $60,000 over the past year
and a half. (I just checked)  However, they have our place insured for
$92K - almost 50% more than we need.  If this place burned down or
something, we would just buy a similar place nearby, not rebuild.  As such,
it seems rather silly to have insurance far above what we would need.

  Under "other structures", they have gone ahead and insured a wooden shed I
got for free and paid $150 to have hauled here.  It is insured for $9,200,
with $1,000 deductible.  Again, that seems silly, because the deductible is
more than I would pay for a replacement, if I even bothered.

  They also have us down for $64K of personal property protection.  However,
I'm pretty sure that the grand total of all of our possessions is more like
$4,000.  Most of what we have we've gotten for free from friends or family,
or else gotten ridiculously cheap at estate sales, yard sales or thrift
stores.

  Anyway, to make a long story short, a 45% jump in my rate from one year to
the next is very unacceptable to me.  My payment is due by Sept. 11, but I'm
wondering if instead of just paying it I should send them a letter demanding
a better rate if they want to keep my auto insurance and home insurance
business?

  If I do so, I think the letter would mention that the rate increase is
unacceptable, especially since the excuse given was inflation, even though
home values in the area have gone down in the past year.

  Do you think it would be fair, or successful, to tell them that if they
want to keep my business, they need to send me a rate that is comparable to
last year's?  I know that they make very little $ on the home insurance, but
perhaps if I threaten to take my car insurance elsewhere, they might be
willing. (they make the majority of their profits on car insurance)

  Thoughts anyone?  What do you do when you get an unexpected, and seemingly
unjustified increase on a big bill on the order of 45%?  Have you been able
to successfully fight it?

 



Shop around with competitors for a lower rate. If you find a lower rate,
mention it in your letter. If you find that All State's new rate matches
its competitors' quotes, then you will be wasting your time complaining
to All State.


Only if you can find a lower rate elsewhere.

 



OhioGuy wrote:

Yea, that should work. Tell them you are mad as hell and you won't
take it any more.
No question that a 45% increase seems out of line. As usual, you don't
provide any detail. Where did it go from and to? Perhaps you have been
underrated for past years. Maybe you owe them money! Right. Like you
would be willing to cough anything up. You are starting from now.
Check competitive rates and go from there.

Insurance companies have rate structures generally approved by the
state. There are categories and sometimes those categories include so
much for out-buildings and so much for personal items. If they don't
offer a category for "I have nothing", you have to take what's on the
menu. Also, the insurance company doesn't give a dam what homes sell
for on your block if they are going to be forced to rebuild your home.
Those construction costs have gone up. These costs are stated as a
function of published indexes that should be referenced right on your
policy statement. Again, probably not 45% in a year, but we don't have
any numbers to work with here. There are sometimes options to pay for
the new construction at only the existing old code when the building
was constructed with you paying for any needed upgrades. There are
sometimes policies that only pay the damage up to the market value.
This latter is what you sound like you want. Ask if it is available.
It may or may not be in your state.

In short, you have done none of the homework yourself. Hope you teach
your kids differently.

 

No kidding.

Al Bundy wrote:

 

  Well, I was more focused on the 45% increase, and the fact that somebody
increased the insurance coverage amounts without my say so.  I want things
set in stone until/unless I give then notice in writing that I want to
change something.

  Anyway, last year was the first year I added the home insurance.  The cost
went from $272 last year to $395 this year, an overall increase of $123.  I
was expecting the amount to stay fairly level for at least a few years.
There was nothing in the print about the price last year being an
"introductory rate", or anything like that.

  Especially this year, with food and gas costs having gone up, I've been
focused on holding repeat costs down.

  There are 2 things that sort of bug me about this:

1) It is just short of $400 by $5.  It is almost like they did a study to
see how high they could raise the rates, yet still be under $400, because
some study told them that people would go hunting if it was $400 or more.

2) They just sent us a rebate check of about $15 for being "safe drivers",
only 4 days before we got the bill for the rate increase.  It seems like the
satisfaction from getting a small, unexpected check was supposed to somehow
counteract the unhappiness of the large rate increase on our other
insurance.  HELLOOO!  We just want the lowest possible rates, not gimmicks.