Member
Our policy prorate a roof replacement.
In 2008 what was left of a hurricane blew through Cincinnati. My agent told me he thinks we were the only people not get a new roof. I just had my roof replaced like a month or two before. Said after the hurricane, roofs are now prorated.
"Remember back in the day, when things were made by hand, and people took pride in their work?"
- Rick Dale
Member
Former insurance agent here.
1> Once you buy a "replacement cost" policy and it's issued, you have replacement cost. However, hail, especially in my market, is an immense issue. So, before issuing a policy, the underwriter's are simply making sure they're not picking up a turd, based on roof age, and will generally want the agent to provide pictures to establish things are in good order. They can reconsider issuing a policy by altering the terms by adding a rider or specific exclusion for said losses for a given policy until evidence of replacement of questionable siding/roofing is given. They may even non-renew the following year if certain issues are not resolved by the policyholder.
2> Most companies began asking roof age decades ago, and some even tracked this age from last hail claim they paid, if client has been with them that long. Once you hit 10 years, they automatically put an ACV (actual cash value) rider in place for roof damage to control the issue. Not all, but some, and this is from decades ago. Some assign a separate deductible strictly for hail. Read your policy thoroughly so you know ahead of time what you can expect when said losses occur.
3> I would pull back on the "contractor has the incentive to over assess the damages" argument. The adjustor does too. Smaller companies that do not have an in-house adjustor team simply farm out to independents. Especially after a major event - they just don't have the staff to handle the rush of claims, even the larger carriers and yes, they sometimes have no choice but to take the word of the contractor, as there just aren't enough minions to micromanage each claim. In fact, why pay the adjustor when the contractor's bill is what dictates final payout for these claims.
As for those independent adjustors, guess what? Many, if not most, get paid a percentage of the claim = major incentive to overpay. I saw adjustors paying for things way outside the policy accommodations, in fact, flat out excluded in the policy, but the company basically said "whatever" when I expressed my concerns. They were doing what they felt was best for the client at the time. Then, at the end of the year, said company would scold the agency, based on excessive losses, cut commissions/bonuses accordingly, and in the worst case scenarios, put a moratorium on new policies written by that agency for the following year until the loss ratios came back into acceptable levels. That is very crippling to an agency, especially in a hail prone market where carriers are hard to come by. Tough to be told to stop producing, when that's your job.
Here's the crux of the whole issue:
Toughest thing for the insurance carriers is maintaining the clear distinction that an insurance policy is not a home maintenance contract.
Based on the frequency and severity of hail damage in many markets, they circumstantially are stuck in this position, as most roofs are hailed out again before the 10 year ACV clause can kick in, = no one ever replaces their roof as an act of periodic maintenance, paying out of pocket. Not in this market.
Bottom line: read your policy contract. They all have the right and frequently do adjust the terms in order to cope with these unique, recurring losses.
They also have the right to pull out of high loss areas or states entirely if they cannot establish the ability to cover all losses, pay all the bills and salaries and make money in the process. They are a business just like anyone else, despite being highly reviled and openly ripped on and ripped off by the public, contractors, and even their own appointed adjustors. Still amazed at the paintless dent repair shops with billboards claiming "we'll waive your deductible". BS - they are flat out over-pricing the repairs to cover the deductible for the client. But hey, everybody hates insurance, so it is completely, socially/societally acceptable to lie to the insurance company. I saw it on a billboard.
It is a thankless, high pressure business that I am very happy to have left years ago to become a woodworker.
Moderator
Here's the crux of the whole issue:
Toughest thing for the insurance carriers is maintaining the clear distinction that an insurance policy is not a home maintenance contract.
^^ THIS is spot on.
--
The most expensive tool is the one you buy "cheaply" and often...
[OP]
Contributor
Jeff, thanks. Really informative. Brian
Contributor
Fascinating, Jeff. Thanks for the info.
Living in Florida, it's a total nightmare here with massive numbers of roof claims, lawsuits everywhere, and insurance companies not paying for damages, many companies leaving or having left the state.
Not fun. Not fun at all.
- After I ask a stranger if I can pet their dog and they say yes, I like to respond, "I'll keep that in mind" and walk off
- It's above my pay grade. Mongo only pawn in game of life.
Contributor
If it were me in Florida, I would be working on moving out.Originally Posted by Alan Lightstone
Crazy stuff is starting to happen and with the ocean water temperature getting higher that doesn't bode well when the hurricanes start coming.
jtk
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill (1874-1965)
Contributor
I heard a report on NPR this week about the home insurance industry data showing a national average if 21% increase in premiums and 40% in Florida. This driving many insurers and homeowners out of high risk states like FL and CA.
< insert spurious quote here >
Contributor
Wish mine had only increased the "average amount".
With no claims filed in 30 years (and that one was for theft) I still got hit with a 50% increase. And that was also with a relatively new roof (2018) and no liability features such as living in a flood zone or high fire risk, no pool (unusual in low desert AZ), or dog of certain breeds, or a bunch of mature trees near the house, or the house used for anything other than normal living.
Just a vanilla homeowners policy.... and yet, a 50% increase.
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
Your lack of risk is how insurance companies can cover you and people with medium to high risk. When a wild fire or flood takes out homes, the homes that were lost have only paid a part of the cost. The buffer comes from the no to low risk policy holders.
What is taking place now is more areas are becoming higher risks to insure. The only thing insurance backers can do is raise rates everywhere, a lot more in the danger zones and less in the safer areas. They can also back out of insuring anyone in the worst danger zones like California & Florida. Insurance companies are in the business of protecting people against property loss. Their first priority is to make money while providing this service.
jtk
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill (1874-1965)
Contributor
Agree and with the risk from severe weather increasing, rates will continue to climb until the risk declines which I don't think will happen in our lifetime. The worst is yet to come, buckle up. This is one case where being 74 years old is better than 47.
Contributor
Many homeowners in my area refuse to replace their roof until they absolutely have to replace it due to leaks. They are holding out for a "free" roof due to hail damage.
I've had Liberty Mutual since moving to Arkansas. Prior employer had a discount with them and when I moved, they were best quote. Zero issues on my first house here for 6 years. Moved out to the woods and continued coverage through them. Full replacement coverage. As a result, every year rates go up slightly and the coverage amount goes up as values continue to rise. Not quite enough value increase vs what I could potentially sell for, but I'm not insuring the land portion. We are in a hail damage area. I've had an average of 5 to 6 storm with hail every year (now on year 7 on this house). And after most of the storms, I've received email from LM to inspect and if I have damage to file a claim. Well, last spring we had baseball or larger hailstorm that woke us up out of a dead sleep. Sounded like hammering on the roof. And so, Pickup truck and house had hail damage. Truck adjuster came out first, took 30 minutes of pictures and they sent me a check for the damage value. It's paid for, so it paid the house deductable plus a few hundred in the bank.
I let LM select the company to repair as I've not used a roofer up here. Was still shortages on materials, but they replaced the house and shop roof (architectural shingles on house and free upgrade on shop) Replace all the COPPER gutters on house and chimney cover, and and the aluminum gutters on the shop. $37,000 in repairs. 6 months to get the copper gutters. Oh, included my open shed roof which had corrugated asphalt roofing. (no damage on the 3 year old roof but they replaced anyway). Yes, my insurance went up a bit, (value went up again) but increase will take them 20 years to make up the repair.
I Cannot complain about the emu.
Woodworking, Old Tools and Shooting
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Jet JWS18, bandsaw Carbide Create CNC, RIA 22TCM 1911s and others
Contributor
When I first started shopping around after the notice of increase I looked at the "big players" and they were about the same as my projected increase, so I didn't even consider LiMu.
Looks like Doug and the Emu may save me a couple hundred.
Thanks for posting your "emu" experience
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
Contributor
5 insurance companies have pulled out of California recently and I just got my renewal policy—up 50%. And no claims. Damn.
Contributor
I just recently got a Homeowners ins. quote from LiMu ...saves me about $300.
So....dropping USAA and goin' with Emu (only for home)...changing to LiMu car insurance would wipe out that $300 savings
"What you see and what you hear depends a great deal on where you are standing.
It also depends on what sort of person you are.”
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