Home Insurers Are Charging More and Insuring Less

[dalton99a]

https://www.wsj.com/articles/home-insurers-are-charging-more-and-insuring-less-9e948113
https://archive.ph/tNpz2

Home Insurers Are Charging More and Insuring Less
Industry tries to rebound from years of losses owing to storms, fires and inflation
By Jean Eaglesham
July 30, 2023 5:30 am ET

Double-digit premium hikes. Higher deductibles. New coverage limits. Drones to check the state of roofs and yards.

Home insurers are insuring less and charging more as they try to claw their way back to profitability after losing money in five of the past six years, analysts and insurance agents say.

“We’re seeing moves to put more of the risk back onto the homeowner, tougher underwriting restrictions and big rate increases,” said Lauren Menuey, a managing director at independent agency Goosehead Insurance.

The higher-cost, lower-coverage trend extends well beyond Florida, California and other states prone to hurricanes, floods or wildfires, Menuey added. “I don’t think anywhere is safe from this right now,” she said.

Losses for home-insurance companies continued to pile up in the first six months of this year. Storms, natural disasters, inflation and supply-chain snafus have sent claims spiraling, leaving many insurers still in the red despite sharp increases to premiums.

...

[woodsprite]

1. So thankful we 'grandfathered' in to our

policy the previous owners had. The policy was written well over 35 years ago. It has a $250 deductible. State Farm looked at it when doing a comparison and told us to hold onto it for dear life and make sure all payments were either on time or early so they didn’t have reason to drop us. We’ve had to use it 2x - once during Sandy when a tree fell and took out a third of our house, and once when lightening struck and zapped anything plugged into our wired Ethernet.

[Rorey]

2. Lucky you

Everything has skyrocketed here. I have a couple of rental houses, and because both my property taxes and insurance have gone up so much, I'm going to be selling them over the next three or four years. People tell me to raise my rents, but the tenants are barely making it as it is.

[jimfields33]

3. I understand your dilemma

But those renters my be willing to add a little more rent then start over with first months rent and deposit and other expenses. Rents have gone up significantly.

[Rorey]

13. I just really, really, really hate being a landlord

It's very stressful because so many things can go wrong.

A few years ago a tenant died in a little rental house I owned, and she wasn't discovered for about 10 days. That was a scenario that hadn't even occurred to me that could happen. Two years after that event I sold that house. I just couldn't get myself past it.

[NickB79]

4. Even in "safe" areas, climate change will wreck insurance policies

If insurance companies that operate nationally get hammered in Florida and California from hurricanes and fires, they'll start increasing premiums on customers in the Midwest to keep profits up

[dalton99a]

5. +1. Safe areas will effectively subsidize high-risk areas

[Igel]

10. That's what insurance does.

With the proviso that insurers will usually group areas or cohorts to form risk pools to keep the subsidies from being too great--if they are, then some other insurance will partition the overall risk pool in a way to pick the low-hanging fruit and take away business.

[spooky3]

7. They have been doing this for years. Nt

[NickB79]

9. Now climate change is accelerating rapidly

And people are starting to take notice of bigger and bigger jumps.

[Think. Again.]

6. well, it's kind of dumb...

...to sell insurance when the world knows we're heading into climate chaos.

[Chainfire]

8. The purpose of insurers is to make money, not cover losses.

[Igel]

11. Both.

It's like saying that you're working to make money and not do your job.

[sinkingfeeling]

12. Yes, mine went up 11% this year.