Insurance sucks!

13 Replies

What are you guys paying for insurances?

I am looking at one insurance bill, just for one property and it's over $5000 a year.  That one I have a mortgage on with a $980 monthly payment and my insurance for that property is more than half the mortgage payment!

Granted, we have hurricanes down here, so we need a wind policy, a flood policy (depending how coastal you are) on top of everything else.  Are there other cities with comparable insurance?  In California do you need an additional seismic policy?  In the midwest is there a mandatory tornado policy or something similar?

Anyways, there is very little shopping around, as most agencies just come back from the same carrier CITIZENS, since many private insurance companies stopped issuing new policies in South Florida.  So going around to different agents you are still getting the same quotes with very minor variations.

Citizens is expensive and it could go sky rocket.  In their policy it says that if Citizens does not have sufficient financial resources to meet the obligations after a major hurricane all Citizens policy holders will be required to pay additional surcharges and assessments over and above their policy premium which could exceed 45% of the annual premium.  That means I don't need to have a storm hit me right I am at, it could be a storm that hit Daytona Beach and every Citizens policy holder will have to pay an assessment.  Hey how about if there is no storm you send us back some money?

Recently one of my properties I received a takeout policy letter, saying at the end of my current policy for that property another company (Heritage Insurance) will be assuming the policy from Citizens.  I assume this means there are more private market carriers willing to offer insurance down here now?  I wonder if I should shop for new policies for all my properties?  I know many have recommended safeco and foremost but last time I called around they were not issuing new policies but that was years ago.

Ugh, living in NOLA, I so feel your pain. Miami has the #1 highest insurance rates and NOLA is #2.

I did have my insurance with Citizen's when I first bought the house, but recently switched to Lloyd's of London. I used a local agent to find the best company/rates. I pay around $3K/year for a 2000 sq/ft duplex insured at $312K. It is also OO, so I have insurance for my own possessions included in that.

I have flood insurance also, but my house is raised and not in a flood zone per the new FEMA maps, so it is only $300/year.

Another option I looked at was to get dwelling insurance for the property...which doesn't include liability or possessions...and then get a separate policy(ies) for possessions and liability. I strongly recommend you check that out. I was finding much cheaper prices that way...even though it normally wouldn't make sense to separate out policies.

I think the magic of the separation is...when it comes to insurance in our areas...there are very few players and so rates stay high. But especially for liability insurance, there are lots of companies that will insure for that.

In the end, Lloyd's gave me a good price...comparatively speaking...for the whole bundle, so I do have the more typical HI policy with them that does include everything.

Insurance in Florida for properties requiring wind can be a cash flow killer. $5000 seems pretty steep but not sure how large your property is and its age including roof age.

What I always do for mortgaged properties whether through Citizens or another carrier is to make sure you get a favorable wind mitigation inspection.  If you have an old roof then it will be tough.  Also, most agents quote a 2% wind deductible and $1000 hazard deductible.  Most lenders allow at least 5% wind deductible which I use and also put $2500 hazard deductible.  Verify that the replacement cost is correct as well as I had a case where they were way over what it would cost to replace the home driving up the price.

Hope this helps.

Ouch, that's brutal.  My insurance in the mid west is for full replacement value and it includes wind in case of tornado...$720/year.  If my insurance went up to 5k/yr I would be cash flow negative.

@Sam, Property insurance in FL does suck.  It is so bad that my agency needs to leverage our size in the Midwest so our FL branch can write a small % of property in FL.  For every $10 in premium we write in the Midwestern states, they will allow us to write $1 in FL.  Insurance companies have not figured out how to make $ on Property down there.

1 tip I can give you when trying to get other quotes.  I recommend you track which insurance companies you have approached when calling a new agent.  It's a waste of time for you and the agent to reproach the same market time and time again.  Just call and say "I have Citizens, and I have quotes from A, B & C, do you have any other options?"  This approach will get you your answer much faster than calling 5 agents and asking for quotes.

I heard the trend for paid off homes in Florida is to go self insured. It is a gamble but putting 5k in the bank a year adds up quick and easly covers new roof etc. In Cal, after the 94 Northridge quake, fema did low interest disaster loans/grants for anyone who needed so everyone got properties back in shape regardless if they had earthquake insurance or not. I know a tornado/hurricanes/floods can be far worse than these quakes typically but at 5k a year that is pushing the business math to manage that risk personally. I guess if I was in a sink hole zone or coastal area I would not self insure.



@Sam Leon I was originally forced to use Citizen's on my first rental property in Florida that I purchased in July of this year. I only pay $1,720 for coverage on a 1,700 sq. ft SFH insured at $242,000 so yours sure sounds high, although I have no idea what size/value you are covering. I also would stress for you to make sure you did the wind mitigation as I know this reduced my coverage by $735.00 and I don't believe that I even have the "best" of the wind mitigation requirements that would increase the deduction even more. I also just received notice from Olympus Insurance that they will be assuming my policy in November unless I opt out. I would suggest you shop policies/pricing, however I do know that when I signed with Citizen's I was required to pay the full annual premium up front and was told that I cannot cancel early and get a prorated refund. Therefore I have no plans to shop around until closer to the end of this policy.

I have to agree - insurance prices down here are astronomical. Closing on a triplex in Fort Lauderdale next week and the only policy I could get was citizens multi-peril, plus a $1M liability policy, required by lender. The premium is just over $5K per year.

The property is in a great location, but has no wind mitigation extras that would reduce the premium, and also is still on glass fuses for all electric panels. We'll be switching out the panels shortly after purchase, but that doesn't help us with the premium in the first year which must be paid up front. 

Any solid insurance agents working in Broward county on this site who would care to chip in with possible alternatives/solutions?

Midwest - My Properties valued around $150 k cost me about $600/yr

With 5 houses in the Destin / Miramar Beach area the price range is 5K to 7K. We use Citizens and shop every year via our independent broker. The are VR's thus part of cost of business.

None are in flood but they are at least 2 blocks or closer to the beach...

OK here are some specific questions hopefully there are some insurance experts here to chime in.

If I have a Citizens policy through agent A, is it possible to switch to a new Citizens policy with agent B?

I have different policies with different agents right now.

Problem is agent A requires me to buy a Citizens dwelling and windstorm policy that is the same amount as the value of the property.  I argued with them that this makes no sense because the policy is for the dwelling only, even if I have a major cat 5 hurricane that destroys the house completely the land is still there.  So if the property is 300K land 100K improvement 200K it should only be covering 200K, not 300K.  The agent said they can't do that because Citizens does it a certain way.

Then we have another agent B issued a Citizens policy for another property, and was able to obtain coverage for the property at a lower value.  I called agent B and inquired, can they give me a quote for the property currently through agent A, agent B informed me they can't do that because I am already on Citizens and they can't undercut another agent with a policy under Citizens.

So I guess my choice is to actually switch carriers if I can find one.

@Sam Leon  

It sounds like you have a fully underwriter policy with agent A,  Meaning, an underwriter has looked at all of the details of your property and created an accurate Rebuild Cost estimate.

 Agent B probably has a ballpark estimate that has not had any underwriting interaction.  If you could move to Agent B, chances are once it went through the underwriting process, you would end up with the same product you had with agent A.

I do agree insurance sucks and sometime you need to suck it up until you find a good policy . For a 6 unit in RI it is over 1200 a unit while the previous owner paid 2000 for all units but the house is an old stone house and the bank wants replacement cost, and no else would write it.  That I have to reign in and I am looking for options after a couple of upgrades.   For a RI 3 bed it is 1600 for 1600 square feet as I am assigned risk for that one (no flood) but close to ocean and student rental. The one that kills me though is the 3000 plus in flood insurance we have to carry on a house until it is sold to fema and knocked, the logic escapes me but it is a condition of sale. And you would think you could leverage multiple policies but I can't seem to do that because of how my situation falls.  If anyone has some good suggestions for RI I would love to hear them.  

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