All Forum Posts by: Tony Wilcox

Single family homeowners policies and single family landlord policies typically are similar in regards to premiums if everything else is the same such as coverage amount and roof age. However; if you are wanting to insure any property in Texas at full replacement cost the average premiums they are at are here to stay. They are not more in line with what it costs to replace roofs as often as they need to in that area of the country. 

If you can swing it, and your roof is newer, you can look into an agreed value policy. This will cover your home at replacement cost coverage still but the total loss amount would be less. For instance I have some clients where the RC amount is $400k, but they only insure it for $250k, but if the roof needs replaced it is covered at RC. 

Also of course there is the ACV option, but I prefer the agreed value for my clients personally, but I let them decide. 

If the home is in Wisconsin the carriers that will offer full RC on a roof over 15 years old is extremely limited. Most of the country is also the same, but some states the carriers will allow to 20 years old, but that is also very limited. If the roof is still in really good shape some carriers offer coverage just based off how the roof looks and not age. However; those carriers probably don't like insuring a 4plex. I will say you are very limited and my investors either replace the roof or just get a different loan to now insure the roof at RC. In your current situation you are basically stuck either paying a really high premium or needing to replace the roof.

Auto Owners is great, but I don't believe they write in that part of Mississippi. Also they aren't fans of vacant homes.

How long will you need the home covered for?

Yea no problem in Chicago here. Now if the units are 6+ that is a different story

I just wanted to share with the group here about info I am receiving from carriers on the future of rates. I realize everyone has been seeing an increase in rates the last few years and probably on current renewals. What I can say is there is some light at the end of the tunnel here. I am starting to see reports from major carriers that the loss ratios are quickly falling. This means carriers will not be able to get approval to continue to raise rates through the department of insurance in various states. 

This is all to say we should see rates starting to flatten out and not drastically increase as they have been recently. I hope this helps!

This can be an issue with multiple carriers, Travelers being another one of them

I have found my clients like the ease of use of one policy, and for discounts. If you have a claim some carriers are able to remove that one location from the others to help on cost and not have them rated for a claim for each property. 

Ken, I know I said I was done but I have to educate you again. Also it doesn't affect me at all if a client files a claim. In fact if I wanted more premium, wouldn't I encourage higher prices for filing claims????  This is how it actually works....

Client calls in. Hey, I might have a leak in my roof.... I reply saying ok lets make sure to mitigate any future damage. Have you had a roofer out? No, ok please call one and if you don't have one I have a few resources. We want to make sure no more damage occurs. They get the roofer out right away to assess. They do this for free btw so no call to the carrier about this.

Then the roofer goes out to the house and gives us a breakdown on what is going on. Oh there is no shingle damage, or there is. Ok, what is the estimate to fix the home? Sometimes it's yes they need a new roof, then ok lets file the claim. Sometimes the roofer says well it's only like $4,000 in damage for me to fix. 

That's when I talk to the client and say ok, your deductible is $2,500 so if the total amount to fix is $4,000 we can file for that and you would get the difference. Or if you didn't want that claim on your record since only 4k to fix, and wanted to pay out of pocket of course that is an option. I lay out what would happen to their policies at renewal if they do file said claim. I never say they will be dropped, because for one there's no way to know that until renewal.

If the client fixes themself and doesn't file a claim, then there is no claim registered on their policy. This is how it's done Ken. That is how you protect the client from malicious $0 claims counting against them. The client gets every possible option to make the decision themselves depending on their situation. I have never talked a client out of a claim, they get educated and presented options. 

Also carriers don't just drop people automatically for $0 claims. It does happen but many carriers also don't count $0 claims against people.

Have a good day Ken and good luck. 

There are many contributing factors into why this is happening nationwide, and not just CT. 

Carriers catching up to inflation (insurance lags behind inflation), and cost of replacing roofs/cars/houses.... It costs more now to replace/fix a car. Body shops are taking forever to fix them and car rentals are taking longer, which the carrier is paying for is just one example of many. Roofs are double what they used to cost 5-10 years ago. 

They say there have also been more severe weather events. This means events that cause over $1B in damages. I am not sure if there are more events, or materials/labor just costs more for them to say it is a severe event. I posed this question to the head of Travelers personal insurance department at their HQ. He couldn't give me an answer on that!

Carriers cannot match what is needed to charge in certain states that limit what they can raise their rates too. This causes them to add restrictions, or just pull out of the market all together. If you are losing billions of dollars and can't match the rate required due to the state insurance department not allowing it, there is no need to continue business. 

All coastal states have a possibility to be hit by a major weather event. You might think CT doesn't have any, but being on the coast there is always a change of a hurricane, or other severe weather events. 

Many carriers, like Progressive, insure nationwide, and when severe weather events hit an area, it wipes out all premiums they had nationwide. This also causes them to raise rates or just get out all together. 

Insurance also needed a reset after they were insuring homes at $700-1,000/year ($300,000+ dwelling coverage) with a $1,000 deductible. Think, how can they cover expenses insuring homes at this amount with a deductible the same as your car! 

I know none of this will make anyone feel bad for the carriers, but they are a business and they are just matching what it costs to not lose billions of dollars.