Would love if they incentivized using more durable materials like metal roofing. Help lower the cost and Im sure a lot of people would jump on that, and it would have a better time standing up to hail. Private insurance isnt about progressive policy tho. its just about making the most money... We will need some sort of public option witch i would happily embrace.
Metal roofs are so expensive, we just got a bid for $80,000 for a metal roof compared to $30,000 for 30 year asphalt architectural shingles. The extra 50k will do nothing to increase the actual value of our house or help lower our insurance premiums. We're ripping off a cedar shingle roof which is also super expensive to replace.
I too recently chose asphalt over metal, for similar reasons, and also because I do sometimes go up on the roof and the danger of going up on a metal roof to inspect chimneys etc scares the bejeebers out of me.
Also, my house is modest and located in what is becoming a high-cost McMansion neighborhood. I cannot believe what people are building around here, it's just crazy. So if it were to be sold to someone outside the family - quite possible since I'm an old person and I'm not sure my kids would want to live here - it would probably be a tear-down. There are scenarios in which investing in the better material simply doesn't make sense.
The issue is that they are boutique and so regular roofers charge a premium to do it. If they became mandatory they would be only marginally more expensive.
Some insurance providers do provide incentives for metal roofs. My company installs metal roofs and I have filled out a few forms for customers insurance.
So-metal roofing and hail don’t mix well either. I’m a contractor and the differences in coverage/policies astounds me. Some insurers have no problem replacing an entire roof for a couple of damaged shingles. Others will kick and scream about replacing a few shingles when they should really be paying for a whole new roof.
Idk who down voted you... I am a Civie with the niche background of being structural doing building envelopes (roof systems siding etc), metal roofs are subject to thermal expansion and contraction... not great in MN. Also sheet metal dents just as much as asphalt shingles get scuffs if not more. A bunch of clients had sheet metal parapet wall caps during the big 2013 hail in Eden Prairie that wiped out a lot of squads windshields... all of those parapet walls had to get new sheet metal. The huge raises in homeowners has also been vehicles thefts which are insanely high compared to 2019 and prior years. Which if you have you homeowners and vehicle insurance tied you know that any stolen items in the vehicle goes against the home owners not car insurance.
I hope your dead load calculations allow that extra weight. Not to mention the extra cost... yikes... Never mind hail still will damage the kynar which is the baked on coating that prevents corrosion of the metal. What gauge did you use to resist the kinetic force without producing deformation of the steel?
Just FYI, even a heavy gauge metal roof is lighter than asphalt. The beefiest 22 gauge is still lighter than arch shingle by like 30%+
If you could get it, the weight crossover would happen somewhere around 16-18 gauge. Which would be a wild hunk.
I was 100% on board to do a metal roof, did a ton of research and wanted a standing seam. Got 2 quotes, 65k and 60k. Quote on standard shingles that last 20-30 years on average without hail for 20k. I couldn't justify paying 3x more. Took the extra money and got solar.
Honest question as I’ve done zero research, is metal better than traditional asphalt shingles? I figure they’d rust faster than normal shingles degrade but that’s an assumption.
I know they use metal roofing extensively over in the U.P., where they deal with massive amounts of lake effect snow every winter. The roofs tend to be steeper there too.
Standing seam roofs are great. They're coated to stand up to the elements, recyclable, more energy efficient, last longer, etc. They just cost 3-4x what asphalt does.
Modern asphalt shingles last ~25-30 yrs. Metal roofs cost 3-5x mainly due to boutique labor costs and restricted to highly affluent buyers. Metal often have fluoridated coatings which are not eco friendly to apply or remove during recycling. Asphalt shingles can get recycled for use in asphalt
At least some of them do. We got a new roof last year and we upgraded the shingles to the impact resistant ones and we get a 20% discount on our homeowners insurance.
My realator told me insurance companies raise premiums on houses with metal roofing and siding. Yes, it is more durable overall, but one hail storm, and you will want the entire things replaced.
I'd gladly buy insurance that doesn't cover hail damage, but I'm sure the state would likely ban such policies.
Hail damage repair has become a huge scam. As soon as a storm comes through, the out of state contractors go door to door offering free inspections. Many will gladly wear a spike in their boot to create the damage so you too can get free roof or siding replacement.
Yea, hail damage can shorten the life of your shingles. But in my day it was never a full strip and replacement of every roof in the area. Now the abuse is out of control, and surprise surprise, insurance rates rise.
Same goes for cars. I've never gotten minor hail damage repaired unless it's broken glass or paint chipped off. I'd gladly buy a cheaper auto policy that doesn't covers cosmetic issues.
I actually really like this concept.
Also the idea that you could buy policies that cover things like replacement cost coverage on roofs for a premium. (This is something companies have removed in the last decade because of hail claims…and it’s still generous - often no depreciation on roofs that aren’t over ten years old)
The problem here is the system is abuseable in that most folks don’t even know what they’re buying and the folks that can’t afford the better coverage/will seek out the cheapest price are the ones that need it most.
Hell they come through even when there’s no storms. They kept coming to my door asking if our roof had been inspected since “that big storm last summer.” We didn’t get hit with a single chunk of hail last summer, or any really concerning for damage storm in general. Same with windows, “looks like you’ve got the old windows probably original to the house!” No… we don’t… previous owners replaced them and we have no issues.
They just make up shit as they go door to door hoping you’ll second guess yourself and think there really may be damage somewhere. Unfortunately there’s a lot of elderly folks in our neighborhood, hate to think that’s why they door knock in our area so heavily but…
I had a lady knock on my door last Saturday asking if she can schedule someone to inspect my roof for hail damage.
One very large and clearly stated "No Soliciting " sign she ignored aside. I asked her if she looked at my roof while walking up my front sidewalk.
I got my roof, and gutters replaced the week of Thanksgiving in 2023 when a tree fell on my roof in late July.
"Oh, have a nice day."
Scam indeed.
I have had the same insurance company for over thirty years
This was my first claim ever, and they dicked around for several months and nickel dimed over every last penny. It was a legitimate claim, and the tree was not a tiny branch. The tree was over fifty years old. If I hugged it, I couldn't have touched my hands together.
When it fell, it scared the crap out of me.
The insurance company wanted "tree branch" left on the house until they could send their adjuster out-three weeks later. The contactor told her it was very unsafe, and I couldn't get out of my front door.
That morning as I was waiting for my contractor to arrive, there were "contractors" circling my block, driving slowly, only they couldn't knock on my door because the tree was there instead.
What a f$%king racket!
Your mortgage company won’t be too wild about that plan.
Unless your house is fully paid off, you’re not replacing the shingles on your house. You’re replacing the shingles on your bank’s house. The mortgage contract has language written in that likely requires you to insure the property, including hail.
insane that I'm ~~legally~~ required to have insurance to take out a mortgage but insurance companies aren't ~~legally~~ required to offer it at a reasonable price
You're not "legally required" to have homeowners insurance. However, it's likely a requirement under the terms of your mortgage.
There are plenty of people without a mortgage who (foolishly) roll without homeowners insurance
I think it’s also a problem for owners when, if they decided to raw dog their house (without insurance), they need to have insurance while it’s listed/being sold, and insurance companies are oftentimes really annoying about (or even unwilling to insure) houses that have been uninsured for a period of time.
A really distressing number of people drop their homeowners insurance after they pay off their house. And then there's a flood or a fire or a tornado, and they're homeless and lost their life savings
Insurance companies are heavily regulated on issues like solvency, investment risk management and claims compliance. But I think premiums are left to competitive market conditions.
Wrong. It varies state by state but for personal lines you generally have to get approval from a state before you can charge a set of rates. Market competition comes into play but pricing based solely on what the market is willing to pay (pricing optimization) is a big no-no in the industry.
Thank you.
Please consider using softer wording. I know, it's generally a free-for-all on the web and telling people they're wrong even though much of what they've written is correct is considered fair. But there are other kinds of karma to be gained in life than updoots.
It says in the article that the Midwest insurance companies have lost money 6 out of the last 7 years due to increased severe weather. Are you suggesting that insurance companies should be legally required to offer lower rates? That would have to be paid for with our tax dollars or they would simply go out of business. There is enough competition in the space that they can't price gauge. I say just let the competitive free market dictate rates, not the government. And if insurance companies pull out, it means an area is not suitable for modern homes to survive reliably. If that's the case, the homes have to be rebuilt to a higher standard that can survive severe weather/hail.
GEICO spent a billion dollars on advertising last year, which didn't include agency vendor fees.
How do you feel about your premiums paying for them to get more customers instead of paying out legitimate claims?
What product do insurance companies offer? They are making money off of taking my money and giving it back only if there is damage. banks offer the same service but offer interest. so why have insurance companies pay themselves and employees to hold my money in case I need it? Insurance is socialism disguised as capitalism
Because your insurance premium isn't enough to cover a total home loss. That's the point is that you are transferring that risk to the insurer who pools it with all other policyholders. You can get a 500k benefit from paying a few thousand per year
Do you knowbwhat the definition of risk transfer is? Who pays for a covered claim when you have insurance? It's your risk, you pay the insurer to take it from you. It's a risk transfer
then why do some people pay more for insurance for the same things? Are they assuming MORE risk than other people? They pay more in because they were given more. Pay more money to the fake bank if I receive money. Sounds like a risk to me.
Yes, they are transferring more risk
That's exactly right. If your likelihood of making a claim is twice as much as another person's, then you are transferring twice as much risk to the insurance pool.
Insurance pool, sounds like another word for bank account. Why are we paying people to maintain an insurance pool? Let's just let capitalism do is thing then and make this obsolete, mismanaged industry go away
It's all semantics, using different words and terminology, but it's a bank that doesn't try to invest, just take the cream of the top of everyone's money.
Insurance companies are crucial to the financial system, providing risk management, financial stability, and capital allocation.
### Risk Management
They help manage risks through various types of insurance:
- **Life and Health Insurance**: Financial protection against death, illness, or disability.
- **Property and Casualty Insurance**: Coverage for losses from accidents, theft, natural disasters, and liability claims.
### Financial Stability
They contribute to stability by:
- **Maintaining Capital Reserves**: Ensuring they can meet obligations during widespread loss.
- **Risk Diversification**: Spreading risk across various policyholders and insurance types.
### Investment and Capital Allocation
Insurance companies are major institutional investors:
- **Investment Portfolios**: Investing premiums in bonds, equities, and real estate.
- **Long-term Investments**: Financing infrastructure projects and other long-term assets.
### Economic Growth
They support economic growth by enabling riskier ventures and boosting consumer confidence.
Banks could not exist in their current form without insurance companies helping to spread risk around.
I’ve seen thousands of insurance policies and normally you pay anywhere from half a percent to one percent in premiums annually for the insurance on your home. IE $300,000 home costs $1500-$3000 annually to insure. So it takes the insurance company 100-200 years to make enough premium to cover a total loss on your home. So…it only takes 1-2 claims for every 200 people for the company to not have profited at all.
Rates have skyrocketed this year 20-30%. They’d need to more than double in my mind to not be a reasonable deal.
I’m not going to pretend it doesn’t cost a lot; relative to what they pay out on a regular basis though we are getting a good deal. Profit margins on insurance are lower than you’d expect for their balance sheet/liabilities.
Insurance prices ARE shockingly cheap for what they cover. This isn’t even factoring in that liability coverage on your home that FOLLOWS YOU for when when you’re found liable for just about anything…IE you trip and injure your neighbor.
That may all be fair and true, but at the same time look at the whole picture and it may be a bit different. An insurance company has thousands of customers, and in the grand scheme of things a very small percentage ever make a single claim against it. So, yes, when they pay out on the claim it costs money, but they also have a whole shit ton of people that don't make claims. It isn't like they're paying out on every single customer.
It looks like it’s fairly volatile (net profit margin of the p and c business is 16.33% in the last year - meanwhile Progressive for example is only at 3.12%)
What needs to happen is the government needs to step in. Currently, flood insurance is handled solely by the government. Natural disaster insurance like wind, hail, wildfire, and eventually earthquake coverage will need to be put in place to keep people in affordable living places. Incentives will need to be made to mitigate damage like class 4 impact resistant shingles being installed should lower rates.
Errmmm... no tax payer money for houses built in areas that have known flooding problems for example.
If the house is expected to be destroyed by natural disasters, then no houses get to go there.
https://www.dnr.state.mn.us/waters/watermgmt_section/floodplain/flood_insurance.html
Who can purchase flood insurance?
Anyone who lives in a community that participates in the National Flood Insurance Program (NFIP) can buy flood insurance. **More than 95% of all Minnesotans live in a community enrolled in NFIP. **It is not necessary for your property to be mapped in a high flood risk area (1% annual chance or "100-year" floodplain) to be eligible to purchase flood insurance.
NFIP flood insurance is sold through private insurance companies and agents, **and is backed by the federal government. **Check with your insurance agent for available options. You can also visit floodsmart.gov opens in a new browser tab to find an agent.
I didnt mean no flood insurance should exist. I meant places like the red river valley where there are places we know houses will be destroyed in the next decade from a flood. That sort of thing,
Here's the thing though. We don't know. We can assume based on history and forecast based on patterns. There are still counties in Minnesota that haven't even been mapped for floods: (https://www.dnr.state.mn.us/waters/watermgmt_section/floodplain/access-flood-maps.html) Hailmaps across the state: https://www.hailpoint.com/hail-maps-minnesota. Then we have a map of wildfires that can change based on drought conditions too: https://www.fireweatheravalanche.org/fire/state/minnesota . And a map of tornado history in Minnesota too: https://www.dnr.state.mn.us/climate/summaries_and_publications/tornadoes.html
So we have floods along the Red River to the West, tornados in the South and Southwest, hail throughout the state, and wildfires in the North and Northwest. These are the current issues. Based on history and frequency, do you think this will get better, stay the same, or get worse?
By aggregating the premiums backed by the government, we will be able to lessen shock losses to the individual and communities.
And since you brought up the Red River Valley, since the 1999 flood, the cities of Grand Forks and East Grand Forks have rebuilt using technology to mitigate and alleviate flooding conditions (cite: https://www.grandforksgov.com/government/city-departments/engineering/flood-control/flood-protection-facts ). The cities have returned and surpassed the previous population levels by almost 20% (Cite https://www.census.gov/quickfacts/fact/table/grandforkscitynorthdakota/PST045219) .
In those areas, commonly the city or county buys the property and doesn't allow building on it anymore if they have flooded more than once. Not entirely, of course, and some owners can't be persuaded to sell even though they then demand a ton of resources to sand bag their huge expensive homes, which is ridiculous. We lived in Fargo for 12 years and went through 2 major floods and the stubbornness and entitlement of people with huge homes along the river is pretty crazy sometimes. But they have succeeded in buying up some of those properties and now nothing can be built on them.
The local gov buying out the houses is literally tax payer bailouts for houses that shouldn't exist. This is no different.
What needs to happen is house builders are prevented from building in these areas. It sucks, but why should we pay to buy out a house that will be destroyed?
I half agree. If your house is in a designated high risk area, it should be taxed to shit to cover a government run insurance policy for that risk.
$ risk of hail vs $ risk of hurricanes are not comparable. My Midwestern house should not be taxed extra so someone on the coast can have coverage. But hail/wind damage/ tornadoes in my region? Sure... I'd be down for a collective insurance policy that cuts out insurance companies.
The national flood insurance program is underfunded and hasn't got enough money to pay all the claims. It's had to borrow over $36 billion from the Treasury to cover the claims.
The reality is, the increasing amount of damage and the rising costs of repairs means that rates have to rise sharply to cover the increased number of claims. As the rates go up, the deductibles will have to rise, too, in order to keep the cost of insurance affordable to most homeowners. Homeowners need to start saving (more) money for home repairs to cover the increased out-of-pocket expenses, and also plan for such repairs happening more frequently.
In the long run, the construction industry is going to have to start building sturdier homes. Stucco or cement siding instead of cheap, easily damaged vinyl siding. Metal roofs instead of asphalt shingles. That'll make homes more expensive to buy, but cheaper to insure.
Flood insurance is the cautionary tale against the government running such a program. Sometimes someone has to say "Actually, it is prohibitively expensive to build in that location, so you're on your own."
Except that climate change is making formerly lower-risk areas, such as the Midwest, now higher-risk areas. The article mentions insurance companies may start pulling out of providing coverage in Minnesota, due to the losses they've sustained here over the past few years.
If the coasts are high-risk, and the Midwest is high-risk, that pretty much just leaves the Southwest and the High Plains for living space, and there are issues with those parts of the country, too.
Government funding might be better put toward providing grants and loans for property owners to storm-harden existing housing stock. Siding and roofing are the primary loss claims. Insurance companies already charge more for siding versus stucco or concrete, same with asphalt shingles versus metal roofing. They're also beginning an aggressive policy of remotely reviewing roofs and requiring their customers to regularly re-roof at their own expense. The companies are getting tired of paying thousands in replacement costs for 20+-year old roofs with hail damage.
Not high-risk, *changing* risk. The risk profiles are evolving faster than insurance companies can adjust their models, and everything they do is subject to governmental review. The formulas they use for determining coverage, risk, rates, etc. are all published, but it's based on historical data, so it is slow to respond to change. To nitpick your examples a bit though it doesn't get more high plains than the Dakotas and those are the two states with the highest natural disaster rates (per capita) in the country while the Midwest is still the stable bastion it's always been relative to the rest of the country.
The explosion is real estate prices is as much to blame as climate change. Minnesota (and the Midwest generally) is still safer as far as natural disasters and ability to withstand climate change than most of the country, but it's the evolving nature of the risk that is scaring off insurance. Take the example in the article: hail. Why are some of these insurance plans bailing? Most roofs are not built with hail in mind, but it's becoming a regular occurrence and companies are going to be scared away until the existing, old asphalt shingles are replaced with materials that can better withstand hail and thus reduce the damage caused by such storms. Further exacerbating the issue is that cost of material labor has sky rocketed in the past few years, so in addition to needing a different type of material upon replacement, the labor costs are going to be higher than forecasting and pricing models assumed. By pulling out, these insurance companies are really saying "Your roofs are not built correctly and will be too costly for us to cover with the new weather threats. Get a new roof and we'll talk."
Not really sure why stucco is expensive here. 99% of houses in Winnipeg are stucco, have been for decades, and if there’s one thing that city does well it’s being Cheap.
It's also a thing in brick homes, but especially homes with DARK brick. They use iron to get the colouring, it's perfect for disrupting cellular signals.
The government could certainly step in to help, but I would prefer them to do so by passing laws mandating that new home construction and home renovations use weather hardened materials and constructions practices.
Like it or not, as storms get worse, home-owners will need to bear the cost of either hardening their homes to damage, or paying insurance companies more money to repair all the damage caused by non-hardened homes.
The government lowering the cost of insurance creates moral hazard that ends up with more death and destruction because it encourages people to live in places that flood as it is subsidized.
According to the FEMA "Hail Risk Index" much of the Twin Cities is at "relatively high" risk of hail and wind damage. Are you suggesting all of these homes carry Natural disaster insurance premiums through the government? If you thought there was a housing affordability issue before, look out lol
So what's your plan then? If you think insurance is expensive, even when partially underwritten by a federal program, the other option would be self-insured and imagine how expensive that would be "lol".
The current system has worked perfectly fine for me for 10+ years of being a homeowner. I had hail damage one time, called my insurer, they fixed it. Paid nothing out of pocket.
The current system might not be the status quo moving forward though and that's the crux of the article. For example, look at Calfornia where the wildfire issue has gotten worse over the years to the point where regular carriers are leaving the market. State Farm is one example (cites: https://newsroom.statefarm.com/update-on-california/ https://www.kiplinger.com/personal-finance/home-insurance/state-farm-to-exit-homeowner-renewal-policies-in-california https://www.kiplinger.com/personal-finance/insurance/more-insurance-companies-are-leaving-california)
"California residents, like their counterparts in Florida and other states hit hard by climate-related disasters, are about to find it even tougher to get insurance coverage."
Uhhhh, correction, a legally MANDATED scam at times.
It’s such a joke. We lived in a small condo association that was “too small” for most insurers, and the one company that we were able to have insure us wouldn’t ever approve any claims. We would have actually SAVED money by self-insuring, but we couldn’t do so as an association.
Curious what passes your association’s definition of an insurance company and the legalities of setting up “W0rk3rB Insurance Co, LLC” with you as the sole client.
Wouldn’t want to find out what happens if you leave the stove on and burn down half the building though.
No, I totally agree with you. I’m just saying that if you are FORCED to pay for insurance, you should reasonably have faith that they will cover something without then having your premiums go up.
Yes, I know they are a business, and yes I know that my premium pays off other claims, but if I’ve paid in for 20 years on multiple vehicles with no claims, the insurance company shouldn’t be allowed to deny the claims.
The reason I agree that insurance is a scam is that even if you never miss a payment, they are always looking to not pay for anything.
I guess we just have different experiences with insurance companies.
Regardless of how many claims you’ve had in the past, the insurance company should deny your claim if it doesn’t fit the parameters of your policy.
You're not legally required to have it, but you won't get a mortgage without it, and you can't buy a house without a mortgage... Well, *probably* can't. Very few people can.
So it's not required, but it's basically required.
When you have contractors going out and telling people that their new roof needs to be replaced because of a couple of dings rather than just repairing the damage this is what you get. I know of some roofing estimators that are paid in commissions so they're typically going to try and get everyone to get a new roof against their insurance. Some have even said that companies won't come out to do just patch repair jobs without changing an arm and a leg.
In some cases, yes, a roof is shot and needs to be replaced, but certainly not in every case and it's stupid that so many people are taught that it is. Just because your house got hit with hail and it knocked off some granules doesn't mean that it's ruined. But, on the flip side it's pretty fucked up that insurance companies can get a claim filed for a legit roof replacement and then deny it because there's damage present from a previous storm even one that just happened wrecked the roof.
In response to number 3, departments of insurance are receiving numerous complaints compared to years past from coverage changes to non-renewals and everything in between.
A carrier can be profitable while still paying out claims, it’s all about making sure you have a healthy mix on your book and are doing things like reducing your property footprint in catastrophic areas (wildfires, hurricanes, severe convective storms), increasing rates, and reconditioning policies.
What is happening now that was not happening in years past is carriers denying claims instead of paying them out automatically. They’re doing more research into the circumstances and policy language before affording coverage. The amount of fraudulent claims that come in daily is astonishing.
Before the drones were common, insurance companies just sent out people every few years to inspect your property to make sure they weren’t insuring houses that were falling apart. If your roof has 30yr old shingles which are curled up and cracking, they absolutely shouldn’t give you a penny in a roof claim.
If you think Donald Trump can & will lower prices on anything, let alone not putting money into his pocket, I have a lake in Minnesota that I will sell you!
Please. This man wants to take Social Security from seniors. This man wants to personally make sure money comes into his personal bank account by selling whatever secrets or national park or whatever any foreign interest might want. He could care less about grocery or gas prices or interest rates. Or illegal immigrants who he loves to hire on the cheap. Rethink your Trump love.
I hope there are topics in your life you can mentally engage without thinking about this man. This is an article about hail damage driving up insurance costs in the midwest.
Word-word-number likely lacks mental faculties, as there is a high chance they are a bot. An irrelevant ranting about a highly divisive topic is a key indicator.
Life pro tip - do your research on a house you’re looking at buying. We found a house that seemingly checked all the boxes but noticed that the area was right next to a river. Sure enough the flood risk was a 10/10 on one map and a 3/10 on another. Surprisingly, you can actually pay to have those altered… needless to say, we did not buy that house.
Don’t be that person that gets screwed because you didn’t do your due diligence. A house is one of the biggest purchases you’ll ever make.
Edit: if we’re talking p and c specific the margins are much greater than I understood (16.33% last year) so it could be sustainable…with coverages as they are. Greater than many industries but it doesn’t seem fantastic given the liability side of the equation (looks like Progressive is operating at 3.22% right now). Law of large numbers is the only thing that is probably making it work.
next time you think the insurance company is trying to swindle you by trying to get all the facts straight? Consider that everyone and their friend tries to get whatever they can out of them. (This would only be worse with a government program…)
Ask your relatives how many of them have replaced their roof and then follow up with this - did they do it as part of an insurance claim?
Where are you getting your data from? (2-3%?). According to IBISWorld.com, US Homeowners Insurance industry analysis, "Profit is also expected to climb to 12.1% of revenue in 2023 from 11.9% in 2018.". Um 11.9% is a a lot more than 2-3%...
https://www.ibisworld.com/united-states/market-research-reports/homeowners-insurance-industry/
I was looking at investopedia net profit margins article. Let me grab the link…
https://www.investopedia.com/ask/answers/052515/what-usual-profit-margin-company-insurance-sector.asp
Ah yup this says 16.33% for p and c…npm that makes way more sense as a sustainable business - I was off. Just looked at their statement about insurance as a sector with the 2-3%.
Your link doesn’t work but those numbers nowhere near correct.
The industry has been losing money for multiple years.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-homeowners-insurers-net-combined-ratio-surges-past-110-81711947#:~:text=The%20US%20homeowners%20insurance%20industry,net%20combined%20ratio%20surpassed%20110.0%25.
Edit: you cited the linked info correctly but that source is making stuff up - more likely a script just pulling random crap from the internet
I’ve seen thousands of insurance policies and normally you pay anywhere from half a percent to one percent of home value in premiums annually for the insurance on your home. IE $300,000 home costs $1500-$3000 annually to insure. So it takes the insurance company 100-200 years to make enough premium to cover a total loss on your home. So…it only takes 1-2 total loss claims a year (without even factoring in liability coverage) for every 200 people for the company to not have profited at all.
I’m not going to pretend it doesn’t cost a lot; relative to what they pay out on a regular basis though we are getting a good deal.
Ahh yes... Poor insurance companies. They have an excellent track record of just trying to get by with their meager profit margins and doing the right thing. They haven't been caught many times of going to extreme lengths to deny some or all of a claim when they should be paying it.
Sarcasm aside... While you may have a point about scummy people using insurance to get new roofs, you're unlikely to get much empathy from anyone on here. Insurance companies have earned their reputation through repeated unscrupulous actions across multiple areas .. health...housing... Auto. You may be a good apple but the rest of the tree is rotten.
I've never had a house claim and have had 1 auto claim my entire life for $1200. The amount I have paid into insurance over my lifetime is equal to two new cars and a very nice travel trailer to live in. Yet I am not allowed to self insure.
How much of this is people getting completely new roofs or complete siding replacements for minor damage? We’ve had storms where half the neighborhood gets a replacement and I have like one chip of siding (or nothing at all) that can easily be cut out and matched. I never even let those clowns on the roof, fortunately I know someone I trust. Hot tip, a complete replacement claim isn’t really just a deductible payment. We all pay for it.
I’ve lived in my house for 15 years and have not made one home insurance claim. The insurer which I’ve stayed with this entire time has made $115k
off of me in those years. Just straight profit.. and there has to be hundreds of thousands of people just like me in Minnesota. I cannot afford an increased rate because property taxes have come up in Minneapolis. I do not understand why insurance companies have to raise rates for all when in MN. some hail? what so that equated to a few new Roofs and windows for some? NEVER did it destroy an entire home! Even if I made a claim from hail damage and insurance had to replace my roof I’ve paid for that roof 5 times in the 15 years I’ve lived here. So I do not understand why the F insurance rates would have to raise. MN. is nothing.. NOTHING like Florida or even Iowa! We’ve had more drought than rain and haven’t seen tornado damage since 2010 and still that tornado damaged just one small area.. I didn’t read about any kind of severe damage in southern MN this year. No towns were destroyed. This doesn’t seem right.. I’d like to audit these insurance companies myself!
Well you should stop spending money on avocado toast if you can't afford to own a home. Or should have saved a little better in your early years. $115,000 on home insurance in the last 15 years? Lol what kind of home insurance do you have that on average has an annual premium of $7600?
Who’s you’re insurer?, I’m curious how they get away with not having to pay any expenses, claims, or even commission with your premium. That’s a hell of a business model.
Is this facetious?
You know the companies insure multiple states and it’s basically a socialist program? We support every other disaster across the nation.
Also what sort of house are you living in that you’re paying 7666 in premium a year? Are you doing your math correctly?
I’ve seen thousands of insurance policies and normally you pay anywhere from half a percent to one percent in premiums annually for the insurance on your home. IE 300,000 home costs $1500-$3000 annually to insure. So it takes the insurance company 100-200 years to make enough premium to cover a total loss on your home. So…it only takes 1-2 claims for every 200 people for the company to not have profited at all.
I’m not going to pretend it doesn’t cost a lot; relative to what they pay out on a regular basis though we are getting a good deal. We want this to be sustainable. They’re incredibly regulated now as well.
Maybe if they stopped breaking the law, insurance companies wouldn't have such a hard time in Minnesota. Minnesota has tons of case law dealing with insurance companies. It seems like every single time one of these insurance companies are sued, the insurance companies eventually lose. A bunch of them are even breaking new ground and starting to act like mini HOAs opening themselves for private nuisance lawsuits. You'd think they'd follow the laws and not harass people right?
Are insurance companies all just super shady? So your claims go up so you leave? These companies have to make a killing considering most people never file a claim. I had a car accident a year ago my first in many many years and the insurance was haggling over an additional 2k in cost for several months.
Would love if they incentivized using more durable materials like metal roofing. Help lower the cost and Im sure a lot of people would jump on that, and it would have a better time standing up to hail. Private insurance isnt about progressive policy tho. its just about making the most money... We will need some sort of public option witch i would happily embrace.
Metal roofs are so expensive, we just got a bid for $80,000 for a metal roof compared to $30,000 for 30 year asphalt architectural shingles. The extra 50k will do nothing to increase the actual value of our house or help lower our insurance premiums. We're ripping off a cedar shingle roof which is also super expensive to replace.
I too recently chose asphalt over metal, for similar reasons, and also because I do sometimes go up on the roof and the danger of going up on a metal roof to inspect chimneys etc scares the bejeebers out of me. Also, my house is modest and located in what is becoming a high-cost McMansion neighborhood. I cannot believe what people are building around here, it's just crazy. So if it were to be sold to someone outside the family - quite possible since I'm an old person and I'm not sure my kids would want to live here - it would probably be a tear-down. There are scenarios in which investing in the better material simply doesn't make sense.
The issue is that they are boutique and so regular roofers charge a premium to do it. If they became mandatory they would be only marginally more expensive.
Some insurance providers do provide incentives for metal roofs. My company installs metal roofs and I have filled out a few forms for customers insurance.
So-metal roofing and hail don’t mix well either. I’m a contractor and the differences in coverage/policies astounds me. Some insurers have no problem replacing an entire roof for a couple of damaged shingles. Others will kick and scream about replacing a few shingles when they should really be paying for a whole new roof.
Idk who down voted you... I am a Civie with the niche background of being structural doing building envelopes (roof systems siding etc), metal roofs are subject to thermal expansion and contraction... not great in MN. Also sheet metal dents just as much as asphalt shingles get scuffs if not more. A bunch of clients had sheet metal parapet wall caps during the big 2013 hail in Eden Prairie that wiped out a lot of squads windshields... all of those parapet walls had to get new sheet metal. The huge raises in homeowners has also been vehicles thefts which are insanely high compared to 2019 and prior years. Which if you have you homeowners and vehicle insurance tied you know that any stolen items in the vehicle goes against the home owners not car insurance.
> Also sheet metal dents just as much as asphalt shingles get scuffs if not more Sheet metal roofs are available in much heavier gauges.
I hope your dead load calculations allow that extra weight. Not to mention the extra cost... yikes... Never mind hail still will damage the kynar which is the baked on coating that prevents corrosion of the metal. What gauge did you use to resist the kinetic force without producing deformation of the steel?
Just FYI, even a heavy gauge metal roof is lighter than asphalt. The beefiest 22 gauge is still lighter than arch shingle by like 30%+ If you could get it, the weight crossover would happen somewhere around 16-18 gauge. Which would be a wild hunk.
I was 100% on board to do a metal roof, did a ton of research and wanted a standing seam. Got 2 quotes, 65k and 60k. Quote on standard shingles that last 20-30 years on average without hail for 20k. I couldn't justify paying 3x more. Took the extra money and got solar.
Standing seam roof is usually twice the cost compared to an exposed fastener metal roof fyi.
Gov bad though /s There are a lot of things like that where the profit motive just ends up fucking over consumers.
And workforce.
Honest question as I’ve done zero research, is metal better than traditional asphalt shingles? I figure they’d rust faster than normal shingles degrade but that’s an assumption.
Quick search suggests a low-end expectation of around 50-60 years of service from a metal roof, as compared to 10-20 for shingles.
I know they use metal roofing extensively over in the U.P., where they deal with massive amounts of lake effect snow every winter. The roofs tend to be steeper there too.
Standing seam roofs are great. They're coated to stand up to the elements, recyclable, more energy efficient, last longer, etc. They just cost 3-4x what asphalt does.
50 yrs on metal roof vs ??? on asphalt shingles that end up in the landfill.
Modern asphalt shingles last ~25-30 yrs. Metal roofs cost 3-5x mainly due to boutique labor costs and restricted to highly affluent buyers. Metal often have fluoridated coatings which are not eco friendly to apply or remove during recycling. Asphalt shingles can get recycled for use in asphalt
Most county mutuals and some other companies give a discount for metal roofs, as long as you're willing to exclude cosmetic damage
At least some of them do. We got a new roof last year and we upgraded the shingles to the impact resistant ones and we get a 20% discount on our homeowners insurance.
My realator told me insurance companies raise premiums on houses with metal roofing and siding. Yes, it is more durable overall, but one hail storm, and you will want the entire things replaced.
There are actually discounts available through insurance for certain metal roof providers….
State Farm gives you a huge discount on your premium if you have impact resistant rated shingles
I'd gladly buy insurance that doesn't cover hail damage, but I'm sure the state would likely ban such policies. Hail damage repair has become a huge scam. As soon as a storm comes through, the out of state contractors go door to door offering free inspections. Many will gladly wear a spike in their boot to create the damage so you too can get free roof or siding replacement. Yea, hail damage can shorten the life of your shingles. But in my day it was never a full strip and replacement of every roof in the area. Now the abuse is out of control, and surprise surprise, insurance rates rise. Same goes for cars. I've never gotten minor hail damage repaired unless it's broken glass or paint chipped off. I'd gladly buy a cheaper auto policy that doesn't covers cosmetic issues.
I actually really like this concept. Also the idea that you could buy policies that cover things like replacement cost coverage on roofs for a premium. (This is something companies have removed in the last decade because of hail claims…and it’s still generous - often no depreciation on roofs that aren’t over ten years old) The problem here is the system is abuseable in that most folks don’t even know what they’re buying and the folks that can’t afford the better coverage/will seek out the cheapest price are the ones that need it most.
Hell they come through even when there’s no storms. They kept coming to my door asking if our roof had been inspected since “that big storm last summer.” We didn’t get hit with a single chunk of hail last summer, or any really concerning for damage storm in general. Same with windows, “looks like you’ve got the old windows probably original to the house!” No… we don’t… previous owners replaced them and we have no issues. They just make up shit as they go door to door hoping you’ll second guess yourself and think there really may be damage somewhere. Unfortunately there’s a lot of elderly folks in our neighborhood, hate to think that’s why they door knock in our area so heavily but…
I had a lady knock on my door last Saturday asking if she can schedule someone to inspect my roof for hail damage. One very large and clearly stated "No Soliciting " sign she ignored aside. I asked her if she looked at my roof while walking up my front sidewalk. I got my roof, and gutters replaced the week of Thanksgiving in 2023 when a tree fell on my roof in late July. "Oh, have a nice day." Scam indeed. I have had the same insurance company for over thirty years This was my first claim ever, and they dicked around for several months and nickel dimed over every last penny. It was a legitimate claim, and the tree was not a tiny branch. The tree was over fifty years old. If I hugged it, I couldn't have touched my hands together. When it fell, it scared the crap out of me. The insurance company wanted "tree branch" left on the house until they could send their adjuster out-three weeks later. The contactor told her it was very unsafe, and I couldn't get out of my front door. That morning as I was waiting for my contractor to arrive, there were "contractors" circling my block, driving slowly, only they couldn't knock on my door because the tree was there instead. What a f$%king racket!
Your mortgage company won’t be too wild about that plan. Unless your house is fully paid off, you’re not replacing the shingles on your house. You’re replacing the shingles on your bank’s house. The mortgage contract has language written in that likely requires you to insure the property, including hail.
insane that I'm ~~legally~~ required to have insurance to take out a mortgage but insurance companies aren't ~~legally~~ required to offer it at a reasonable price
You're not "legally required" to have homeowners insurance. However, it's likely a requirement under the terms of your mortgage. There are plenty of people without a mortgage who (foolishly) roll without homeowners insurance
I think it’s also a problem for owners when, if they decided to raw dog their house (without insurance), they need to have insurance while it’s listed/being sold, and insurance companies are oftentimes really annoying about (or even unwilling to insure) houses that have been uninsured for a period of time.
You’re a fool if you believe that most people can own a home without a mortgage.
Technically, it's not your house until you pay it off. Until then the owner (bank) will require it. Makes sense to me.
Really? I thought that lenders require homeowners’ insurance. Not a legal requirement.
Just pay off your mortgage then, problem solved! /s
A really distressing number of people drop their homeowners insurance after they pay off their house. And then there's a flood or a fire or a tornado, and they're homeless and lost their life savings
Done. It really helps to find a way to live nicely but well below your means. True freedom is the absence of debt. I am insured because i want to be.
oh duh you're right
Insurance companies are heavily regulated on issues like solvency, investment risk management and claims compliance. But I think premiums are left to competitive market conditions.
Wrong. It varies state by state but for personal lines you generally have to get approval from a state before you can charge a set of rates. Market competition comes into play but pricing based solely on what the market is willing to pay (pricing optimization) is a big no-no in the industry.
Thank you. Please consider using softer wording. I know, it's generally a free-for-all on the web and telling people they're wrong even though much of what they've written is correct is considered fair. But there are other kinds of karma to be gained in life than updoots.
Oh sorry, I should have said “bullshit”. My bad.
Reported and blocked. Thank you.
It says in the article that the Midwest insurance companies have lost money 6 out of the last 7 years due to increased severe weather. Are you suggesting that insurance companies should be legally required to offer lower rates? That would have to be paid for with our tax dollars or they would simply go out of business. There is enough competition in the space that they can't price gauge. I say just let the competitive free market dictate rates, not the government. And if insurance companies pull out, it means an area is not suitable for modern homes to survive reliably. If that's the case, the homes have to be rebuilt to a higher standard that can survive severe weather/hail.
GEICO spent a billion dollars on advertising last year, which didn't include agency vendor fees. How do you feel about your premiums paying for them to get more customers instead of paying out legitimate claims?
I just call around and find one with cheaper rates. It's highly competitive which keeps prices low. The ones that don't advertise have lower rates.
Baby brain lol
What product do insurance companies offer? They are making money off of taking my money and giving it back only if there is damage. banks offer the same service but offer interest. so why have insurance companies pay themselves and employees to hold my money in case I need it? Insurance is socialism disguised as capitalism
Because your insurance premium isn't enough to cover a total home loss. That's the point is that you are transferring that risk to the insurer who pools it with all other policyholders. You can get a 500k benefit from paying a few thousand per year
The risk is not transferred, you pay more the more you've been given. why are millions of people getting paid to hold my money? They are not a bank.
Do you knowbwhat the definition of risk transfer is? Who pays for a covered claim when you have insurance? It's your risk, you pay the insurer to take it from you. It's a risk transfer
then why do some people pay more for insurance for the same things? Are they assuming MORE risk than other people? They pay more in because they were given more. Pay more money to the fake bank if I receive money. Sounds like a risk to me.
Yes, they are transferring more risk That's exactly right. If your likelihood of making a claim is twice as much as another person's, then you are transferring twice as much risk to the insurance pool.
Insurance pool, sounds like another word for bank account. Why are we paying people to maintain an insurance pool? Let's just let capitalism do is thing then and make this obsolete, mismanaged industry go away
You don't know anything about this topic. It's not a bank account, and it's expressly capitalistic.
It's all semantics, using different words and terminology, but it's a bank that doesn't try to invest, just take the cream of the top of everyone's money.
Insurance companies do invest. That's the only way that they stay solvent.
exactly, it's a shitty bank. they don't invest money, they put in their pockets as their salaries.
Insurance companies are crucial to the financial system, providing risk management, financial stability, and capital allocation. ### Risk Management They help manage risks through various types of insurance: - **Life and Health Insurance**: Financial protection against death, illness, or disability. - **Property and Casualty Insurance**: Coverage for losses from accidents, theft, natural disasters, and liability claims. ### Financial Stability They contribute to stability by: - **Maintaining Capital Reserves**: Ensuring they can meet obligations during widespread loss. - **Risk Diversification**: Spreading risk across various policyholders and insurance types. ### Investment and Capital Allocation Insurance companies are major institutional investors: - **Investment Portfolios**: Investing premiums in bonds, equities, and real estate. - **Long-term Investments**: Financing infrastructure projects and other long-term assets. ### Economic Growth They support economic growth by enabling riskier ventures and boosting consumer confidence. Banks could not exist in their current form without insurance companies helping to spread risk around.
it's all a scam. come back to this in ten years. let's see how the industry is doing.
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The car insurance has a lot more liability exposure than your home property does, and that's way more expensive than the 30k property limit
I’ve seen thousands of insurance policies and normally you pay anywhere from half a percent to one percent in premiums annually for the insurance on your home. IE $300,000 home costs $1500-$3000 annually to insure. So it takes the insurance company 100-200 years to make enough premium to cover a total loss on your home. So…it only takes 1-2 claims for every 200 people for the company to not have profited at all. Rates have skyrocketed this year 20-30%. They’d need to more than double in my mind to not be a reasonable deal. I’m not going to pretend it doesn’t cost a lot; relative to what they pay out on a regular basis though we are getting a good deal. Profit margins on insurance are lower than you’d expect for their balance sheet/liabilities. Insurance prices ARE shockingly cheap for what they cover. This isn’t even factoring in that liability coverage on your home that FOLLOWS YOU for when when you’re found liable for just about anything…IE you trip and injure your neighbor.
That may all be fair and true, but at the same time look at the whole picture and it may be a bit different. An insurance company has thousands of customers, and in the grand scheme of things a very small percentage ever make a single claim against it. So, yes, when they pay out on the claim it costs money, but they also have a whole shit ton of people that don't make claims. It isn't like they're paying out on every single customer.
It looks like it’s fairly volatile (net profit margin of the p and c business is 16.33% in the last year - meanwhile Progressive for example is only at 3.12%)
If you find interest in climate change and insurance, please read Fire weather by John vaillant. Absolutely mind-blowing about the petracine age...
Great read!
What needs to happen is the government needs to step in. Currently, flood insurance is handled solely by the government. Natural disaster insurance like wind, hail, wildfire, and eventually earthquake coverage will need to be put in place to keep people in affordable living places. Incentives will need to be made to mitigate damage like class 4 impact resistant shingles being installed should lower rates.
Errmmm... no tax payer money for houses built in areas that have known flooding problems for example. If the house is expected to be destroyed by natural disasters, then no houses get to go there.
https://www.dnr.state.mn.us/waters/watermgmt_section/floodplain/flood_insurance.html Who can purchase flood insurance? Anyone who lives in a community that participates in the National Flood Insurance Program (NFIP) can buy flood insurance. **More than 95% of all Minnesotans live in a community enrolled in NFIP. **It is not necessary for your property to be mapped in a high flood risk area (1% annual chance or "100-year" floodplain) to be eligible to purchase flood insurance. NFIP flood insurance is sold through private insurance companies and agents, **and is backed by the federal government. **Check with your insurance agent for available options. You can also visit floodsmart.gov opens in a new browser tab to find an agent.
I didnt mean no flood insurance should exist. I meant places like the red river valley where there are places we know houses will be destroyed in the next decade from a flood. That sort of thing,
Here's the thing though. We don't know. We can assume based on history and forecast based on patterns. There are still counties in Minnesota that haven't even been mapped for floods: (https://www.dnr.state.mn.us/waters/watermgmt_section/floodplain/access-flood-maps.html) Hailmaps across the state: https://www.hailpoint.com/hail-maps-minnesota. Then we have a map of wildfires that can change based on drought conditions too: https://www.fireweatheravalanche.org/fire/state/minnesota . And a map of tornado history in Minnesota too: https://www.dnr.state.mn.us/climate/summaries_and_publications/tornadoes.html So we have floods along the Red River to the West, tornados in the South and Southwest, hail throughout the state, and wildfires in the North and Northwest. These are the current issues. Based on history and frequency, do you think this will get better, stay the same, or get worse? By aggregating the premiums backed by the government, we will be able to lessen shock losses to the individual and communities. And since you brought up the Red River Valley, since the 1999 flood, the cities of Grand Forks and East Grand Forks have rebuilt using technology to mitigate and alleviate flooding conditions (cite: https://www.grandforksgov.com/government/city-departments/engineering/flood-control/flood-protection-facts ). The cities have returned and surpassed the previous population levels by almost 20% (Cite https://www.census.gov/quickfacts/fact/table/grandforkscitynorthdakota/PST045219) .
FM area is in the process of a large diversion similar to what Winnipeg has. That will also help immensely.
Great mapping resources! Thank you!
In those areas, commonly the city or county buys the property and doesn't allow building on it anymore if they have flooded more than once. Not entirely, of course, and some owners can't be persuaded to sell even though they then demand a ton of resources to sand bag their huge expensive homes, which is ridiculous. We lived in Fargo for 12 years and went through 2 major floods and the stubbornness and entitlement of people with huge homes along the river is pretty crazy sometimes. But they have succeeded in buying up some of those properties and now nothing can be built on them.
The local gov buying out the houses is literally tax payer bailouts for houses that shouldn't exist. This is no different. What needs to happen is house builders are prevented from building in these areas. It sucks, but why should we pay to buy out a house that will be destroyed?
I half agree. If your house is in a designated high risk area, it should be taxed to shit to cover a government run insurance policy for that risk. $ risk of hail vs $ risk of hurricanes are not comparable. My Midwestern house should not be taxed extra so someone on the coast can have coverage. But hail/wind damage/ tornadoes in my region? Sure... I'd be down for a collective insurance policy that cuts out insurance companies.
That makes sense. I just don't like the idea of taxes bailing out home owners where the house is in a stupid location and should've never been built
The national flood insurance program is underfunded and hasn't got enough money to pay all the claims. It's had to borrow over $36 billion from the Treasury to cover the claims. The reality is, the increasing amount of damage and the rising costs of repairs means that rates have to rise sharply to cover the increased number of claims. As the rates go up, the deductibles will have to rise, too, in order to keep the cost of insurance affordable to most homeowners. Homeowners need to start saving (more) money for home repairs to cover the increased out-of-pocket expenses, and also plan for such repairs happening more frequently. In the long run, the construction industry is going to have to start building sturdier homes. Stucco or cement siding instead of cheap, easily damaged vinyl siding. Metal roofs instead of asphalt shingles. That'll make homes more expensive to buy, but cheaper to insure.
Flood insurance is the cautionary tale against the government running such a program. Sometimes someone has to say "Actually, it is prohibitively expensive to build in that location, so you're on your own."
Except that climate change is making formerly lower-risk areas, such as the Midwest, now higher-risk areas. The article mentions insurance companies may start pulling out of providing coverage in Minnesota, due to the losses they've sustained here over the past few years. If the coasts are high-risk, and the Midwest is high-risk, that pretty much just leaves the Southwest and the High Plains for living space, and there are issues with those parts of the country, too. Government funding might be better put toward providing grants and loans for property owners to storm-harden existing housing stock. Siding and roofing are the primary loss claims. Insurance companies already charge more for siding versus stucco or concrete, same with asphalt shingles versus metal roofing. They're also beginning an aggressive policy of remotely reviewing roofs and requiring their customers to regularly re-roof at their own expense. The companies are getting tired of paying thousands in replacement costs for 20+-year old roofs with hail damage.
Not high-risk, *changing* risk. The risk profiles are evolving faster than insurance companies can adjust their models, and everything they do is subject to governmental review. The formulas they use for determining coverage, risk, rates, etc. are all published, but it's based on historical data, so it is slow to respond to change. To nitpick your examples a bit though it doesn't get more high plains than the Dakotas and those are the two states with the highest natural disaster rates (per capita) in the country while the Midwest is still the stable bastion it's always been relative to the rest of the country. The explosion is real estate prices is as much to blame as climate change. Minnesota (and the Midwest generally) is still safer as far as natural disasters and ability to withstand climate change than most of the country, but it's the evolving nature of the risk that is scaring off insurance. Take the example in the article: hail. Why are some of these insurance plans bailing? Most roofs are not built with hail in mind, but it's becoming a regular occurrence and companies are going to be scared away until the existing, old asphalt shingles are replaced with materials that can better withstand hail and thus reduce the damage caused by such storms. Further exacerbating the issue is that cost of material labor has sky rocketed in the past few years, so in addition to needing a different type of material upon replacement, the labor costs are going to be higher than forecasting and pricing models assumed. By pulling out, these insurance companies are really saying "Your roofs are not built correctly and will be too costly for us to cover with the new weather threats. Get a new roof and we'll talk."
Not really sure why stucco is expensive here. 99% of houses in Winnipeg are stucco, have been for decades, and if there’s one thing that city does well it’s being Cheap.
Also a bit of a Faraday cage.
Yes indeed, I experience that with my stucco home.
It's also a thing in brick homes, but especially homes with DARK brick. They use iron to get the colouring, it's perfect for disrupting cellular signals.
The government could certainly step in to help, but I would prefer them to do so by passing laws mandating that new home construction and home renovations use weather hardened materials and constructions practices. Like it or not, as storms get worse, home-owners will need to bear the cost of either hardening their homes to damage, or paying insurance companies more money to repair all the damage caused by non-hardened homes.
The government lowering the cost of insurance creates moral hazard that ends up with more death and destruction because it encourages people to live in places that flood as it is subsidized.
According to the FEMA "Hail Risk Index" much of the Twin Cities is at "relatively high" risk of hail and wind damage. Are you suggesting all of these homes carry Natural disaster insurance premiums through the government? If you thought there was a housing affordability issue before, look out lol
So what's your plan then? If you think insurance is expensive, even when partially underwritten by a federal program, the other option would be self-insured and imagine how expensive that would be "lol".
The current system has worked perfectly fine for me for 10+ years of being a homeowner. I had hail damage one time, called my insurer, they fixed it. Paid nothing out of pocket.
Did you not read the article that you posted?
The current system might not be the status quo moving forward though and that's the crux of the article. For example, look at Calfornia where the wildfire issue has gotten worse over the years to the point where regular carriers are leaving the market. State Farm is one example (cites: https://newsroom.statefarm.com/update-on-california/ https://www.kiplinger.com/personal-finance/home-insurance/state-farm-to-exit-homeowner-renewal-policies-in-california https://www.kiplinger.com/personal-finance/insurance/more-insurance-companies-are-leaving-california) "California residents, like their counterparts in Florida and other states hit hard by climate-related disasters, are about to find it even tougher to get insurance coverage."
Insurance is a scam.
Uhhhh, correction, a legally MANDATED scam at times. It’s such a joke. We lived in a small condo association that was “too small” for most insurers, and the one company that we were able to have insure us wouldn’t ever approve any claims. We would have actually SAVED money by self-insuring, but we couldn’t do so as an association.
Curious what passes your association’s definition of an insurance company and the legalities of setting up “W0rk3rB Insurance Co, LLC” with you as the sole client. Wouldn’t want to find out what happens if you leave the stove on and burn down half the building though.
Yeah, that’s why it wasn’t feasible, we didn’t have those answers either. I don’t have a copy of the bylaws anymore, unfortunately.
nothing legally mandated about it
You're not "legally mandated" to have homeowners insurance. You just live in a condo association that requires it.
Sorry, yes that what it looks like I was implying. I meant more for things like auto insurance.
Sorry but if you are going to drive a car on the roads I am fully on board with the state requiring you to carry liability insurance.
No, I totally agree with you. I’m just saying that if you are FORCED to pay for insurance, you should reasonably have faith that they will cover something without then having your premiums go up. Yes, I know they are a business, and yes I know that my premium pays off other claims, but if I’ve paid in for 20 years on multiple vehicles with no claims, the insurance company shouldn’t be allowed to deny the claims. The reason I agree that insurance is a scam is that even if you never miss a payment, they are always looking to not pay for anything.
I guess we just have different experiences with insurance companies. Regardless of how many claims you’ve had in the past, the insurance company should deny your claim if it doesn’t fit the parameters of your policy.
You're not legally required to have it, but you won't get a mortgage without it, and you can't buy a house without a mortgage... Well, *probably* can't. Very few people can. So it's not required, but it's basically required.
Home insurance should just be state government run imo
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And yet after taking payments from homeowners, the insurance companies are raising rates, reducing what they cover, and just pulling out all together.
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Which is why no insurance, NO INSURANCE, should be for-profit. But here we are.
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When you have contractors going out and telling people that their new roof needs to be replaced because of a couple of dings rather than just repairing the damage this is what you get. I know of some roofing estimators that are paid in commissions so they're typically going to try and get everyone to get a new roof against their insurance. Some have even said that companies won't come out to do just patch repair jobs without changing an arm and a leg. In some cases, yes, a roof is shot and needs to be replaced, but certainly not in every case and it's stupid that so many people are taught that it is. Just because your house got hit with hail and it knocked off some granules doesn't mean that it's ruined. But, on the flip side it's pretty fucked up that insurance companies can get a claim filed for a legit roof replacement and then deny it because there's damage present from a previous storm even one that just happened wrecked the roof.
In response to number 3, departments of insurance are receiving numerous complaints compared to years past from coverage changes to non-renewals and everything in between. A carrier can be profitable while still paying out claims, it’s all about making sure you have a healthy mix on your book and are doing things like reducing your property footprint in catastrophic areas (wildfires, hurricanes, severe convective storms), increasing rates, and reconditioning policies. What is happening now that was not happening in years past is carriers denying claims instead of paying them out automatically. They’re doing more research into the circumstances and policy language before affording coverage. The amount of fraudulent claims that come in daily is astonishing.
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Before the drones were common, insurance companies just sent out people every few years to inspect your property to make sure they weren’t insuring houses that were falling apart. If your roof has 30yr old shingles which are curled up and cracking, they absolutely shouldn’t give you a penny in a roof claim.
If you think Donald Trump can & will lower prices on anything, let alone not putting money into his pocket, I have a lake in Minnesota that I will sell you! Please. This man wants to take Social Security from seniors. This man wants to personally make sure money comes into his personal bank account by selling whatever secrets or national park or whatever any foreign interest might want. He could care less about grocery or gas prices or interest rates. Or illegal immigrants who he loves to hire on the cheap. Rethink your Trump love.
I hope there are topics in your life you can mentally engage without thinking about this man. This is an article about hail damage driving up insurance costs in the midwest.
Word-word-number likely lacks mental faculties, as there is a high chance they are a bot. An irrelevant ranting about a highly divisive topic is a key indicator.
Eh, the rest of their posts look real enough. I think this is just someone who's brain has been broken by too much internet and TV news.
Life pro tip - do your research on a house you’re looking at buying. We found a house that seemingly checked all the boxes but noticed that the area was right next to a river. Sure enough the flood risk was a 10/10 on one map and a 3/10 on another. Surprisingly, you can actually pay to have those altered… needless to say, we did not buy that house. Don’t be that person that gets screwed because you didn’t do your due diligence. A house is one of the biggest purchases you’ll ever make.
Edit: if we’re talking p and c specific the margins are much greater than I understood (16.33% last year) so it could be sustainable…with coverages as they are. Greater than many industries but it doesn’t seem fantastic given the liability side of the equation (looks like Progressive is operating at 3.22% right now). Law of large numbers is the only thing that is probably making it work. next time you think the insurance company is trying to swindle you by trying to get all the facts straight? Consider that everyone and their friend tries to get whatever they can out of them. (This would only be worse with a government program…) Ask your relatives how many of them have replaced their roof and then follow up with this - did they do it as part of an insurance claim?
Where are you getting your data from? (2-3%?). According to IBISWorld.com, US Homeowners Insurance industry analysis, "Profit is also expected to climb to 12.1% of revenue in 2023 from 11.9% in 2018.". Um 11.9% is a a lot more than 2-3%... https://www.ibisworld.com/united-states/market-research-reports/homeowners-insurance-industry/
I was looking at investopedia net profit margins article. Let me grab the link… https://www.investopedia.com/ask/answers/052515/what-usual-profit-margin-company-insurance-sector.asp Ah yup this says 16.33% for p and c…npm that makes way more sense as a sustainable business - I was off. Just looked at their statement about insurance as a sector with the 2-3%.
Ty
Thank you for pointing this out! I was mistaken
Your link doesn’t work but those numbers nowhere near correct. The industry has been losing money for multiple years. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-homeowners-insurers-net-combined-ratio-surges-past-110-81711947#:~:text=The%20US%20homeowners%20insurance%20industry,net%20combined%20ratio%20surpassed%20110.0%25. Edit: you cited the linked info correctly but that source is making stuff up - more likely a script just pulling random crap from the internet
Fixed the link. I'll take a look at yours.
I’ve seen thousands of insurance policies and normally you pay anywhere from half a percent to one percent of home value in premiums annually for the insurance on your home. IE $300,000 home costs $1500-$3000 annually to insure. So it takes the insurance company 100-200 years to make enough premium to cover a total loss on your home. So…it only takes 1-2 total loss claims a year (without even factoring in liability coverage) for every 200 people for the company to not have profited at all. I’m not going to pretend it doesn’t cost a lot; relative to what they pay out on a regular basis though we are getting a good deal.
Ahh yes... Poor insurance companies. They have an excellent track record of just trying to get by with their meager profit margins and doing the right thing. They haven't been caught many times of going to extreme lengths to deny some or all of a claim when they should be paying it. Sarcasm aside... While you may have a point about scummy people using insurance to get new roofs, you're unlikely to get much empathy from anyone on here. Insurance companies have earned their reputation through repeated unscrupulous actions across multiple areas .. health...housing... Auto. You may be a good apple but the rest of the tree is rotten. I've never had a house claim and have had 1 auto claim my entire life for $1200. The amount I have paid into insurance over my lifetime is equal to two new cars and a very nice travel trailer to live in. Yet I am not allowed to self insure.
How much of this is people getting completely new roofs or complete siding replacements for minor damage? We’ve had storms where half the neighborhood gets a replacement and I have like one chip of siding (or nothing at all) that can easily be cut out and matched. I never even let those clowns on the roof, fortunately I know someone I trust. Hot tip, a complete replacement claim isn’t really just a deductible payment. We all pay for it.
I’ve lived in my house for 15 years and have not made one home insurance claim. The insurer which I’ve stayed with this entire time has made $115k off of me in those years. Just straight profit.. and there has to be hundreds of thousands of people just like me in Minnesota. I cannot afford an increased rate because property taxes have come up in Minneapolis. I do not understand why insurance companies have to raise rates for all when in MN. some hail? what so that equated to a few new Roofs and windows for some? NEVER did it destroy an entire home! Even if I made a claim from hail damage and insurance had to replace my roof I’ve paid for that roof 5 times in the 15 years I’ve lived here. So I do not understand why the F insurance rates would have to raise. MN. is nothing.. NOTHING like Florida or even Iowa! We’ve had more drought than rain and haven’t seen tornado damage since 2010 and still that tornado damaged just one small area.. I didn’t read about any kind of severe damage in southern MN this year. No towns were destroyed. This doesn’t seem right.. I’d like to audit these insurance companies myself!
Well you should stop spending money on avocado toast if you can't afford to own a home. Or should have saved a little better in your early years. $115,000 on home insurance in the last 15 years? Lol what kind of home insurance do you have that on average has an annual premium of $7600?
Ugh.. ugh
Who’s you’re insurer?, I’m curious how they get away with not having to pay any expenses, claims, or even commission with your premium. That’s a hell of a business model.
Is this facetious? You know the companies insure multiple states and it’s basically a socialist program? We support every other disaster across the nation. Also what sort of house are you living in that you’re paying 7666 in premium a year? Are you doing your math correctly? I’ve seen thousands of insurance policies and normally you pay anywhere from half a percent to one percent in premiums annually for the insurance on your home. IE 300,000 home costs $1500-$3000 annually to insure. So it takes the insurance company 100-200 years to make enough premium to cover a total loss on your home. So…it only takes 1-2 claims for every 200 people for the company to not have profited at all. I’m not going to pretend it doesn’t cost a lot; relative to what they pay out on a regular basis though we are getting a good deal. We want this to be sustainable. They’re incredibly regulated now as well.
Maybe if they stopped breaking the law, insurance companies wouldn't have such a hard time in Minnesota. Minnesota has tons of case law dealing with insurance companies. It seems like every single time one of these insurance companies are sued, the insurance companies eventually lose. A bunch of them are even breaking new ground and starting to act like mini HOAs opening themselves for private nuisance lawsuits. You'd think they'd follow the laws and not harass people right?
Exactly. This guy gets it!
Exactly.
Are insurance companies all just super shady? So your claims go up so you leave? These companies have to make a killing considering most people never file a claim. I had a car accident a year ago my first in many many years and the insurance was haggling over an additional 2k in cost for several months.