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Discussion Starter #1 (Edited)
My home insurance premium notice arrived this week immediately following a letter from the insurance company justifying a 40% increase over last year. The primary reason cited is a hefty hike in 'base water coverage'. Apparently my postal code (in southwestern Ontario) is part of an area cited as being at greater risk for sewer back-up and sump-pump failure. The agent does not know how large this special and unique area is. Homes, now, I’m told, have exquisitely appointed basements that, when damaged, require astronomical claim settlements.

All available discounts are already applied. I raised my deductable last year. My credit rating is strong. The only option presented to me is to cut coverage. Also, I learned that my premium payment pays a portion of the ‘pot’ of funds for the industry. I’m so glad I can be of assistance!

I realize that carrying home insurance is imperative. It's just that a 40% hike for someone with a 37-year claims-free history with the same company seems unrealistic.

Are any of you also facing this sizeable increase? What approach are you taking?
 

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My boss has a $10,000 deductible on his home insurance. This is the fastest way to reduce your insurance premiums.

Of course, you have to cover all claims under $10K yourself. He actually has a special reserve fund he uses to do this - he sets aside money in a special account just to cover fixing or replacing anything under that level. :)

(You can actually read all about this approach in his latest book, Your Money Milestones.)
 

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Do you know if all insurance companies allow high deductibles? The one I'm with for home insurance (Bel-Air Direct) lets us have a deductible of just $1,000. I suppose I could call them and try again.

Yeah, our home and auto insurance rates are up significantly as well.
 

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I'm not aware of any company that will do this as a "routine" thing. In order to get this kind of reduced coverage, you need excellent negotiating skills.

But: I assure you it can be done, and it is the solution to high premiums. ;) (p.s. Works for car insurance, too.)
 

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I'm not aware of any company that will do this as a "routine" thing. In order to get this kind of reduced coverage, you need excellent negotiating skills.

But: I assure you it can be done, and it is the solution to high premiums. ;) (p.s. Works for car insurance, too.)
$10k deductible? I'd say that is more of an alternative to high premiums rather than a solution. That's big bucks... :)
 

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It's self-insurance. If you want, bank the difference between premiums and that is the 'premium' you pay to yourself to insure the risk.
 

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My home insurance rates went up 30% this year. They increased my coverage amount and added above water damage. I'm on the 5th floor of an apartment right now and declined the ground water coverage, even though they pushed it on my aggressively when I first signed up. So they added above water damage instead. Greedy insurance companies.

After phoning them, they rolled back the additional coverage that I didn't ask for.
 

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Wow. Yet another thing that tips the scales in favour of an apartment rental.

These prices are outrageous, to the point where these companies are pricing themselves out of the range that benefits the average person. Makes me wonder why we even need this. Sounds like the only ones with anything to gain anymore are the companies themselves.
 

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Our premiums went up as well - about 15%. I shopped around but could not find a better deal. We are with State Farm so I contacted our State Farm agent and she suggested we increase our deductible to $2k. This decreased the premium increase to $12 more for one year. She said this is the first year State Farm is allowing $2k deductibles.
 

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Discussion Starter #12
Thanks, everyone, for your responses. I've decided to pay this premium. Increasing my deductible to $2000 from $1000 would save about $27. Decreasing my coverage to say, $20,000 would also only save a small amount and would, obviously, limit my coverage. I can't get my head around how extensive the damage from a sewer back-up or sump-pump failure could be so I'm choosing to continue coverage for full replacement value. Since I've never claimed, the response of this company, in the case of potential claim, is an unknown entity; I'm trusting that it would 'come through'. I will only ever claim for catastrophic loss and I pray that never happens to me or anyone else. If I do ever claim, my claims-free deduction will be removed for five years. It's truly disheartening.
 

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These prices are outrageous, to the point where these companies are pricing themselves out of the range that benefits the average person. Makes me wonder why we even need this. Sounds like the only ones with anything to gain anymore are the companies themselves.
I'm sure there is some opportunistic pricing, but there are two important factors driving this which go beyond gain for the insurance companies

1) Claims escalation is real. Finished basements, fancy finishes in bathroom and kitchen etc - people spent like crazy (generally speaking) on home renos, so the cost of an event has increased. That needs to be paid. Frustrating for those who have not done so.

2) Investment losses. Economics of an insurance company involve bringing in premiums, building a reserve, investing the reserve, and from that paying claims and expenses. Just as individual investors and pension funds were hit with poor investment performance in the crisis, so were insurers, and that money needs to be made somewhere.
 

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About 9.5% increase, factoring out an increase due to an extra $1M umbrella liability coverage I added.

Probably less if I factor out an increase in coverage for weight of ice, snow, and above ground water that had a much lower coverage before, but its harder to isolate it.
 

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Jumping in late....
I got hit with a large increase in home and auto insurance this year, like most Ontario residents.
I believe I had started another thread on the subject, but specific for auto (that's where the biggest increase was).
I called and was told:
- there is absolutely no scope for negotiation
- they don't care if I leave (5+ year customer) and
- I won't have better luck at most other insurers if I move now (may save $5 or $10 but no more)

Finally, we walked through all the coverages I had and I decided to reduce the jewellery coverage and that saved about $7 a month.

Still, it sucks being hit by such an increase on top of everything else that's been going on in the economy since '08.
 

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Late as well! Just received our renewal for our homeowner's insurance. A 60% increase over last year. Yikes! We are in BC so the increases are here as well. They increased the total amount of coverage ie. cost of rebuilding quite a bit so that is part of it. Will contact them and let everyone know the result.
 

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Late as well! Just received our renewal for our homeowner's insurance. A 60% increase over last year. Yikes! We are in BC so the increases are here as well. They increased the total amount of coverage ie. cost of rebuilding quite a bit so that is part of it. Will contact them and let everyone know the result.
I received my notice of renewal and it's the same price as last year (within a few dollars)
 

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Discussion Starter #18 (Edited)
End of saga but I'm livid! I paid my home insurance premium this morning in person at my local office. I learned that my premium had been decreased by $18. Good news, right? The reason that the $18 had been included in my premium???? A "secret" surcharge levied by head office by mistake.

After speaking with agents in my local office numerous times and even a representative at the corporate headquarters, I was repeatedly told that the increase was entirely due to a high rate of water damage claims within my postal code and that the rate was justified and double-checked with the underwriter. There was never any disclosure about a "surcharge." The premium notice is not itemized so there's no way of discovering hidden charges. I appreciate that my local agents arranged a reduction but GEEZ!!! Talk about corporate bilking of loyal customers!!!

Anyway, the issue is over for this year. I'm just venting and hoping that my experience will encourage others to question and beware.
 

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I just got my State Farm home insurance bill and they want 43% more over last year. They have raised the replacement cost of the house by 13%. There are no other changes. I've found much cheaper insurance so will be changing companies...for the cars as well.

What a ripoff...after 20+ years with them!!!!
 

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I was waiting for this for a while dreading what the bottom read.....

Home Insurance (just celebrated our 1st anniversary in our first home) went up 50% (50.12%) from last year. I nearly sh*t a brick when I saw the number.

Called the company and actually got all the way up to the regional supervisor @ the Co-operators (whatever that means) when I told them I was going to write a post on my blog about this ripoff. They quoted an "unusual amount of claims from my area in the past 12 months" but couldn't give me any information, data or a source for any of this.

I'm gonna write a post for sure now....who wants to help contribute? :)

What really sucks is from what I hear there's not a whole lot anyone can do because all of these companies increased their rates together.....robbery. And I can't even invest directly into many of them to get a dividend for my financial pain!
 
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