House Insurance Rising Question | TigerDroppings.com
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GeauxTGRZ
LSU Fan
PTal
Member since Oct 2005
3503 posts

House Insurance Rising Question

My insurance on my house has been rising since I bought it 3 years. I have it in my escrow.

My first year was $568
second year was $594
this year was $670

is this normal?

This post was edited on 3/4 at 9:22 pm



slinger1317
Louisiana
Member since Sep 2005
1939 posts

re: House Insurance Rising Question
Yeah unfortunately, rising rates are common. They usually aren't dramatic increases, but mine usually slowly rises each year.

It makes no sense, supposedly as the house gets older it is worth less, but somehow it costs more to insure it. What a fricking racket.


guttata
LSU Fan
prairieville
Member since Feb 2006
20383 posts

re: House Insurance Rising Question
I'd think as the house gets older, it probably appreciates and therefore it costs more to replace.


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Homesick Tiger
LSU Fan
Greenbrier, AR
Member since Nov 2006
16049 posts
Online

re: House Insurance Rising Question
My rule of thumb, I do some shopping around about every five years to look for a cheaper rate. Most times I can find insurance cheaper than what I have been paying. By the fifth year my insurance is usually five to six hundred dollars more expensive than when I bought it.

Homeowner's insurance is like most any other insurance. They give you a lowball figure for the first year or two to get you hooked and then the premium rises at a considerable rate.


TDsngumbo
LSU Fan
Member since Oct 2011
6868 posts
Online

re: House Insurance Rising Question
As your house gets older, it does appreciate in market value but insurance goes off of replacement value. The cost of supplies and material to rebuild your house, should you have a total loss, goes up with inflation. Therefore the replacement value of your home will usually always go up while the market value will fluctuate.
Also, as your home gets older, more and more shite is likely to happen. The fire risk increases gradually with each passing year since wiring and other things get older. Attic insulation that is fire resistant loses is resistancy (is that a word?) to fire over time. Basically, there is a liability increase over time as the house gets older. Remember, you pay for replacement as well as liability coverage.
Most companies will allow you to sort of lock in your replacement value so the cost doesn't go up as much. You probably want to call your company and ask if this is possible. They may make you sign a form stating that you want to keep your home insured for its current value and never allow it to increase (remember, this still may not prevent a future premium increase due to cost of liability coverage).
Whatever you do, do NOT insure your home for less than 80% of the estimated replacement cost. If you do, you insure it for actual cash value which is the value of your home minus depreciation. If you have a loss when you're covered for less than 80% of replacement cost then you are seriously fricked.
Some people want to insure their home for less than 80% of its replacement cost since it's "not worth that now". This is almost never the case. Market value is totally different than Replacement Cost.

This post was edited on 3/5 at 10:50 am


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TDsngumbo
LSU Fan
Member since Oct 2011
6868 posts
Online

re: House Insurance Rising Question
quote:

Homeowner's insurance is like most any other insurance. They give you a lowball figure for the first year or two to get you hooked and then the premium rises at a considerable rate.


Can't argue with you there


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Chad504boy
New Orleans Saints Fan
Greenbriar WV
Member since Feb 2005
90568 posts

re: House Insurance Rising Question
quote:

GeauxTGRZ
House Insurance Rising Question
My insurance on my house has been rising since I bought it 3 years. I have it in my escrow.

My first year was $568
second year was $594
this year was $670

is this normal?



where do you live?

value of your house?

has your Coverage A been increasing each year on your policy as well?


GFunk
LSU Fan
Denham Springs
Member since Feb 2011
10122 posts

re: House Insurance Rising Question
So homeowners reading this thread...When home valuations fluctuated and ended with many people underwater on their homes, did their corresponding policies reduce in terms of premium cost? If so, why did they not?


Chad504boy
New Orleans Saints Fan
Greenbriar WV
Member since Feb 2005
90568 posts

re: House Insurance Rising Question
quote:

If so, why did they not?



market values does not dictate replacement costs.


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