California Homeowners Insurance Rates Increases

Posted on November 27, 2008

Is it any surprise that State Farm / Farmers is raising rates on California homeowner insurance ?  Yes, and no.  While gas prices have caused inflation around the board, this only makes things worse.  Sure, insurance companies need to raise prices to cover their costs, but at such a bad time?  Come on guys!

State Farm, Farmers to raise California homeowner insurance rates

Insurance Commissioner Steve Poizner’s decision is denounced by some, but others say recent wildfires make increases reasonable.

By Marc Lifsher
November 21, 2008

Reporting from Sacramento — As if plummeting real estate values weren’t enough, insurance rates are heading up for many California homeowners.

State Insurance Commissioner Steve Poizner late last month quietly approved rate-increase requests from two of the state’s three largest homeowner insurance companies. No. 1 State Farm Mutual got the go-ahead for a 6.9% increase, its first in five years, while rates at third-place Farmers Group Inc. will rise 4.1%.

A similar request for a 6.9% increase from No. 2 Allstate Corp. is pending at the state Department of Insurance. The three insurers cover about 2.5 million policyholders, more than half of the insured homes in California.

Some consumer advocates denounced the rate increases.

“In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible,” said Douglas Heller, executive director of Santa Monica-based Consumer Watchdog.

Others said they could understand why the commissioner granted the requests, given the hundreds of wildfires that have swept the state this year. “I think there is going to be a general perception out in the world that insurance companies are going to have to raise their rates,” said Amy Bach, executive director of United Policyholders in San Francisco.

Insurance claims from Southern California’s three most recent major wildfires, which damaged or destroyed more than 1,000 homes, could reach $800 million, according to AIR Worldwide, a Boston firm that estimates catastrophe damage.

Sometimes rate increases are appropriate, said Poizner spokesman Darrel Ng. “Unfortunately, insurance rates can’t keep decreasing forever,” he said. “Homeowners’ rates have gone down nearly $800 million since Poizner took office” in January 2007.

State Farm spokesman Bill Sirola said the rate hike was justified and was based largely on documented increases in the costs of repairing damaged structures as well as a rise in other types of claims covered by homeowner policies. Those other claims could arise from such disparate causes as a dog biting a mail carrier or a tree falling on a roof.

State Farm cut rates 6.2% in 2003 and 20% in 2007, Sirola said.

“They go up and they go down because our primary obligation is to make sure we’re generating enough revenues to pay our claims and put some money aside for future catastrophes,” he said.

Farmers, which cut its homeowner premiums 18% in 2006, said it asked for the higher rates partially to compensate for millions of dollars in claims paid to victims of Southern California wildfires over the last five years. Inflation in building material costs and labor are responsible for the bulk of the rate increase, said Steve Feely, Farmers’ senior vice president for California operations.

Most of the company’s 360,000 policyholders will see rate increases of zero to 3%, Feely said. About 1% living in fire-prone zones will see rates jump 20% or more, while about 27% will see their rates decline.

Consumer Watchdog, which unsuccessfully petitioned Poizner to hold a public hearing on the State Farm and Farmers requests, may ask the commissioner to reconsider his decisions.

State regulations require the commissioner to hold a public hearing when a request for a rate increase exceeds 7%. He has the discretion to waive a hearing when a proposed rate hike is less than 7%.

Lifsher is a Times staff writer.

At least they are doing one thing right–assigning the higher costs to those living in high risk areas.  Personally, I don’t like paying for other people’s bad decisions.  It’s just like my benefit of paying lower health insurance because I don’t smoke.

Understandably, without such rate increases, some companies might go bankrupt–but then again, not raising rates may help many homeowners not to go bankrupt either.

Oh, and don’t forget:  If you live in California, you may want to get a review of your insurance rates via this site, to see if you are really getting the best rates possible.  Stick it to the man!

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Why Do You Need House Insurance?

Posted on September 21, 2008

House insurance, often called home insurance or hazard insurance, covers a wide range of unforeseen events such as floods, theft, robbery, hurricane and vandalism. Homeowners can choose many different policies available from top insurance companies over the Internet. Each of these policies has specific standards to give coverage. Basic home insurance policies provide personal assurance protections, in cases of losses that happen to homeowner’s belongings, added living expenses or liability cover for accidents that happen with others’ assets.

Buying home coverage is vital for any homeowner. It is very important for anyone who has a home, whether the home is rented or owned. Home insurance polices and their costs differ among different insurers and depend on gross value of the home along with its contents.

Typically, insurers charge premiums depending on the risk involved in insuring the house and the odds of that event occurring. In states such as Florida where hurricane and floods happen very often, homeowners need to pay lump sums as premium to cover their property, as insurers are at a greater risk when insuring these properties.

Home Insurance Coverage:

House insurers’ policies offer coverage to all possessions such as the house, different house contents, goods lost during the incident or any damage due to regular use of the home. Generally, an insurance policy document contains basic details such as contents and essentials that individuals want to cover as a part of the coverage for their house.

Often, many homeowners choose to buy home-insurance policies to cover expenses for renovating their home. A good house insurance policy covers belongings in the house against damage and theft.

Now, homeowners can use the power of online search, to research a wide range of home insurance policy forms and get free online quotes. It is advisable to get at least five free online quotes from different companies to compare and make a good choice (see below for a great place to get them). Make certain to compare coverage and prices with the present home insurance policy. This may save a few dollars for an almost identical coverage amount.

It is very important to match house insurance coverage with personal needs. It is best to check insurance coverage at least every year, for emergencies such as making changes, reconstructing or placing a new roof. In addition, homeowners have to shop around and compare for best value deals for their home insurance needs, because home insurance rates can differ by hundreds of bucks from one company to the other for similar kinds of coverage.

Conclusion:

These days, insurers’ providers offer many additional benefits and services to homeowners such as free legal assistance and emergency assistance during emergencies.

Choose a house insurance company that has a good reputation in the home market. This helps because fraudulent activities are becoming more frequent and are common online, with respect to insurance claims. Thus, do not fall for such scams, always opt to go with a reputable company.

Moreover, always opt for those home insurance companies that have a reasonable premium amount and offer all the coverage you need. It is out there so why not get started right away with the form below.  [Source: ezinearticles.com]

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Mobile Home Insurance

Posted on August 22, 2008

To find a good mobile home insurance company requires a few simple steps. It is advisable to get a policy with more coverage even if it may cost a little more. The least expensive policy will often have the least amount of coverage so it is best to compare both price and coverage. There are 3 main things to look for when buying this type of insurance.

First, personal property or possessions: this includes furniture, clothing, electronics, appliances, etc. You should make a list of these as well as take photos. Keep both the list and photos off site in a safe deposit box.

Second, liability coverage – your assets: this pays for someone’s medical bills if they accidentally get hurt on your property and property damage expenses if you damage their property. It also pays legal fees and court costs. For liability there are options from $25,000 to $500,000.

Third, insurance on the mobile home itself and surrounding property: there are 2 types of this coverage. Replacement cost coverage pays to replace your mobile home after it has been destroyed. Actual cash value coverage pays to replace your home after it’s been destroyed, but only for its depreciated value.
Find a good policy that covers things like fire, storm damage, smoke damage, vandalism, explosions. Nothing is more disheartening than to have a natural or man-made disaster wipe out your home, only to find out it was not covered.

In your search be sure to get and compare quotes from 5 or more insurance sites. You can check out a company with the Better Business Bureau (BBB) for consumer response. You can also see its financial standing by checking with A.M. Best Co., Standards and Poor’s Insurance Rating Services, and Phelps Inc. Also, before you purchase a policy verify from you state’s department of insurance website that they are licensed to provide insurance in your state, and you can also check the company’s rating.

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Find home insurance

Posted on August 12, 2008

Where do people search most for home insurance?  Well, no matter where you live in the United States, home owners insurance is a necessary evil.  Without it, you risk losing your house, and even more in some cases (such as where a person is injured).  Here is a chart of how often home owners looking for home insurance by state (in 2008):

1. Florida
2. Mississippi
3. Louisiana
4. Texas
5. Georgia
6. Oklahoma
7. Arkansas
8. Tennessee
9. Alabama
10. North Carolina

Seems that Wyoming just doesn’t have that many houses :)  The only major shift in the last four years actually was from Louisiana to Wyoming.  As you might imagine, home insurance became a hot topic in the Louisiana area the after Katrina hurricane hit.  There were probably a lot more people looking for new carriers after they realized their coverage wasn’t as helpful as they had hoped.

In some upcoming posts, I will discuss some of these specific states and what makes them unique.

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What is homeowners insurance?

Posted on August 12, 2008

Home owners insurance protects the home owner from losses in the case of a disaster or other unexpected event.  It can be purchased from many insurance companies, and is a contract between you and that company.

In short, you pay a small monthly fee, and they protect you in times of need, as long as you still have the contract (are paying the insurance).  This is beneficial especially if a catastrophic event occurs.  You can never know if this might happen to your home.

Homeowners insurance also protects the tenants, and often times, those at the residence at the time of the incident; much like a car insurance policy works.

Eventually, we will cover topics such as how to shop for (or buy) homeowners insurance to best meet your needs, the types of insurance, coverage limits, and what you can really expect from your homeowners insurance company, and even rules and specific things to watch out for in specific states.

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