Home Owner's Insurance
Great information I just received from our Insurance Partner at Brightway Insurance,
Reinsurance – Insurance carriers must carry insurance themselves and those costs have increased. If an insurance carrier has to pay more for their insurance of course those costs get passed onto the consumer thereby causing our insurance costs to increase. Think trickledown economics. Reinsurance for carriers has increased due to a millions of dollars of Storm, Roof, and Water claims, and Assignment of Benefits (AOB) abuses.
How does all of this impact you? Below are some quick bullet points to keep in mind.
- Buyers are going to pay more - ratings are going to be based on a home’s proximity to the coast, the age of the home, updates, insurance scoring, and what county a home is in. Insurance underwriting has gotten tighter with costs to match higher risk homes & counties.
- Older homes – More and more carries are restricting the age of the homes they are writing policies for. We are seeing some carriers not write policies for homes older than 2010 as an example.
- Roof condition – Many insurance carriers are not writing policies on homes with roofs older than 15 years. Those that are writing with older roofs are maxing at 20 years for Architectural Shingles and charging more.
- Insurance scoring – With the exception of some, many carriers are now factoring Insurance Score models into premium rates. Insurance scores take into account pay history, prior claims, etc. and can increase premiums by as much as $200 - $300.
- Citizens Insurance – The days of Citizens taking anything and anybody for low costs are gone for now. Along with everyone else, their underwriting guidelines have tightened given the higher volume of homes they are reviewing. Insurance costs have increased as well.
What we recommend doing.
- Set the expectation for buyers - Speaking through insurance costs with customers wanting to buy an older home with an older roof that sits within a mile of coastal waters is going to make that transaction easier and set realistic expectations with that buyer.
- What a Seller was paying isn’t an indication of what a new buyer will pay – A new home purchase is going to be rated based on current underwriting and premium rating. This means that a new buyer will likely pay higher premiums than what a seller was paying for the same coverage.
- Get a Wind Mitigation – Getting a Wind Mitigation can provide significant discounts on insurance premiums. Costs generally run $150 - $175.
- Work with an agency that knows the market – Getting a cancellation from an insurance carrier after a buyer has closed on their home because it never fit their guidelines to begin with isn’t a great experience. Work with a knowledgeable agency that knows where to place a home and who has a broad range of carriers to fit the uniqueness of that home.