As title says, I live in an 1860's-built Victorian Italianate Colonial. Bought just before COVID at a much lower price but value then skyrocketed.
Used to have Liberty Mutual bundled with auto, but unfortunately wife spun out on an icy patch and did juuuuust enough damage to get the truck totaled at which point Liberty axed our policy.
That led to a long string of woes. We switched to Arbella Insurance because they quoted a good rate. But then they came out and said we had to "fix" a wall on our house…on a barn. That is unheated, unfinished, dirt floor. A wall that has stood since 1860 with no problems, but they didn't like that some of the clapboards were uneven.
At the time, we thought if we didn't do it, they'd cancel our policy, and a cancelled policy meant immediately losing your mortgage and we'd be homeless, so we "fixed" the wall. Cost us $11,000. Horrible. Should have just kept Liberty without the bundled auto.
But then on top of all of that mess, Arbella also jacked our rates up like $900 more than initially quoted with no explanation.
So after a year with them, we "shopped around" because that's the conventional wisdom. We ended up going with Rate Insurance as the broker (I think I'm using the right industry jargon but I'm a dummy so maybe not) and the agent there got us a quote from Progressive for auto and Homesite for homeowners.
Well, Homesite sends out an assessor and she does a number of ridiculous things (listed a hammock with a cover over it as a "boat or RV on premises" for example) but said basically we had to replace the roof or they would cancel our insurance. We said what's wrong with the roof, it's a corrugated tin roof in fine working order. They said they didn't like that it was "discolored".
So again, we were terrified we'd lose our house and also furious we were in this situation again. So because we thought we had no other option, we took out a home equity loan to get a new roof put on.
But Homesite didn't like that the roofer couldn't do it until early winter of last year and completely terminated our insurance without telling us they were going to do so AFTER telling us they would grant us an extension to get the roof on (!!!). I only found out about it because when I went to apply for the loan and they asked for info on my current insurance policy, upon calling Homesite they told me I didn't have a policy (!!!!!!!!!).
So we scrambled to get some coverage last minute and ended up with Safeco, got the loan, got the roof on, and are insured (thank god), but as I said in the title line we're paying $4,996/year for this insurance which is insanely too much.
I'm in Massachusetts, and every insurance company or agent I've spoken with says you HAVE to insure the house for "replacement cost", you're not allowed to insure it for the value of the home. And they quote the replacement value of my house as somewhere between $1.1million and $1.4million. +/- $300k is a hell of an error bar!!! We bought the home at $418k and it's since ballooned to $660k or so in value because of housing market chicanery.
$4,996/year is absolutely bleeding me to death. I don't want to lose my house, but I also don't want to keep that high of an insurance rate. It feels like I'm getting screwed here and I'd like to find a way to stop getting screwed.
Any of you knowledgeable about Mass insurance? Is it true I HAVE to insure at replacement value? It's such an old home that it CAN'T be replaced: there's nobody offering timbers and flooring in the dimensions that are in this house, so to me it's b.s. to say it's a "replacement" value anyway because they'd be replacing it with dimensional lumber which is not 1:1. Is there any way I can get insurance at just the value of the home?
I tried upping my deductibles from $2,500 all the way to $,7500 and it literally only reduced the cost of the insurance product by $171/year so I didn't even go through with it because it seems idiotic to accept triple the liability for $171 savings per year. So like 95% of the cost here is the alleged replacement cost of the house.
I have friends with houses that are about as big and have similar amenities and they are paying half of what I pay. Part of the problem I'm having is a good many insurance companies in Mass just say "Oh, we won't insure a house that old" and a good many others say "Oh, we won't insure a house valued at more than $500,000" and like…it wasn't when I bought it, jesus!!!
Is there any hope for me or are my options to either a. suck it up or b. sell it?
Edit: Adding a follow up question — given that any time you change insurance, the new company has carte blanche for like 90 days to send someone to your house and just decide arbitrarily they want you to make a devastatingly expensive upgrade to your house or they'll kick you into a gutter, how can I ever have any confidence when "shopping around" again? Like I shudder to think what's next.
Trying to get cost of homeowners insurance down, currently at $4,996/year for an 1860 colonial in very good condition/well-maintained
byu/NotACommunistBurner inInsurance
Posted by NotACommunistBurner
5 Comments
If you consider less than 1% of the home’s value too high and “bleeding you dry” for insurance you should probably sell.
As people say in the auto insurance industry, “if you can’t afford the insurance, you can’t afford the car.”
Old big homes have gigantic replacement costs.
The carriers that don’t force you to insure to replacement cost cost much more per thousand for worse coverage. That is, you will pay about the same with them, and be covered poorly.
There is no secret to be shared. Shop around and take the highest deductible you can tolerate. That’s it.
Every new carrier will do an inspection of your home, given the age and replacement cost. They will probably find something they don’t like and force you to fix it.
Have you tried State Farm?
It sounds like you are going mostly with companies you can shop for yourself. Find a good independent agent near you. One that comes out to your house themselves, and can look for anything they think their company will flag. Each company has specific things they are more sensitive to than others. An agent isn’t gonna bother placing your policy with a company that is just going to cancel it, too much work for zero gain.
Yes, you’re going to have to insure it for replacement cost. You could, in theory, get an agreed value or actual cash value policy, but the base rates on those are higher, so you end up with less coverage for roughly the same money.
You’re really paying for the base rates. The +/- 300K is a factor, but not the largest factor. Also, the vast majority of states, and I don’t agree with it, but it is a thing, base your insurance rates on your credit score. They call it an ‘insurance score’, but its basically the same thing. So if you’re struggling a little right now in this economy, that may be coming into play.
Once you get a company with a reasonable price that you like, don’t shop. Put your head down, pay the premium, don’t blink, don’t do anything that might get them to re-underwrite your policy. This insurance market is rough.
MA insurance here — the reason they do it at replacement value is because they’re covering you at the cost to replace the home with today’s materials, they’re not insuring the value of what your house would be worth listing it on the market.
Unfortunately, I have to say I hate when I deal with home inspection related things because these companies are freakin’ sticklers. I have had numerous instances of people having the most minimal of things be a required issue to fix. Usually most companies will issue a nonrenewal, but depending on the length with a company they can issue it needs to be done within a much quicker time period.
It’s sad bc reading your post I genuinely feel you bc that is exactly how it goes. Would probably be more productive for both to inspect the home prior to writing a policy that you’ll threaten to cancel a month later if the 1 flake of dust on your roof isn’t gone type-of-thing. I get both ends of it, lol. But dang what are you on the water? that’s still a bit pricey sounding.