Home Insurance Increases

Major · 05-23-2024, 03:43 PM

Extreme weather and rising seas are not the reasons why insurers are raising rates and exiting certain areas. Statistically speaking, "extreme weather" events are less now than 30 years ago. Interesting, the most number of "extreme weather" events occurred in the late 1800s (between 1870 and 1900; however, they were not nearly as devastating for the reasons noted below). As far as rising seas, given that the world's elites are gobbling up oceanfront property, it is hard to see this as being a real concern.

In my discussions with an insurance expert, what has caused increased rates and exiting are 1) the density of population where these weather events tend to occur, 2) the increase value of properties in such areas, and 3) the costs of replacement, which have grown exponentially in the last 3+ years. For example, over the past 30 years, Florida's population has grown from 13,000,000 (1990) to 22,610,000 (2023), a 70+ % increase. As we know, and have known for a long time, hurricanes tend to hit Florida especially hard. Other southern states have grown as well. The quality and costs of homes in these areas has increased over that span too. Florida, for example, has an unbelievable number of high-end homes a/k/a mansions. And finally, as noted in this thread, construction costs have skyrocketed during that time.

Some people believe in "extreme weather" but it's not a real thing.

thinkxingu · 05-23-2024, 04:39 PM

Quote:

Originally Posted by Major

Extreme weather and rising seas are not the reasons why insurers are raising rates and exiting certain areas. Statistically speaking, "extreme weather" events are less now than 30 years ago. Interesting, the most number of "extreme weather" events occurred in the late 1800s (between 1870 and 1900; however, they were not nearly as devastating for the reasons noted below). As far as rising seas, given that the world's elites are gobbling up oceanfront property, it is hard to see this as being a real concern.

In my discussions with an insurance expert, what has caused increased rates and exiting are 1) the density of population where these weather events tend to occur, 2) the increase value of properties in such areas, and 3) the costs of replacement, which have grown exponentially in the last 3+ years. For example, over the past 30 years, Florida's population has grown from 13,000,000 (1990) to 22,610,000 (2023), a 70+ % increase. As we know, and have known for a long time, hurricanes tend to hit Florida especially hard. Other southern states have grown as well. The quality and costs of homes in these areas has increased over that span too. Florida, for example, has an unbelievable number of high-end homes a/k/a mansions. And finally, as noted in this thread, construction costs have skyrocketed during that time.

Some people believe in "extreme weather" but it's not a real thing.

Literally every single article I've ever read about insurance costs going up in Florida mentions weather and, as in this case—which is from Insurance Business Magazine—"extreme weather" events.

The issue in NH, of course, is less weather and more inflation/rebuilding and material costs, but, even then, there's clearly been more storm damage with all the rains we've had. I mean, whole towns in Vermont were shut down and Alton was an island for a few days last year, right?!

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John Mercier · 05-23-2024, 09:10 PM

It isn't even really material costs. Base material costs are pretty much universal. Base material costs have increased due to the demand on the system... but even a great deal portion of that has been labor costs.

A basic site built home in the area would cost around $400 per foot is the estimate. A basic factory built modular around $300. A basic factory built manufactured probably $100.

The site built uses local labor, the modular uses structured labor, and the manufactured uses structured labor in a lower cost labor market.

The labor plays the significant role.

A lower replacement value means a lower insurance cost.
Then they factor into the ''extreme weather event'' to determine how often they may have to pay out... even at that lower replacement cost.

tis · 05-24-2024, 04:23 AM

You forgot to add the cost of government regulations which I read in a trade magazine a few years ago was almost a third or almost $100,000 on a $300,000 house. Course it's hard to build a house for that anymore. This was according to the Builder's Assn.

hilltopper · 05-24-2024, 06:08 AM

After 17 claimless years my insurance company started coming up with ridiculous items I needed to fix on my property or they would drop me. I was forced to cancel the insurance before they dropped me and I had a cancellation notice attached to my name. I probably should have dropped them awhile ago as the insurance I picked up is (for now anyway) a lot less per month than I was paying.

upthesaukee · 05-24-2024, 06:41 AM

Insurance covers the losses of a "few" by the "many".

Back in the 1980s and 1990s, I worked for an insurance company branch office in Upstate NY that had branches nationwide.

In August of 1992, category 5 hurricane Andrew hit the Bahamas, Florida, and then continued through the Gulf of Mexico to Louisiana. My company had a branch office in Melbourne FL with around 90% of their business in the area around Miami and just south of Miami, including Homestead FL. The damage was catastrophic.

In the end, the losses incurred were outweighed tremendously by the cost to repair and replace, even with the reinsurance (catastrophic loss insurance) that we had. The end result was that the branches nationwide could not cover the damages incurred in FL and the resulting premium increases made the cost of our insurance totally uncompetitive. In the end, our company went out of business.

The point is that our homeowner rates increase not only because of the cost to repair covered losses, but also what has to be repaired due to uncovered losses, not the least of which is flood damage. Couple this with the severe weather we have seen over the past few years due to wind damage, snow and ice damage, etc. and the rates have been increased dramatically. Combined with the cost of materials and labor, the rates must be increased to keep pace.

Dave

tis · 05-24-2024, 06:49 AM

It is definitely getting to be a real problem for people. Auto insurance too. I will not be surprised if people who can (not required by bank or other) will decide not to carry it because they can't afford it.

Major · 05-24-2024, 08:03 AM

Thinkxingu, I believe it all depends on where you get your news. I am probably correct that you and I get our news from different sources.

That said, I've read many articles stating that the number of "extreme weather" events is actually less now than 30 years ago. Statistically speaking, "extreme weather" is not a thing. I think "extreme weather" is an extension of climate change promoted by the alarmists. To me, it's just weather.

However, not all is lost since I think there is a lot of common ground. Most of us who do not believe in climate change are not hell bent on destroying the planet. I think if we adopted more of a conservation and protection approach, we could go a long way to solving the problem. I read an article stating that 56% of young people aged 16-25 believe they are going to die from climate change. This is just foolish. The climate change message isn't working if this is the result. And the irony is that I see more trash on the road than ever, with all these people worried about fossil fuels. A softened approach of conservation and protecting the environment would be better.

Biggd · 05-24-2024, 08:34 AM

Quote:

Originally Posted by Major

Thinkxingu, I believe it all depends on where you get your news. I am probably correct that you and I get our news from different sources.

That said, I've read many articles stating that the number of "extreme weather" events is actually less now than 30 years ago. Statistically speaking, "extreme weather" is not a thing. I think "extreme weather" is an extension of climate change promoted by the alarmists. To me, it's just weather.

However, not all is lost since I think there is a lot of common ground. Most of us who do not believe in climate change are not hell bent on destroying the planet. I think if we adopted more of a conservation and protection approach, we could go a long way to solving the problem. I read an article stating that 56% of young people aged 16-25 believe they are going to die from climate change. This is just foolish. The climate change message isn't working if this is the result. And the irony is that I see more trash on the road than ever, with all these people worried about fossil fuels. A softened approach of conservation and protecting the environment would be better.

Yes, fake news is everywhere regardless of your political lean!
Everyone thinks their side is telling the truth, but all articles are slanted toward who their targeted audience is.

John Mercier · 05-24-2024, 11:05 AM

Quote:

Originally Posted by Major

Thinkxingu, I believe it all depends on where you get your news. I am probably correct that you and I get our news from different sources.

That said, I've read many articles stating that the number of "extreme weather" events is actually less now than 30 years ago. Statistically speaking, "extreme weather" is not a thing. I think "extreme weather" is an extension of climate change promoted by the alarmists. To me, it's just weather.

However, not all is lost since I think there is a lot of common ground. Most of us who do not believe in climate change are not hell bent on destroying the planet. I think if we adopted more of a conservation and protection approach, we could go a long way to solving the problem. I read an article stating that 56% of young people aged 16-25 believe they are going to die from climate change. This is just foolish. The climate change message isn't working if this is the result. And the irony is that I see more trash on the road than ever, with all these people worried about fossil fuels. A softened approach of conservation and protecting the environment would be better.

Insurance companies don't care what we call it, or what causes it. They use actuarial tables that get adjusted so that in the end the company stays profitable. An extreme event to them may just be based on a certain figure of dollars rather than any other measurement; or it may be the size of the claim area.

Major · 05-24-2024, 11:32 AM

Quote:

Originally Posted by John Mercier

Insurance companies don't care what we call it, or what causes it. They use actuarial tables that get adjusted so that in the end the company stays profitable. An extreme event to them may just be based on a certain figure of dollars rather than any other measurement; or it may be the size of the claim area.

John, I think you and I agree. One of the posts said that insurance companies are increasing or canceling insurance because of extreme weather. My point is that it is all about the math, including the density of insureds where are properties exposed to things like hurricanes and floods, the values of the insured properties, and the replacement costs. Much like life insurance, it is based on probability and statistics, and the statistics show a decrease in events, but huge increases in the densities, the values and replacement costs.

FlyingScot · 05-24-2024, 02:36 PM

Quote:

Originally Posted by Major

John, I think you and I agree. One of the posts said that insurance companies are increasing or canceling insurance because of extreme weather. My point is that it is all about the math, including the density of insureds where are properties exposed to things like hurricanes and floods, the values of the insured properties, and the replacement costs. Much like life insurance, it is based on probability and statistics, and the statistics show a decrease in events, but huge increases in the densities, the values and replacement costs.

You've stumped me again--I can never figure out if you are an actual New Hampshire human being or a Russian bot. But either way, there are about a million sources that show very clearly that extreme weather is on the rise. Within any reasonable parameters, it should not matter where you get your news on this particular issue.

For readers who believe NASA is reputable, here's one. But for folks who do not believe NASA is reputable, Google this yourself...just try to ignore stuff from Exxon Mobil, Vladimir Putin, and others with an obvious interest in sowing distrust

https://science.nasa.gov/earth/clima...nt-or-intense/

Major · 05-24-2024, 03:43 PM

Quote:

Originally Posted by FlyingScot

You've stumped me again--I can never figure out if you are an actual New Hampshire human being or a Russian bot. But either way, there are about a million sources that show very clearly that extreme weather is on the rise. Within any reasonable parameters, it should not matter where you get your news on this particular issue.

For readers who believe NASA is reputable, here's one. But for folks who do not believe NASA is reputable, Google this yourself...just try to ignore stuff from Exxon Mobil, Vladimir Putin, and others with an obvious interest in sowing distrust

https://science.nasa.gov/earth/clima...nt-or-intense/

Sorry, but NASA isn’t the same organization that it was when we were kids. NASA has a financial incentive to buy into this climate change hoax.

Plus, you don’t have a great track record when it comes to alarmists causes. You were 100% dead wrong about the Chinese flu.

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FlyingScot · 05-24-2024, 04:08 PM

Quote:

Originally Posted by Major

Sorry, but NASA isn’t the same organization that it was when we were kids. NASA has a financial incentive to buy into this climate change hoax.

Plus, you don’t have a great track record when it comes to alarmists causes. You were 100% dead wrong about the Chinese flu.

Sent from my iPhone using Tapatalk

More distraction from the topic...but I think everything I posted on COVID was correct, or close enough. Over a million Americans died, millions more were protected by vaccines. It was a terrible thing that could have been much worse.

But getting back to original programming on this thread--I encourage all to Google insurance rates, weather, and trends over time and expected into the future. This is a very serious economic issue for all.

John Mercier · 05-24-2024, 08:04 PM

Not sure what the extreme weather in this area would be... but mine seems to roughly track the increases in my property value... not quite but very close.

John Mercier · 05-24-2024, 11:00 AM

Quote:

Originally Posted by tis

You forgot to add the cost of government regulations which I read in a trade magazine a few years ago was almost a third or almost $100,000 on a $300,000 house. Course it's hard to build a house for that anymore. This was according to the Builder's Assn.

We don't really have a lot more government regulations than we did a decade ago. They slightly tightened the insulating requirement in our area... but a lot of builders were already beyond the specification, and the newest one just requires a change in the weather barrier that can actually be less expensive if the time to pull the correct material is chosen.
It had no effect on ICF or double-stud wall construction techniques.

The door codes are pretty much the same... except a fire door adds spring hinge requirement. The code for the windows didn't change... just the formula used to predict the performance level.

The manufactured homes made in other States almost meet that local code, and a small dollar upgrade of the weather barrier is all that is currently missing.
It is really just the variance in the labor.

05-24-2024, 06:41 AM	#6
upthesaukee Senior Member Join Date: Jan 2003 Location: Alton Bay Posts: 5,600 Blog Entries: 2 Thanks: 2,461 Thanked 1,983 Times in 1,083 Posts	Insurance Insurance covers the losses of a "few" by the "many". Back in the 1980s and 1990s, I worked for an insurance company branch office in Upstate NY that had branches nationwide. In August of 1992, category 5 hurricane Andrew hit the Bahamas, Florida, and then continued through the Gulf of Mexico to Louisiana. My company had a branch office in Melbourne FL with around 90% of their business in the area around Miami and just south of Miami, including Homestead FL. The damage was catastrophic. In the end, the losses incurred were outweighed tremendously by the cost to repair and replace, even with the reinsurance (catastrophic loss insurance) that we had. The end result was that the branches nationwide could not cover the damages incurred in FL and the resulting premium increases made the cost of our insurance totally uncompetitive. In the end, our company went out of business. The point is that our homeowner rates increase not only because of the cost to repair covered losses, but also what has to be repaired due to uncovered losses, not the least of which is flood damage. Couple this with the severe weather we have seen over the past few years due to wind damage, snow and ice damage, etc. and the rates have been increased dramatically. Combined with the cost of materials and labor, the rates must be increased to keep pace. Dave __________________ I Live Here... I am always UPTHESAUKEE !!!!

05-23-2024, 03:43 PM	#1
Major Senior Member Join Date: May 2013 Location: Laconia Posts: 1,080 Thanks: 446 Thanked 1,018 Times in 424 Posts	Extreme weather and rising seas are not the reasons why insurers are raising rates and exiting certain areas. Statistically speaking, "extreme weather" events are less now than 30 years ago. Interesting, the most number of "extreme weather" events occurred in the late 1800s (between 1870 and 1900; however, they were not nearly as devastating for the reasons noted below). As far as rising seas, given that the world's elites are gobbling up oceanfront property, it is hard to see this as being a real concern. In my discussions with an insurance expert, what has caused increased rates and exiting are 1) the density of population where these weather events tend to occur, 2) the increase value of properties in such areas, and 3) the costs of replacement, which have grown exponentially in the last 3+ years. For example, over the past 30 years, Florida's population has grown from 13,000,000 (1990) to 22,610,000 (2023), a 70+ % increase. As we know, and have known for a long time, hurricanes tend to hit Florida especially hard. Other southern states have grown as well. The quality and costs of homes in these areas has increased over that span too. Florida, for example, has an unbelievable number of high-end homes a/k/a mansions. And finally, as noted in this thread, construction costs have skyrocketed during that time. Some people believe in "extreme weather" but it's not a real thing.

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05-23-2024, 09:10 PM	#3
John Mercier Senior Member Join Date: Jun 2021 Posts: 3,399 Thanks: 3 Thanked 598 Times in 494 Posts	It isn't even really material costs. Base material costs are pretty much universal. Base material costs have increased due to the demand on the system... but even a great deal portion of that has been labor costs. A basic site built home in the area would cost around $400 per foot is the estimate. A basic factory built modular around $300. A basic factory built manufactured probably $100. The site built uses local labor, the modular uses structured labor, and the manufactured uses structured labor in a lower cost labor market. The labor plays the significant role. A lower replacement value means a lower insurance cost. Then they factor into the ''extreme weather event'' to determine how often they may have to pay out... even at that lower replacement cost.

05-24-2024, 04:23 AM	#4
tis Senior Member Join Date: Jan 2006 Posts: 6,742 Thanks: 752 Thanked 1,458 Times in 1,015 Posts	You forgot to add the cost of government regulations which I read in a trade magazine a few years ago was almost a third or almost $100,000 on a $300,000 house. Course it's hard to build a house for that anymore. This was according to the Builder's Assn.

05-24-2024, 06:08 AM	#5
hilltopper Senior Member Join Date: Feb 2007 Location: Meredith Posts: 727 Thanks: 25 Thanked 109 Times in 70 Posts	After 17 claimless years my insurance company started coming up with ridiculous items I needed to fix on my property or they would drop me. I was forced to cancel the insurance before they dropped me and I had a cancellation notice attached to my name. I probably should have dropped them awhile ago as the insurance I picked up is (for now anyway) a lot less per month than I was paying.

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05-24-2024, 06:49 AM	#7
tis Senior Member Join Date: Jan 2006 Posts: 6,742 Thanks: 752 Thanked 1,458 Times in 1,015 Posts	It is definitely getting to be a real problem for people. Auto insurance too. I will not be surprised if people who can (not required by bank or other) will decide not to carry it because they can't afford it.

05-24-2024, 08:03 AM	#8
Major Senior Member Join Date: May 2013 Location: Laconia Posts: 1,080 Thanks: 446 Thanked 1,018 Times in 424 Posts	Thinkxingu, I believe it all depends on where you get your news. I am probably correct that you and I get our news from different sources. That said, I've read many articles stating that the number of "extreme weather" events is actually less now than 30 years ago. Statistically speaking, "extreme weather" is not a thing. I think "extreme weather" is an extension of climate change promoted by the alarmists. To me, it's just weather. However, not all is lost since I think there is a lot of common ground. Most of us who do not believe in climate change are not hell bent on destroying the planet. I think if we adopted more of a conservation and protection approach, we could go a long way to solving the problem. I read an article stating that 56% of young people aged 16-25 believe they are going to die from climate change. This is just foolish. The climate change message isn't working if this is the result. And the irony is that I see more trash on the road than ever, with all these people worried about fossil fuels. A softened approach of conservation and protecting the environment would be better.

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05-24-2024, 08:04 PM	#15
John Mercier Senior Member Join Date: Jun 2021 Posts: 3,399 Thanks: 3 Thanked 598 Times in 494 Posts	Not sure what the extreme weather in this area would be... but mine seems to roughly track the increases in my property value... not quite but very close.