Home Insurance Rates - Are yours increasing dramatically?

[rld]

Now what happens if the stereo you purchased has inherently faulty controls? For instance, they neither allow you to turn the stereo off (disturbing your sleep) nor to hike it real loud (making your parties lame). No amount of fiddling with the controls will do much here. But a better analogy here is your neighbor has the stereo, and while you have some access to the controls (bash bash on wall, knock on door etc), ultimately your neighbor is calling the shots and he is really into high sound (big profits).

The "ideological" point of difference is clear here: is private sector profit motives inimical to the goal of government mandated services?

But we live in the real world, so I take your point that the no-fault system is so ripe for moral hazard problems (I know you know what I mean) that a fault system might be a fix for bad controls. But now what you have to answer is why a switch (!) to a tort/fault system will solve the problems partly generated by things like no-fault, given that no-fault is one of the measures thought to address the problems with fault systems! For instance, that in pure tort systems the ratio of compensation to economic loss declines as the severity of the injury increases. Small claimants abuse the system and get alot, and large claimants truly in need get screwed. The moral hazard problem of inflated claims affects fault systems too. Then there is the potential boondoggle of snide lawyers (is there another kind?!) eating up costs in proving fault claims, driving up overall costs.

Are your savings from fault systems due, for instance, to people taking less coverage and thus paying lower premiums to match the lower coverage? That sounds great until it is realized the less well off might get screwed in the process, having few options for affordable and adequate coverage. If the savings come from elsewhere, how?

I hope the tone of my response indicates I'm not bagging your argument. It's a healthy conversation.

I think it is a healthy conversation.

In your example you would have to take into account the massive disruption of destroying the jobs of the tens of thousands of people in the private insurance system, and the cost of building a state run system. None of which happens for free.

I know the controls can, and do work when adjusted properly, because I have been around when they were better adjusted and have an office just full of insurance data.

Lastly, I am confident that a move away from no fault would save money for two reasons. Thre first is that a system that imports liability has to reduce costs. Lets say that instead of no fault you brought in a system that gave the same benefits, just based on who was at fault for the accident. It here is 100% fault for each accident, and two people are injured in each accident, then you must cut the cost of each accident (on the benefits side which is the expensive side) at least in half by simply taking that step.

Secondly, the data is out there. When other jurisdictions have moved either to or from no fault costs go up for down. We can see what others have done and learn from it. Which is why this is not simply a philosphical problem.

 

[rld]

Rid, I find your responses on insurance pretty reasonable. But it is a conversation between us it seems, so I will let it go! But if you can point me to a study that discusses whether the lower premiums of fault systems, which I agree is supported by the data, is due to bifurcated packages and their rates of purchase, that would be appreciated. What I mean is whether the lower premiums on average is an artifact of lower premium but less coverage being taken by those unable to afford higher premium more coverage packages. I guess my point, which I am sure you can see, is the social justice point of what happens when something is mandated by Govt but supplied by private enterprise. If that supply burdens some disproportionately, then while on private enterprise terms one could say expensive tastes cannot be had by all (or some argument analogous to that for insurance), making it so for a product mandated by Govt is really to put the Govt in the hot-seat for making its own dollars at the expense of it's citizens. You're also right, by the way, that socializing insurance would not be a job plus enterprise. You are probably right that the control metaphor is the way to go, though the funny thing about such means is that we seem to be OK with keeping Govt fingers away until the whole thing collapses, at which point we beg Govt involvement!

I think your analysis is too black and white. It is not either or. In Ontario we have heavy government involvement in insurance. The product is designed by the government, while it it priced and produced by private industry, but the prices are heavily regulated.

I have copies of the studies myself, most of which I got through the AAJ and some Canadian consumers groups. I don't know if their websites have them up.

 

[james t kirk]

Just got my renewal for my home insurance.

Increased another $300.00 this year over last.

This is crazy.

 

[blackrock13]

Wait until the last series of investment losses in the stock market get passed onto you.

 

[K Douglas]

TD Meloche Monnex is one of the most competitive insurers so I wouldn't complain too much. I've been with Aviva/Pilot for years and all I can say is they are crooks. My auto insurance went up almost 20% because of 2 minor speeding tickets. My home insurance has gone up about 35% the past 2 years.

 

[james t kirk]

Wait until the last series of investment losses in the stock market get passed onto you.

Exactly correct. That's where they are getting hammered.

I just called them (poor guy who answered the phone).

I increaed my deductable from $500 to $2,000. and decreased my coverage from "Platinum" to "Gold"

In a nutshell - I have nothing worth stealing. I have no gold in the house, no jewelry, I don't own a watch.

If my roof leaks, I can fix it myself. Ditto the basement walls, or anything else. The only thing that wold not be good is sewer backup, and that I'm going to install a backflow preventor next year anyway. The only thing I'm worried about is:

1. Fire burning the place to the ground and

2. Liability.

I have no major assets in my home. Sure, they could steal my desktop - for what it's worth - about $20.00 on the market. I don't keep money in the house, nothing.

You want to know the best part - about 3 years ago, my premiums went from $600.00 to $800.00 and I called them up and they told me that they were adding a "water infiltration rider". In other words, should I leave a window open, or water were to come into the basemet through a crack, then voila, I was covered. I thought that I was already covered for that, but apparently not. So I bit the bullet. But I thought about it and I thought - fuck, I don't need that. I can fix any water leak myself.

I call them up today and tell them to delete that aspect of my coverage and it turns out in January of 2011, they elimintated (without telling me) that aspect of the policy - but did not reduce the rates accordingly.

I wonder if there is some government body that one could complain to about these kind of fraudulent business practices?

 

[shai]

My broker IS TD Meloche Monnex. They use "Security National" for all their insurance as far as I am aware.

I will give Desjardins a call, maybe others as well. Right now, supposedly I have the "Platinum Coverage" I could reduce it to "Gold coverage" and save 80 bucks a year.



TD Meloche is part of TD bank, same as security national. No independance

2 points driving things.

the cost to rebuild is going up faster than general inflation and this has been going on for more than a decade . Companies have only tried to catch up in the past 3 years.

Water damage to households is growing. A couple of the guys posting had large increases for this reason, as they're in areas that insurers have identified having a lot of water claims.

Solution

Raise your deductible to $1000
Be sure you insure your car and home through the same insurer
shop your renewal on a regular basis.
Don't make claims for cigarette burns to your carpet or other small trivia.

When you buy a home make sure your line to the sewer has a backflow valve.

 

[shai]

I think your analysis is too black and white. It is not either or. In Ontario we have heavy government involvement in insurance. The product is designed by the government, while it it priced and produced by private industry, but the prices are heavily regulated.

I have copies of the studies myself, most of which I got through the AAJ and some Canadian consumers groups. I don't know if their websites have them up.

Home insurance is not heavily regulated by the government, car insurance is

 

[james t kirk]

2 points driving things.

the cost to rebuild is going up faster than general inflation and this has been going on for more than a decade . Companies have only tried to catch up in the past 3 years.

Water damage to households is growing. A couple of the guys posting had large increases for this reason, as they're in areas that insurers have identified having a lot of water claims.

Actually, in the last 2 years or so, material prices for housing have decreased quite significantly and labour costs have been stable.

Insurers would like you to think that rebuilding costs have increased as justification for 30% increases in policy premiums, however, that simply is not the case.

Water damage claims - they won't pay for anything other than sewer backups. They will always find a way to blame a pre-existing condition or general wear and tear on your house rather than pay.

 

[sting]

I got a good quote from Desjardins so I signed with them. A few months into the new policy they had an inspector come and he found things that raised my premium. I went from $750 a year to $1100.

I was also told if I put on a new roof or replace my old furnace to let them know as this will bring down my rates. Well it didn't. I think they already know what they want to charge regardless of any other factors.

I might increase my deductible though and see if that lowers the premium.

 

[HOF]

J.T. Kirk,

Regardless of home ownership or rental insurance, the rates are continuously going up, and it just isn't right. I can only speak about a few areas that I know of. There are areas of Hamilton that people can't get home insurance or rental insurance because of flood zones due to old infrustructure and poor engineering. I would believe this to be true in many areas. I wonder what will happen to those in Goderich who have lost everything after a 0:00:12 tornado tore the town apart.

The old saying that the only thing is life that is for certain is death and taxes should now include and insurance rates, gasoline, food and so on.

 

[Madeline Rhodes]

http://www.kanetix.ca/ - For those wanting to shop around no matter what kind of insurance.. This can be of help. I used it when I went looking for car insurance years ago and never looked back. It was the best thing I could have done. It gave me information from 6 different places, and I could adjust information to resubmit the quote, etc.

Another thing is be aware of multi-car discounts which include any in the same house (and is not limited to same owners/drivers) that tie in with multi-policy discounts. Some have 15% off all cars insured and home or condo insurance. It's not much but it is enough to make a difference.