This one is a little bit longer but it is going to affect every homeowner. Times are changing in the insurance world... With recent payouts insurance companies have made due to hail storms in MN the insurance landscape is changing significantly. Now I don't know all the ins and outs but this is what I have gathered so far from a few agents I have talked to. I do not envy being an insurance agent in this landscape.
One of the biggest changes that are going to happen is going to be stricter underwriting guidelines and inspection requirements. Insurance companies have paid out record amounts in the last few years due to the amount of hail storms in MN. The weather events in MN are not the only driving factor, if you are insured by a national carrier you are also going to be paying for claims that happen around the country. These costs are spread throughout all their insureds. One of the most significant recent changes is if you have a home with a roof that is over 15 years old some companies may not even write a policy on your home without it being replaced first. That roof may have 15 years of good life left in it but it is more susceptible to hail damage with age. We are going in the direction of Florida, most insurance companies require a 4-point inspection before they will consider a home to be insured. This is an inspection of the four key components of the home, roof, electrical, plumbing & HVAC. If hazards or old equipment are found they may require repairs/upgrades before binding coverage. Components that have known issues may not be covered i.e. polybutylene supply plumbing. FPE electrical panels, knob and tube wiring, etc. Obviously, there are a lot of homes with systems that are over 20 years old. This may become a hurdle for many homeowners that leads to large expenses and it is something you have to comply with if you have a mortgage on your home, it is a requirement to carry homeowner's insurance.
Insurance companies are going to require evidence or documentation on many components of the home. This documentation can be done in a couple of different ways such as permit research or a 4-point inspection by a professional home inspector. We are now offering a 4-point inspection which can be a stand-alone product or added on to the home inspection at a reduced cost.
Without a doubt, we are going to see rising premiums. Heck, they have been rising for the past several years. I heard yesterday on the radio that MN used to be somewhere near the 30th most expensive state to insure a home, we have jumped to the prestigious 4th position. So what can be done about rising costs? It may be of benefit to try and find a regional insurance carrier that is not affected by claim events nationwide. If you had a recent roof replacement make sure you call the carrier afterward and inform them of the replacement. You would think that this notification would be automated by the insurance company but it is not. My mother just had her roof replaced, after calling in and notifying them they refunded her $650 of her premium! When replacing your roof consider paying some cash out of pocket and upgrading to a metal roof, there are many metal options from standing seam to stone-coated metal shingles that look great. These are more resistant to hail and will generally result in lower premiums. Make sure you are shopping around every 3-4 years, if you stick with one carrier you may see annual increases that outpace the rest of the market. Danielle Flenniken with Sentinel Insurance Group (https://mysentinels.com/) out of Rosemount MN provided some important renewal information which can be accessed at this pdf.
We are going to see some challenging times in the homeowner's insurance world in the coming years. I just received word that our personal insurance carrier Sercura pulled out of MN and we are going to be hunting for a new carrier before our renewal. It is real... If we can do anything to help you feel free to reach out.
If you have any topics or ideas you would like to see in a future edition of Homeowner Tidbits feel free to drop me an email at lfreng@inspectionwerx.com and as always "Get the best of US before your new home gets the best of YOU!
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(Due to conflict of interest and ethics requirements, we do not perform repair work on homes
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