Don’t ask don’t tell, hanging at South Street

So yesterday I got a call from insurance agent’s office from a woman named Kim.  She wanted to go over my options for my soon to renew home owners insurance.  You may recall that I have had a bit of an ordeal dealing with my agent, getting very poor response to a request to make some changes to both my homeowner’s and auto insurance policies.  I am looking to save my money on my insurance costs as part of my overall slimming of expenses plan.

Well Kim gave me what the cost would be for the next policy year if I kept my coverages the same with Castle Key, which is another name for All State down here.  I almost shit my pants when she said it would be about $2200.  Castle Key had just raised my rates 30% last year.  To follow that up with another roughly 20% increase the following year is insanity.

When I commented to Kim about how ridiculous this sounded she said that all home owner insurance companies have been jacking their rates by similar percentages.  She cited some change in the way insurance companies need to guarantee they have funds available to insure in catastrophic circumstances (hurricanes).  Yea ok whatever, I have seen profit reports for insurance companies, I don’t care what excuse they provide, raising rates 50% in two years is insane.

So I told Kim I needed some alternatives.  I told her how I already asked about getting the replacement value of the home reduced.  She said they have some standard formula they go by which they won’t change unless you want to pay for an appraisal and even then they probably won’t reduce it.

She said for the coverage I was getting the Castle Key rate was competitive.  She gave me some quotes from other companies they represent, the best number was still just under 2K.  I told Kim I would call her back and let her know if I wanted to stay with Castle Key or pay less of an increase by going with one of the other companies.

I was very annoyed after I hung up the phone and vented to my buddy at work.  I asked him what his home owner’s insurance was.  He said he just renewed in March and his rate was less than $1200. WTF???!!  My buddy’s house is newer, bigger and worth significantly more money than my place, how could he be paying almost half of what I am being quoted??  I thought ALL insurance companies were raising their rates???

I asked him for some details about how he managed this.  He said he changed a few options that most insurance agents won’t even tell you are options. The first thing he did was waived the replacement value option for his personal property.  Basically what that means is if your house and everything in it is wiped out, you only get depreciated value for your items, not new replacement cost.

He also opted to exclude his pool cage from his policy.  Since pool cages are one of the most probable things to fail in a hurricane (as I know first hand), insurance companies will knock a good chunk off your policy if you are willing to exclude that from coverage.

Finally, my policy had an extra layer of cost because the house was built in 2001, before the latest and greatest building code changes were enacted. This coverage is called Ordinance and Law.  What it basically means is if some part of your house needs to be repaired/rebuilt and additional measures/costs are necessary to bring the structure up to current building codes/regulations this coverage handles that.  Otherwise you are on the hook for the difference.

Well I found all of this info very interesting and I immediately called Kim back since she didn’t present these coverages as optional.  I was a bit confused about how it all worked.

For example I said to her, suppose my house has damage, the roof needs to be replaced.  The repair cost is way under the 235,000 replacement value of the house.  If the repair includes upgrades to meet current code, would they  be covered?  Evidently not, regardless of what my replacement value for the home or personal property is, you would not be covered for code upgrades or replacement cost on personal property.

So I asked Kim to send me a few quotes from a few companies with various options.  Now all of  a sudden I had a price range that was $2200 at the high end and $1279 on the low end! Wow.

The $1279 quote would include the Law and Ordinance clause but would not include pool cage coverage or personal property replacement value.  The knee jerk reaction of course is just to take the lowest premium, especially in the cost cutting frenzy I find myself in.  I am rational enough to realize that doing so is rolling the dice that the house doesn’t blow up.  I feel pretty secure in that bet but it is a bit unsettling.

Regardless, I am annoyed that these options were not made readily available to me until I pulled teeth to pursue them.  Agents of course can hide behind the line that they are just looking out for their customers, making sure they are covered in the remote chance they are struck by a disaster.  Of course they can never admit that these options are in there primarily because they are huge money makers since it is a safe bet most homeowners will never utilize the extra security those add on’s offer at a stiff price.

Last night after the running club board meeting I once again headed over to South Street with a few board members to drink a few beers. Once again I stayed out very late for me on a Wednesday night.  I laid down in bed shortly after midnight.