Question regarding Homeowners Insurance Increase - Allstate

[SirChadwick]

My wife and I just purchased our first home in Aug 2008 so we're still a little new to things.... please go easy on me here, as I'm just looking for opinions/advice. We received our property tax bill and it was around $1500. We have around $1200 in our escrow right now that will go towards the tax payment, leaving us $300 to pay to make up the difference. No biggie there, everything's a-ok. However, when looking at my escrow statement I noticed that our homeowners insurance has gone up from $489/yr to $731/yr. That is a 30% increase and is quite a hike. I called my agent to ask him why it went up and he said it was just a standard increase and could only offer us a slight discount (meaning about $30 off) if we choose to package our car insurance w/ it. We do not want to do that b/c our car insurance is low right now and switching to Allstate would be more out of pocket there. So why the 30% increase all of the sudden? Is anyone else going through this right now? Am I getting duped or missing something? I guess it's time to shop around to find a better rate. Luckily there is no penalty fee for canceling at this point.

Our home is 2,000 sq ft, and was 170k for reference. Thx in advance!

 

[PingSpike]

Gotta switch. I just dumped mine (and went to allstate actually) because of a similar increase.

 

[OCGuy]

Your impound account should not be short like that to pay taxes. You shouldnt have to come up with any additional money other than your monthly payments, unless your property taxes went up.

 

[DesiPower]

Keyword is switch. I switch every year. I have 2 cars and 2 homes, all of them start on the same day. So every year about a month before the policy ends I go to 3 to 4 different companies and get quotes, Evey year its a different company that gives me the best price. In the last few years I have been with GEICO, Nationwide, Statefarm, AAA and right now with Allstate.

 

[vi edit]

Welcome to the insurance game. Only way you'll save is to shop around. Allstate jacked my vehicle insurance rates by almost $200 a year this with no accidents or tickets in 10 years of driving with them. Went to Geico and saved almost $450 a year.

My former Allstate agent called me back about 2 months later and got me over $100 lower than Geico. He basically said it was a intentional game that insurance companies play. One year they target homeowners. The next year it's car insurance. He said the only way to save is jump ship after so many years of premium increases to bring it back down.

 

[SirChadwick]

Thanks for the replies guys. I guess I never realized insurance was a 'game' because I've had my car insurance w/ the same company for 10 years now and it's never gone up once. As a matter of fact, after I added my wife to the plan it even went down. Now we're paying $116.50 for full coverage on both of our vehicles per month. This homeowners insurance thing is just a thorn in my side... please recommend some good companies w/ reasonable rates. If I could get it back to around $500/yr that would be great.

 

[PingSpike]

Progressive and Geico both had online quote things for home owners when I looked so those are worth checking out just because its fairly easy. A co-op might be a good idea, I've never used one of those but they supposedly aren't beholden to a single company.

 

[bignateyk]

I use Geico 'cause they have that cool lizard dude.

 

[SirChadwick]

Interesting... I just went through a quote w/ State Farm and it came out to $1,000/yr for the same coverage that I have w/ Allstate currently. I'm assuming the online rate quotes are not very accurate? Because that's double what I was originally paying w/ Allstate.

 

[rudder]

Allstate... accident forgiveness my ass. Some lady pulled out in front of me and I rear ended her. I reported it (state law) and did not put in a claim and those bastards dropped me.

 

[DesiPower]

Allstate... accident forgiveness my ass. Some lady pulled out in front of me and I rear ended her. I reported it (state law) and did not put in a claim and those bastards dropped me.

what do you mean? they canceled your policy? for one accident?

 

[OCGuy]

lol @ reporting a non-injury accident that required no claims.

 

[sactoking]

Interesting... I just went through a quote w/ State Farm and it came out to $1,000/yr for the same coverage that I have w/ Allstate currently. I'm assuming the online rate quotes are not very accurate? Because that's double what I was originally paying w/ Allstate.

That's because rates for a geographic territory are calculated based primarily on loss history. If your insurer has a lot of losses somewhere, rates in that area go up for EVERYONE. It's quite possible that where you live, State Farm has suffered some rather large losses so they have higher rates than Allstate.

Contrary to many posters here, "the only way to save" is NOT by shopping around. In fact, many companies largest discounts are their loyalty discount. State Farm's discount for 3/5/10 year accident free is 15%/20%/25% (in many areas). Multicar might be 5%, multiline is 9%/16% (renters/homeowners).

In many cases people see a small rate increase (<10%) due to regional loss history and immediately bail on their company, often to save $25-50 per year. That's very shortsighted thinking since not only do they never get the best discounts (loyalty discounts) but companies (legally) charge higher premiums to people that frequently change insurers.

Each situation varies, but generally you're better getting quotes and changing your carrier every 5 years or so instead of every 6-12 months.