We had a major hail storm and so of course the roofers are out in force. I asked my insurance agent about it and my deductible is $5000. WTF? Is that normal? It’s as much of a scam as health insurance. I don’t know how much it would be to repair hail damage but I have to still pull 5 bills out of my ass despite having insurance?
I feel like I’m getting screwed in the deal.
Home insurance deductibles are extremely flexible, and come with all sorts of options to reduce your premiums (at the expense of higher deductibles).
But yeah - you’ve got what you’ve got. The $250 deductibles come with much higher premiums, the “2% of total coverage” deductibles are much lower. I haven’t seen a home insurance quote that doesn’t come with several deductible options to choose from.
Yep, home insurance has gotten outrageous. Looking forward to selling and living overseas in rental condos for cheap.
Yeah, typically home insurance is for truly catastrophic outcomes. Things that would financially ruin you, like a serious fire or a truck plowing into your living room. It’s not meant to cover modest expenses. It’s not a savings reimbursement plan.
You can get a really low deductible but it would cost a lot more. And as I learned from some friendly industry insiders after a kitchen fire a few years ago, you will get dropped if you put in a couple claims, even if small.
If you look at what you saved by having a $5k deductible, you’re most likely ahead already even if you do have to shell out your own $5,000 to get the deductible covered.
It’s also something that has been going up over time. When I first got my policy 23 years ago, it was a $1000 deductible for the roof. Now, like yours it is $5000. They stopped offering the lower option without a prohibitive expense. Granted, it’s also a far greater increase than mere inflation, but we’re in a high-hail damage area, and of course, as climate change based weather intensifies, claims have been going up steadily.
Absolutely a screwed no matter what you do sort of thing though.
I’m sort of surprised you didn’t know what deductible you’ve been paying for, knowing how diligent you seem to be on financial matters. I go over my insurance every year with my agent looking for ways to reduce costs. Sadly, there isn’t much I can cut back on. Plus, I was also told not to file another claim unless it was truly unavoidable, because I filed twice in the last 10 years (first times ever after decades with the company), once for a grand, the other for a couple grand, and I was starting to look like like a bad customer.
About 10 years ago we had a massive hail storm, luckily we just had a few dings. Other areas weren’t so lucky, destroyed roofs, siding, windows, cars all covered by the popular insurance company. No problems, everyone was taken care of and happy.
Three months later another massive hail storm rolled through, hitting nearly the same area. Some houses hadn’t been repaired from the first storm when they were damaged again.
After that, the insurance deductible for hail was 1% of the homes value. Everything else is the normal $1k, just hail costs more.
Get a quote for a new roof. You’re really gonna be surprised.
The entire casualty insurance industry has been losing money for years due to underpricing the actual risks. Often forced to do so by state-level regulators.
Everywhere will be looking at premium increases and / or coverage decreases well above the rate of general inflation for years to come. Those coverage decreases usually come in the form of fussier exclusions and / or deductible increases, not in the form of dollar reductions in the stated policy maximums.
Which themselves need to go up (and thereby trigger more premium increases) to cover the ever increasing cost of building / rebuilding / repairing modern construction.
We’ve lived in a fools’ paradise of lossleader cheap insurance for 50-75 years now. The recovery to economic realism will not be pleasant.
Your insurance agent might be able to estimate your premiums for recent years with a lower deductible. My guess is that you save money over time with the premium set that high.
This.
In recent years, it seems I’ve heard more home and car owners speak of filing claims for what I would consider minor matters or normal wear and tear. Every time I hear that, I think, “Wait til you see your premiums next time you renew!”
I have no sympathy for the insurance industry, but I wonder how much consumer behavior contributes.
I can’t say if it’s different for different types of damage, but last week I had a tree fall on my house during a storm. So far the insurance is covering about 75% of the roof being replaced, a torn off eve, broken gutters/leaf guards and some water damaged stuff in my garage. My deductible is $1000. And like car insurance, if they decide to go after the neighbor (it was his tree), and collect from him or his insurance, I’ll get the deductible back.
Not sure how much behavior plays a part for home insurance (I know fraud and premium avoidance is a significant factor in auto rates) but I do know the increase in weather events is a large part of the increase. In 2024 there were more than $8 billion of weather related claims. Just the one hailstorm in Calgary cost $3 billion in claims.
Indeed. We moved to the UK some years ago and bought a house.
Our yearly house insurance here is equivalent to about $500 at current exchange rate.
We do still have a house in the US (my wife is a US citizen, and one of our daughters lives there).
But US insurance rates became so ridiculous that I refused to pay them. We just carry (much cheaper) liability insurance on the US house. Because there is always the possibility of someone coming at you with a nuisance lawsuit (actually happened about 10 years ago) where the potential expense is rather unlimited…
Mind you the US house is mortgage-free. If you have a mortgage, the financial industry has you over a barrel…
I have never used home insurance so I never even though about it. I didn’t even realize there were deductibles in home insurance. Total mea culpa.
Once you take investment income into account, I’m pretty sure property-casualty insurance hasn’t taken a loss in the US in at least 30 years. If you only look at underwriting profits/losses, they’ve been profitable six of the last ten years. Now, whether the return implied there matches the risk, I can’t say.
@LSLGuy lives in Florida, i believe…
Ah, if he’s only talking Florida, it’s a train wreck of broken promises, poor regulation, a shitty state-based market of effectively last resort, and undercapitalized, fly-by-night insurers. Good luck, I say.
One issue is our emergency fund got drained last year. I had a company offer to pay my deductible for my car with the cracked windshield and at least a dozen dents from the hail. Is it a thing that a roofer would offer to pay my deductible to repair my roof?
The second issue is how to get someone reliable that would be honest if my roof doesn’t need repaired. I don’t want to pay $5000 if the roofer’s goal is to defraud my insurance out of tens of thousands. Should I just go with the roofer they recommend for an inspection (if free)?
I think there’s a psychological and/or consumer training issue going on. I believe it’s safe to say that my parents, in their youth, would have considered any insurance (medical, home, auto) as a tool to cover catastrophic and financially ruinous losses only. Not a use-as-you-go tool. I think the change in the last couple of decades in health insurance has modified expectations; the idea that insurance will pay a significant of even mundane doctor visits and such. People are then surprised that fixing a small scrape on their car can have a really large impact on cumulative premiums vs eating the out of pocket cost to just fix the damage privately.