Storms continue like this things will not get better. So far not as many claims at work as I thought, so Des Moines metro maybe had less damage than more rural areas like Greenfield and Cambridge.
Property Insurance
- Thread starter FLYINGCYCLONE
- Start date
Interesting listen:
pca.st
The Possible Collapse of the U.S. Home Insurance System - The Daily
This is what the news should sound like. The biggest stories of our time, told by the best journalists in the world. Hosted by Michael Barbaro and Sabrina Tavernise. Twenty minutes a day, five days a week, ready by 6 a.m. Listen to this podcast in New York Times Audio, our new iOS app for news...
Thats just an excuse. We have always had storms and storm damage. There is maybe a slight increase in frequency but its all cyclical, just like we will have less some years.
The biggest issue is inflationary costs, it costs a lot more to repair damage today than it did 4 years ago, outside of that its just the push for higher profits.
Not true but everyone has the right to there own opinion. Yes increased cost are part of it but the State of Iowa has experienced the largest 5-10 insurance losses all time in terms of claim payouts in the last 5 years and frequency and severity of storms has increased. To think more frequent and more severe storms in Iowa has not happened is not wanting to accept the facts.
Seems like the last 3+ years are all very similar to the 15 year average....but yeah its easy to say there is some huge shift in the pattern, but just not so.
Matter of fact the last EF5 tornado in the US was more than 10 years ago. Weather is cyclical, always has been always will be.
For Iowa, it seams our trend has been basically average.
Or maybe you dont think it is caused by inflation and the fact that rebuilding costs from material and labor has skyrocketed in the last few years. If that is what you disagree with, I dont even know what to tell you.
In addition to increased building costs, the more complex automotive designs (sensors, cameras, materials) are rapidly increasing vehicle repair costs.
This data doesn't prove what you think it does. What is the correlation between number of tornadoes and claims paid out? A ridiculous amount of claims have been paid out for hail/derecho/etc. We are to the point that people basically neglect their roof and wait for hail to get a new one for the cost of their deductible. Now the insureds are repaying that bill.
My wife hit a turkey at 70 in my truck. The windshield was replaced and an area of approximately 1/2" X 1 1/2" on the A pillar had to be pulled. $5,600. Why? Aluminum body is harder to work with than steel. Just installing and calibrating the cameras in the rear view mirror was $1,300.
We get the
We have idea there is huge increases in some of these types of things, because of instant news and social media. We hear and see all the instant coverage of these events that 20+ years ago we did not see. So it gives the appearance of a huge increase, even when there isnt.
How people claim those events may be changing, but that also could be a result of massive cost increases from inflation etc rather than a large increase in severe weather.
When you replaced a roof and it cost $5k people were able to cover it, but now that it costs $40k for a new roof they will find a way to claim that if possible.
I havent seen too many insurance companies willing to pay full cost for a new roof when the old one is 25 years old. If you have an insurance adjustor that doesnt factor that in and is willing to pay to replace even a roof at the end of life expectancy I would love to know. I have had hail damage, and the adjustor said the roof was too old to cover. And every policy I have seen recently says lists the roof age etc for that reason.
The derecho was a once in a generation event that effected that large of an area. It also didnt prove there is an increase of severe weather, but it did cause a claim spike in Iowa, which was compounded by the very high inflation we have experienced.
What it proves is there is not some huge increase in severe weather, that people believe.
We have idea there is huge increases in some of these types of things, because of instant news and social media. We hear and see all the instant coverage of these events that 20+ years ago we did not see. So it gives the appearance of a huge increase, even when there isnt.
How people claim those events may be changing, but that also could be a result of massive cost increases from inflation etc rather than a large increase in severe weather.
When you replaced a roof and it cost $5k people were able to cover it, but now that it costs $40k for a new roof they will find a way to claim that if possible.
I havent seen too many insurance companies willing to pay full cost for a new roof when the old one is 25 years old. If you have an insurance adjustor that doesnt factor that in and is willing to pay to replace even a roof at the end of life expectancy I would love to know. I have had hail damage, and the adjustor said the roof was too old to cover. And every policy I have seen recently says lists the roof age etc for that reason.
The derecho was a once in a generation event that effected that large of an area. It also didnt prove there is an increase of severe weather, but it did cause a claim spike in Iowa, which was compounded by the very high inflation we have experienced.
Iowa is ranked 32th state in claimed/losses amount per year.
The only claim that Iowa is in the top ten for number of claims is for Hail. (8th)
Your added second point proves my initial point. It is the cost of parts and labor, ie. inflation that is causing the spike in insurance rates, not a huge extreme weather increase.
Iowa weather does not only include Tornados. Hail events and straight line weather events have been way more an issue than tornados.
Yes increased cost have also contributed but to think weather events have not been an issue is wrong.
Many companies, I would say most still cover roof replacement at replacement cost upto at least 15 years many 20 or more. That is changing and replacing roofs is a large issue in current premiums. But companies basically opening the check book for new roofs is a huge part of the problem. Also contractors have been an issue and none of that happens without weather issues. Increased events equal increased claims which cause increased payouts.
Can't have one without the other. Can't make a claim without a covered peril. Weather events as well as cost to repair are up.
I would love to see any documented list of hail reports in Iowa over a period of many years, that shows any real sustained increase in events, vs cyclical weather. I have looked and found nothing. Maybe you can share a source.
Yeah I have yet to see any insurance company willing to just open the checkbook and throw money at anyone or anything. Every insurance company I have ever worked with or my family has, has always been sure to pay as little as possible for as least as possible.
The increase in claim amount is akin to the cost of those claims more than it is about the number of claims.
The only anomaly really is the mass event that was the 2020 derecho, but that is a one off event, similar to a 100 year flood etc. It is a point in time not a trend. But with the spike in claims and the spike in costs at the same time caused the start of the issue.
The price of materials and labor has skyrocketed, way more than the number of claims or events. I have yet to see any proof that there has been a huge increase in any event over the historical average.
I used tornados because it was the quickest one and really the only one there is statistical and historical data readily available. But in reality the trend of tornados is going to follow other forms of major storms, including hail, wind and flooding.
The next year we have a year with a lot of flooding people will say "Oh my god, flooding has gotten so much worse and more often than ever in the past" When in reality you can look at precipitation and see its not true. There may be factors that cause flooding to be worse, but usually its just a cycle of the weather.
As you can see here, there may be some high spikes and low spikes but overall Precip generally has stayed the same.
Average Precipitation in Iowa by Year
www.extremeweatherwatch.com
Here is the average temp by year, Notice it has stayed in the same range and if there was a huge weather shift this would show a spike in temp either high or low, in the most recent years which is not the case.
Average Temperature in Iowa by Year
www.extremeweatherwatch.com
A look at the uncertain future of homeowners insurance in Minnesota
Each time the Midwest is hit with severe weather, the damage adds up and so do the insurance costs. In Talking Points, Esme Murphy explores how insurance companies are looking at how they can make up for all those payouts.
www.cbsnews.com
Admittedly, I dont know a ton about the insurance industry other than its a primarily state regulated industry and is driven by actuarial science.
No about inflation has been a driver in increased premiums but one would think inflation is something easily modeled by acturaries.
Something else is driving enough uncertainty in their modeling for insurance companies to pull from entire markets.
I know a family that bought a house with a roof at 26 years, then one hail storm and the roof had to be replaced in full at that time. Probably should’ve been ACV on that
2020 was a derecho-like catastrophic economic event. No one was modeling for that, and the Federal Reserve, which ostensibly exists to manage inflation via monetary policy, has repeatedly been wrong in their predictions. Actuaries are mathematicians, not soothsayers. And when past performance doesn’t align with current results, things can go sideways quickly (see: 2008 sub-prime mortgage debacle).
I'd like to see hail/wind events and their numbers over the years...and where they occurred. Over cities instead of farm land? We had a 2nd derecho in 2021 so 2020 isn't the only one to think of. Granted, 2021 wasn't as bad.
I know everyone and their dog is trying to get their roofs covered with hail/storm damage. Comes up quite a lot in the real estate world.
I know everyone and their dog is trying to get their roofs covered with hail/storm damage. Comes up quite a lot in the real estate world.
I think a lot of it is the increase in replacement insurance. I called a claims adjuster two years ago since everyone had them walking on their roofs. I had seen granular on the ground but the shingles were still effective although 19 years old. Adjuster came out and said he found damage and I got a new roof out of it. Just paid deductible.
Another problem is the claims process. Even with ACV, if they say you have 10% value left in the shingles (90% depleted) they will pay for 100% of everything but only 10% cost of the shingles. That honestly doesn't make sense to me. If you received 90% use of the shingles, you should have 90% use of the labor to remove and install them, 90% of the dumpster, 90% of the landfill. So if your roof costs 10k to replace, you should get a check back for 1k, but you will get a check for about 6k since they will pay 100% of everything but the shingles.
