Homeowner's Insurance
September 29, 2004 8:10 PM   Subscribe

My wife and I are closing on a house in a week or so. The house is in the 120,000 range. Today, I started my search for homeowners insurance. My first quote from state farm was 1,500 a year. This is our first house, so we're in the dark. [MI]

Isn't that much higher than average? Shouldn't it be in the 500 a year range? Any idea what could make it so high (nothing is wrong with the house or land)? Anything I can do to bring it down? Any recommendations for insurance companies?
posted by justgary to Home & Garden (19 answers total)
Ouch that's a bit pricy. Hubby and I just closed on a house almost two weeks ago and our HO insurance ran somewhere between $500 - $600 with American Family Insurance for a house in the same price range in the Midwest. But we've got our cars insured with the same company too.
posted by tonelesscereal at 8:23 PM on September 29, 2004

Rates vary on so many factors, it's hard to determine if that's high or the norm for your region. For example, I own a condo in Dallas and pay a little less than the quote you received for your home.

State Farm and Farmers had stopped writing new policies for Texas when I was in the market due to the surge in claims for black mold, so I went through Geico and they wrote the policy with Travelers.

If it is of any benefit to you, I have had good service with the Geico/Travelers arrangement and the process was relatively painless i.e. no "Yes, we'll do that. Oh, no wait. We won't do that." etc.
posted by sillygit at 8:23 PM on September 29, 2004

I suggest employing an independent insurance agent.

Yeah, that was my next step.

But we've got our cars insured with the same company too.

They brought that up, but if we switched our cars to statefarm it would only bring it down to 1200.

Rates vary on so many factors, it's hard to determine if that's high or the norm for your region.

I live in nowhere alabama, and the house is pretty rural, so it's my guess it doesn't have to do with the area, though I am going to check other friends who live in the same area.

Geico/Travelers arrangement and the process was relatively painless

Thanks. I'll give them a call in the morning.
posted by justgary at 8:32 PM on September 29, 2004

Go to an independent agent. A State Farm agent can only sell you State Farm policies; an independent agent will find the best fit among multiple insurance companies.
posted by jjg at 8:33 PM on September 29, 2004

A trick I used when we bought our first house last year was to call multiple agents from the same firm like State Farm/AmFam/etc.

We settled on a State Farm policy from an agent who gave us a rate that was about half that of another SF agent who was less than 20 blocks away from the first. Could have been a fluke or glitch, but it worked for us.
posted by djc at 8:47 PM on September 29, 2004

I was paying less than that to insure a $300,000 home and its contents. That quote was definitely a ripoff.
posted by majick at 8:54 PM on September 29, 2004

Bought our house 2 years ago (~$125K); USAA bills us approx $480 per year.
posted by davidmsc at 9:38 PM on September 29, 2004

Thanks everyone. So I've learned our quote was extremely high, I'm going to try geico, and I need to try independent agencies.

It's a start. Thanks again.
posted by justgary at 9:47 PM on September 29, 2004

The house is in the 120,000 range.

*spits coffee all over monitor*
posted by squirrel at 1:38 AM on September 30, 2004

my house is roughly the same and we have roughly the same premium with State Farm. The last time, two years ago, I tried to shop it around other agents in my area could not beat it.
posted by busboy789 at 3:49 AM on September 30, 2004

I'm curious, as I'll be dealing with this at some point, but surely the premium depends on the coverage and what you can claim for? If the premium is higher, don't you get lower deductibles, and more things you can claim for in more circumstances? Or are you all talking about 'basic minimum' policies? I'm perfectly willing to believe however, based on my health insurance experiences, that agents will recommend what is good for them rather than for you.
posted by carter at 5:27 AM on September 30, 2004

I have a minimum + liability policy for my rural house/barn which is worth less than yours and my premium ranges between $800-1200 depending on what new things they are or are not covering [the new policy specifically disincludes not just acts of terrorism, but also mold!]. Rural insurance is sort of weird because one of the things that affects your rates are things like how far you are from the nearest hydrant/fire station, what the weather is like near you, whether there are other buildings attached to your house, etc. So, it can be all over the map. Calling around is, of course, your best bet. Also make sure you get an idea from your agent what the base level [i.e. minimum legal required] insurance is and what is extra "good idea" insurance. The bulk of my policy is liability that is not technically required but always a good idea when dealing with attractive nuisance properties like a big old barn. I'm with Co-operative Insurance Companies and they were no bullshit folks when my barn roof blew off in a hurricane. I still haven't paid in premiums what that roof cost them to replace.
posted by jessamyn at 5:44 AM on September 30, 2004

I want to echo the importance of talking to an independent insurance agent. Captive agents exist to sell you their company's coverage. Independent insurance agents exist to get you the best rate and the best coverage from any of dozens of carriers.

Remember, kids, you get what you pay for -- cheap insurance means that, when you need it, it may not be there. Hell, I'll sell you homeowners insurance for five dolla, if all you're looking for is a piece of paper. So do your homework. Make sure that your carrier is rated A or A+ (or, better still, A++) so that you know they have the money and the competence to back up that policy. Talk to the agent about what isn't covered. Make sure that you know the difference between replacement value or cash value and, if you opt for cash value, know what you're getting into. Find out at what value you need documentation and/or an inspection for line-item goods. Consider where you live and what sort of natural disasters (earthquakes, hurricanes, floods, volcanoes) you could be faced with -- get coverage accordingly. Find out if your coverage includes another place to live after your house burns down and, if so, for how long and to what value. Does the coverage include just theft of valuables, or loss, too? A good agent will not just answer all of these things, but will tell you the answers unprompted, along with all kinds of other great information.

You can find an independent agent on the Trusted Choice (Worst. Name. Ever.) website.

Finally, if you want the best coverage, get Chubb Masterpiece. There's nothing better.
posted by waldo at 7:59 AM on September 30, 2004

Again, thanks everyone one for your advice. I now know more about home insurance than I ever wanted to;)

Just to give the story a conclusion I went with geico.

They were very helpful and quoted me 700.00, which is still higher than the 300-500 I was hoping for, but half of statefarm's quote (it will go down some when we transfer our name to the security system and even more if we switch our vehicles to geico).

I did not check around for independent agents simply because I didn't have time. Looks like we close today. If I saved another 200 bucks (and didn't close today) we would lose it because of pushing our closing date back (tax stuff).

Next year, when everything has settled down I'll shop around for an independent agent (thanks for that link waldo) to try and get an even better deal.

Again thanks so much for the help.
posted by justgary at 9:15 AM on September 30, 2004

My house cost $350k, and I pay $700, through State Farm, in DC (I bet your house is bigger than mine, though that probably isn't a factor).

When I moved from rural Georgia to the DC suburbs, I didn't own a house yet, but my car insurance ended up costing 1/2 as much, for twice the coverage. Apparently, that's a factor of how strictly the insurance industry is regulated in those respective states. I wouldn't be surprised if the situation in AL is similar to that in GA.
posted by MrMoonPie at 10:04 AM on September 30, 2004

Make sure you are buying complete replacement coverage, and not just enough to pay off your loan. This is very important for your protection / piece of mind should some tragedy occur. Also, if you are willing to go with a higher deductible, that can result in some significant savings in your premiums.
posted by grateful at 12:18 PM on September 30, 2004

Peace. Peace of mind. Not piece.
posted by grateful at 12:20 PM on September 30, 2004

Hey, grateful, maybe you were just giving us a piece of your mind?
posted by shepd at 6:10 PM on September 30, 2004

Make sure you are buying complete replacement coverage, and not just enough to pay off your loan.

Thanks for the advice, and I did get complete replacement coverage.
posted by justgary at 10:49 PM on September 30, 2004

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