Wow, Minnesotans should feel very scared at this point. Right now, it looks like the companies will actually write a policy with old utilities, just charge more. They better be careful what they have opened up.
Here in California, with our wonderful commissioner that we have, the companies don’t worry about surcharging for old utilities, they just refuse to write a risk that isn’t updated.
Maybe that is what Mike Hatch wants. Less availability for homeowner’s. When will these bureaucrats ever learn.
In the agency I work for, the homeowner insurance carriers all use a tier when it comes to the age of the home. If it is an older home, most demand to know the updates and if the home has circuit breakers as well as the amperage of the breakers and the age of the roofing. Requiring this information is understandable. The companies we represent do not attach surcharges perse – just tiers them accordingly. Only those with low amperage (60) are not eligible for coverage for most of our carriers. This does not seem unreasonable to me. It allows time for the Insured to invest in a better electrical system protecting themselves in the long run and which isn’t terribly costly to the homeowner. I’d like to know the particulars of the State Farm system of surcharging to make a better determination of the fairness to the Insured’s or unfairness.
I don’t see where a direct surcharge or underwriting discriminates against minorities, elderly or the poor. I know some wealthy young families who have chosen to buy an older home due to the nostalgia of owning an older home. As we get older our health insurance and life insurance goes up, why would it not make sense for our home insurance to go up if we don’t do updates to the utilities.
In Texas, Allstate doesn’t have guides addressing ages of homes, or that they have to be updated. They have a 10 year new home discount, but other than that, they’ll write any age home as long as it passes a visual inspection.
Since MN required code upgrade as part of the replacement cost coverage it seems logical that homes with old utilities have a greater severity of loss and maybe a greater probability of a loss (IE running a modern home with turn of the century wiring and drop-cords).
Mr. Hatch is the former director of the MN Dept. of Comm. and also a candidate for any higher office. He knows that picking on insurers makes for better press than facing the facts that the laws of MN make the costs higher to the insurers and therefore the insureds.
If you were to ask a new homeowner when wiring, plumbing, electrical were updated, a vast majority have no idea. Most companies in Illinois don’t inspect unless value or a reunderwriting program requires it. The agent’s word and credibility are more often than not, the overriding factor. Whether or not companies admit it or not, redlining IS a fact of the business. As an agent and underwriter with direct and independent companies for over 30 years, I’ve seen it (and continue to see it) first hand. In theory, older utilities should be a legitimate factor underwriting concern. But my experience tells me this is just another in a long line of “opportunities” companies AND agents to discriminate against urban areas where black and brown people predominate.
Wow, Minnesotans should feel very scared at this point. Right now, it looks like the companies will actually write a policy with old utilities, just charge more. They better be careful what they have opened up.
Here in California, with our wonderful commissioner that we have, the companies don’t worry about surcharging for old utilities, they just refuse to write a risk that isn’t updated.
Maybe that is what Mike Hatch wants. Less availability for homeowner’s. When will these bureaucrats ever learn.
In the agency I work for, the homeowner insurance carriers all use a tier when it comes to the age of the home. If it is an older home, most demand to know the updates and if the home has circuit breakers as well as the amperage of the breakers and the age of the roofing. Requiring this information is understandable. The companies we represent do not attach surcharges perse – just tiers them accordingly. Only those with low amperage (60) are not eligible for coverage for most of our carriers. This does not seem unreasonable to me. It allows time for the Insured to invest in a better electrical system protecting themselves in the long run and which isn’t terribly costly to the homeowner. I’d like to know the particulars of the State Farm system of surcharging to make a better determination of the fairness to the Insured’s or unfairness.
I don’t see where a direct surcharge or underwriting discriminates against minorities, elderly or the poor. I know some wealthy young families who have chosen to buy an older home due to the nostalgia of owning an older home. As we get older our health insurance and life insurance goes up, why would it not make sense for our home insurance to go up if we don’t do updates to the utilities.
In Texas, Allstate doesn’t have guides addressing ages of homes, or that they have to be updated. They have a 10 year new home discount, but other than that, they’ll write any age home as long as it passes a visual inspection.
Since MN required code upgrade as part of the replacement cost coverage it seems logical that homes with old utilities have a greater severity of loss and maybe a greater probability of a loss (IE running a modern home with turn of the century wiring and drop-cords).
Mr. Hatch is the former director of the MN Dept. of Comm. and also a candidate for any higher office. He knows that picking on insurers makes for better press than facing the facts that the laws of MN make the costs higher to the insurers and therefore the insureds.
If you were to ask a new homeowner when wiring, plumbing, electrical were updated, a vast majority have no idea. Most companies in Illinois don’t inspect unless value or a reunderwriting program requires it. The agent’s word and credibility are more often than not, the overriding factor. Whether or not companies admit it or not, redlining IS a fact of the business. As an agent and underwriter with direct and independent companies for over 30 years, I’ve seen it (and continue to see it) first hand. In theory, older utilities should be a legitimate factor underwriting concern. But my experience tells me this is just another in a long line of “opportunities” companies AND agents to discriminate against urban areas where black and brown people predominate.
This is what the Bean Counters have done to the Insurance Industry. What happened to Risk Pools – Law of Large numbers??
No Risk Assessment, just make a Risk acceptable based on level of Premium Charged.
LG