4 ms·

$10k seems insane to me because you are almost certainly guaranteed to be out of pocket for things that your insurance won't cover. In my case I had an issue t

$10k seems insane to me because you are almost certainly guaranteed to be out of pocket for things that your insurance won't cover. In my case I had an issue that the HOA's master policy covered but my own HO6 didn't so there was zero loss of use coverage. Short-term furnished apartments run close to $7,000/month out here (typical minimum lease is three months), so even if you have a situation where your own insurance is providing loss of use coverage you're likely to blow through that pretty damn quickly. So, sure, you can absorb a ten thousand dollar deductible. Can you afford another twenty grand (or more) on top of that for some place to live while your home is repaired/rebuilt?

hedora 3y ago
Deductibles are fiction for home owners insurance in California. After each of the recent natural disasters, the permitting departments dragged their feet, causing years of delay before homeowners could rebuild. At the same time, the disaster created a construction labor shortage, and the price of construction increased 20-30% between the insurance payout and permit approvals. Stricter regulations are required. In particular, it should be illegal to block permits for equal or improved structures, and the insurance companies should be on the hook for the total cost of reconstruction/buying a new home up to the day the homeowner moves in (minus deductible).
Thorrez 3y ago
I don't understand. Are you saying a $10k deductible is bad? Why? Are you saying it's too high or too low? You mention problems due to things not covered by insurance. How would changing the deductible improve things there?
- inferiorhuman 3y ago
  $10,000 is way too high. For any given covered event the deductible is the amount of money you're on the hook for. What I'm saying is that for anything major you're likely already going to be out of pocket for thousands, perhaps tens of thousands of dollars in costs that your insurance company won't cover in addition to the deductible. Maybe you have ten grand to piss away on a deductible. Do you have twenty? Thirty? Living in a house with smoke damage while it gets repaired is significantly more harmful to your quality of life (especially if you're WFH) than driving a car with accident damage.
  - sokoloff 3y ago
    If you’re going to have the insurance for 50 years, expect to have 1 claim, and the difference in price between a $5K and a $10K deductible is $250/yr, which choice of deductible is “pissing away” more money?
    - inferiorhuman 3y ago
      If you can predict your claims why bother paying for insurance at all until you need it? We're both commenting on a post about an insurer that's bailing because they are having to pay out more than they can afford in the face of increased natural disasters. The most relevant information I could find claimed that the average Oregon homeowner makes a claim roughly once every nine years (or somewhere over five claims in your timeframe). So, yeah, a high deductible seems insane to me.
  - Thorrez 3y ago
    If you have $30k of expenses, and $10k are the deductible, you should try to fix the other $20k, since they're bigger. For example, try to buy a second insurance that will cover those other $20k, or switch to a different insurance company that will put the $20k in the covered category. Focusing on reducing the $10k deductible to e.g. $2k, but leaving the other $20k to remain seems like a backward strategy to me.
    - inferiorhuman 3y ago
      In my case I'm dealing with a condo, so no standard master policy nor any HO6 policy would cover loss of use. An umbrella policy might cover it, and you could certainly find something bespoke but it would hardly be worth the cost. For a single-family home I would've been covered but the amount of loss-of-use coverage is generally tied to the rest of the coverage you've got which is tied to the value of your home. With the cost of 'short term' housing (at least in the Bay Area) you're likely to blow through your limits pretty quick even if you ignore all of the other costs related to loss of use (commute, food, utilities, etc.). Keep in mind the vast majority of homeowners insurance policies aren't "we're going to make you whole", they're "we'll pay for certain, named events up to a dollar amount". The things that your carrier excludes are likely to be things that every other carrier in your state will exclude. Besides the bet that you'll save money with a $10,000 deductible falls apart once you make a second claim in fifty years. The best numbers I could find suggest that homeowners typically file a claim every 9–10 years. You've likely already blown through the projected savings by the second decade, by year fifty? The lower deductible would've been much cheaper.

hedora 3y ago

Deductibles are fiction for home owners insurance in California. After each of the recent natural disasters, the permitting departments dragged their feet, causing years of delay before homeowners could rebuild. At the same time, the disaster created a construction labor shortage, and the price of construction increased 20-30% between the insurance payout and permit approvals. Stricter regulations are required. In particular, it should be illegal to block permits for equal or improved structures, and the insurance companies should be on the hook for the total cost of reconstruction/buying a new home up to the day the homeowner moves in (minus deductible).

Thorrez 3y ago

I don't understand. Are you saying a $10k deductible is bad? Why? Are you saying it's too high or too low? You mention problems due to things not covered by insurance. How would changing the deductible improve things there?

inferiorhuman 3y ago
$10,000 is way too high. For any given covered event the deductible is the amount of money you're on the hook for. What I'm saying is that for anything major you're likely already going to be out of pocket for thousands, perhaps tens of thousands of dollars in costs that your insurance company won't cover in addition to the deductible. Maybe you have ten grand to piss away on a deductible. Do you have twenty? Thirty? Living in a house with smoke damage while it gets repaired is significantly more harmful to your quality of life (especially if you're WFH) than driving a car with accident damage.
- sokoloff 3y ago
  If you’re going to have the insurance for 50 years, expect to have 1 claim, and the difference in price between a $5K and a $10K deductible is $250/yr, which choice of deductible is “pissing away” more money?
  - inferiorhuman 3y ago
    If you can predict your claims why bother paying for insurance at all until you need it? We're both commenting on a post about an insurer that's bailing because they are having to pay out more than they can afford in the face of increased natural disasters. The most relevant information I could find claimed that the average Oregon homeowner makes a claim roughly once every nine years (or somewhere over five claims in your timeframe). So, yeah, a high deductible seems insane to me.
- Thorrez 3y ago
  If you have $30k of expenses, and $10k are the deductible, you should try to fix the other $20k, since they're bigger. For example, try to buy a second insurance that will cover those other $20k, or switch to a different insurance company that will put the $20k in the covered category. Focusing on reducing the $10k deductible to e.g. $2k, but leaving the other $20k to remain seems like a backward strategy to me.
  - inferiorhuman 3y ago
    In my case I'm dealing with a condo, so no standard master policy nor any HO6 policy would cover loss of use. An umbrella policy might cover it, and you could certainly find something bespoke but it would hardly be worth the cost. For a single-family home I would've been covered but the amount of loss-of-use coverage is generally tied to the rest of the coverage you've got which is tied to the value of your home. With the cost of 'short term' housing (at least in the Bay Area) you're likely to blow through your limits pretty quick even if you ignore all of the other costs related to loss of use (commute, food, utilities, etc.). Keep in mind the vast majority of homeowners insurance policies aren't "we're going to make you whole", they're "we'll pay for certain, named events up to a dollar amount". The things that your carrier excludes are likely to be things that every other carrier in your state will exclude. Besides the bet that you'll save money with a $10,000 deductible falls apart once you make a second claim in fifty years. The best numbers I could find suggest that homeowners typically file a claim every 9–10 years. You've likely already blown through the projected savings by the second decade, by year fifty? The lower deductible would've been much cheaper.