Average cost of homeowners insurance in ft. Collins?
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I do insurance for a living. 1k for a home policy in Colorado is a good price. People always tend to hate insurance simply because they don't understand it. Think about your home for example. You say that 1k in premium is cow patty. Think about the other side of the equation for a second. You are out a thousand bucks but think about how much the insurance company can be out. Lets say a fire sweeps through your neighborhood and you have a total loss. If the replacement cost of your home is $275,000 then your insurance company is out $275,000. It doesn't stop there though. Typically you have 10% of dwelling coverage for other structures ($27,500) 70% for personal property ($192,500). Now you have no home and need to get another one built. Where are you going to stay? Your insurance policy will pay for your hotel until your new home is rebuilt (loss of use coverage). Lets say it takes 3 months to build you a new home and your hotel rooms costs $150 a day, now the insurance company is out another $13500.
So who is getting the better deal now, you paid $1,000 and in the above scenario just cost the insurance company over half a million dollars!! Most people say, it wont happen to me, my home is safe, I drive safe, I dont get sick, im low risk, etc (pertaining to all different lines of insurance). Fact is insurance is designed for the unforeseeable, the accidents, the unknowns.
Now to explain how premiums work so you understand cost associated with insurance. Insurance is what is called a pooled risk. Which basically means everyone in a risk area (Colorado for example) puts their money (insurance premium) in a pool. When a loss is sustained money is taken out of that pool to pay the loss. When the pool sustains large losses premiums go up to offset those losses. When the pool sustains a low amount of losses rates go down. Now some will say "but my rates never go down". Well look at the pool you are in. Colorado for example has sustained large losses these last 4 years with hail storms and wildfires, alas, a lot of money going out. But you say "why is my rate going up, they never paid me anything". True, but your "pool" has sustained losses which effect everyone in that pool unfortunately.
Insurance is a very very competitive market. I'm sure you see commercials on TV all the time for it. I promise you if a pool does not sustain huge losses rates go down, companies must remain competitive in a highly saturated market.
I hope that helps make sense of it all somewhat...
So who is getting the better deal now, you paid $1,000 and in the above scenario just cost the insurance company over half a million dollars!! Most people say, it wont happen to me, my home is safe, I drive safe, I dont get sick, im low risk, etc (pertaining to all different lines of insurance). Fact is insurance is designed for the unforeseeable, the accidents, the unknowns.
Now to explain how premiums work so you understand cost associated with insurance. Insurance is what is called a pooled risk. Which basically means everyone in a risk area (Colorado for example) puts their money (insurance premium) in a pool. When a loss is sustained money is taken out of that pool to pay the loss. When the pool sustains large losses premiums go up to offset those losses. When the pool sustains a low amount of losses rates go down. Now some will say "but my rates never go down". Well look at the pool you are in. Colorado for example has sustained large losses these last 4 years with hail storms and wildfires, alas, a lot of money going out. But you say "why is my rate going up, they never paid me anything". True, but your "pool" has sustained losses which effect everyone in that pool unfortunately.
Insurance is a very very competitive market. I'm sure you see commercials on TV all the time for it. I promise you if a pool does not sustain huge losses rates go down, companies must remain competitive in a highly saturated market.
I hope that helps make sense of it all somewhat...
Bigger pool, more spread out risk (California).
Also, Colorado has had HUGE losses due to hail storms the last 4 years in a row. In 2009 insurance companies paid out $767,000,000 in hail claims alone. In 2011 it was $804,000,000.
Earthquakes are devastating but they only really cause damage to property near the epicenter. Same with fires, even though they are devastating they typically are confined to one area. A hailstorm on the other hand blankets whole cities and causes damage to hundreds of thousands of homes and businesses while a fire and earthquake will only effect hundreds of properties and not thousands upon thousands.
High cost of living has no bearing on the cost of insurance and vandals are everywhere.
Also, Colorado has had HUGE losses due to hail storms the last 4 years in a row. In 2009 insurance companies paid out $767,000,000 in hail claims alone. In 2011 it was $804,000,000.
Earthquakes are devastating but they only really cause damage to property near the epicenter. Same with fires, even though they are devastating they typically are confined to one area. A hailstorm on the other hand blankets whole cities and causes damage to hundreds of thousands of homes and businesses while a fire and earthquake will only effect hundreds of properties and not thousands upon thousands.
High cost of living has no bearing on the cost of insurance and vandals are everywhere.
My insurance just dropped wind/hail coverage on my home without talking to me about it. It just showed up when I just happened to read over my renewal. So now my rate has gone up, because they have paid out claims in my area. I hate insurance companies...end short rant.
OP, $1k is normal for that price/size (assuming) home.
OP, $1k is normal for that price/size (assuming) home.
What you received is called a conditional renewal. Insurance companies are required by law to notify you in writing of any reduction in coverage at least 30 days prior to the reduction. Almost all companies notify you on your renewal. The insurance company itself didnt talk with you about it because they simply do not have the manpower to call millions of insureds on something like that. On the other hand, your agent, should have called this to discuss it with you. If he/she did not then I would consider looking into another agency. Losing win/hail as a covered peril is a huge reduction in coverage and should have been discussed with you by your agent.
Everyone hates insurance until they have a huge loss and use it, then most realize just how great of a product it is when its there. Imagine if you lost everything and didnt have insurance, what would you do then?
Everyone hates insurance until they have a huge loss and use it, then most realize just how great of a product it is when its there. Imagine if you lost everything and didnt have insurance, what would you do then?
