Insurance and Taxes

[Professor Fate]

Thought I'd start something in OT to keep the other forum clear of my disgust..... there's a good thread developing but I did t want to violate content rules....
My homeowners policy has doubled in 6 yrs.
My property tax (poverty tax) has also doubled from $4200 to $8000+.
Groceries are up by 30%-40% or more.
I don't know how much longer we're going to wait and try and sell and downsize, and move to a less costly area to live. My 60's start with the next birthday. Things are changing....
You work hard all your life only to have inflation and Taxes poison your retirement dream...
Terrible

[Professor Fate]

I wanted to do a few things on my T's but have held off. Haven't wanted to spend the money
..

[Norman Kling]

My property tax has been cancelled. I live in a fire prone area of California. Have lived here in the same house for over 50 years and even had a fire come 100' from the house in 2003. So I will try to find a company which will insure me. At least we don't have any mortgage, so if it burns down all we will lose is our life possessions but won't have to pay off a mortgage which does not exist. The companies could just raise the rates to cover the cost of inflation, however, the state regulates when and how much the rates can raise.
Similarly our son lost his car insurance.
Norm

[Professor Fate]

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[1925 Touring]

Car insurance doubled for me just in the past 6 months... so much for saving up for my T and T related activities...

[ironhorse]

I thought about downsizing after my wife passed, but with the combination of property values around here going through roof (thanks flippers) and the save our homes tax initiative and only a portion of it being portable if I say downsize from my 2700 sq ft 4 bedroom to a 1500 sq foot 2 bedroom I would pay about $1000 more a year in taxes, my mortgage was retired a couple of years ago. Looks like I will be forced to stay here!

[modeltspaz]

Norm,

Your property taxes have been canceled?!?!?

Is this a new incentive by California Govenor Neusance to coax all the people and businesses that have fled California to come back?

Sorry, Norm. I couldn't help myself when I saw your typo.

Mike.

[Norman Kling]

The property taxes were kept low because of proposition 13 but the state is trying to revoke that proposition. It is the insurance which has been cancelled. The house was worth about one million before the insurance was cancelled. Now ? I am 88 and if it lasts a few more years, We won't need it anymore, the kids will inherit it and if it burns down, their inheritance will disappear.
Norm

[Professor Fate]

There are places in the south that have a slab 3 bed 2 bath 2 car selling for $280k or less. And property tax ranges from $700 to $1800. Sell high and buy low!

[modeltspaz]

Norm,

I'm in the same leaky rowboat as you are, sort of.

I've had the same address in the Metropolitan Los Angeles area since June, 1962. Proposition 13 passed when I was a senior in High School. I'm 63 now.

My neighbors hate me because my property taxes are just over $1,000 per year. No one on my block has lived here longer. Their taxes are well into the $5,000+ per year range.

I was a year and a half old when my mom and dad bought this house. Last year my insurance rate doubled. I still have the same homeowners insurance my dad had. He passed in 1987. I filed one claim for a broken pipe under the bathroom lavatory that put speed bumps in the hardwood floor in the hallway. An area approx. 3' x 6'. This was in 1994. Nothing before, nothing since.

Because there was carpet over the hardwood, they wouldn't pay to replace the wood. They would only pay for carpet over plywood because carpet was the top layer.

The most recent "Oh shoot!" (I didn't actually use the word "shoot") I got was a little letter from my insurance carrier with a questionnaire about my house, requesting photos taken of specific areas outside my house. In 50 years this request has never happened before. EVER.

I opted to contact my local agent. She sent me her cell number so I could take the photos of the requested angles and text them directly to her.

The original letter from "The Home Office", as David Letterman used to say, stated that if I was unable to provide the requested photos, a representative from the company would be available to come to my home and take the photos for me. How nice.

I understood what you were saying Norm. As I said before, I was just having a little fun with your typo. I meant no ill will towards you.

As far as the insurance company request, I'm hoping for the best, I'm expecting the worst.

We now return you to the regularly scheduled rant.

[Craig Leach]

I was recently cornered by one of those political campain ( not a spelling mistake ) well meaning young persons. Wanting to make sure I knew
who to vote for. Because the current administration had produce the lowest inflation, unemployment & cost of living. Highest wages, prosperity
& equality of any modern administration in history. Then got mad at me because I would not respond. I was trying to be polite because I had just thrown up a little in my mouth and I didn't want to get any on them if I responded. The cost of insurance has gone up because the cost of
repairing your car & home has doubled because material & labor costs have doubled. That's if you can get someone to get off their a$$ do it!
Damn soap box!!
Craig.

[TXGOAT2]

Insurance companies have recently begun investigating policy holders regardless of claims history, if any. "Credit reports", marital status, and more have come under scrutiny. I believe this is why I began getting static from my insuror whom I had been with for decades, claim free. I have no credit history because I do not use credit and do not have a mortgage and do not borrow money. I can't prevent them from investigating my driving record, but I guess that wasn't much use to them since I haven't had a ticket since 1999. I changed insurance companies for the first time in decades to avoid a massive and totally unjustified premium increase.

[Loftfield]

So what can we say?!?!? If you live in a polity that thinks everybody is owed everything, cost of living will be high (There is no such thing as a free lunch: Kurt Vonnegut). Then, you add in all the costs associated with eco-freak tree huggers out to save the planet (from what?) and the cost of everything goes through the roof. By the grace of God we find ourselves living in Western North Carolina: low taxes, no insurance increases because we have no hurricanes, no wildfires, no flooding, no landslides, no tornadoes, no earthquakes, and our politicians are not into "free" handouts but expect everybody to pull their own weight, if not more. Please don't move here, too many newbies as it is, but Eastern Tennessee has the same benefits and not too far away. For you folks in Taxachussetts, we have essentially no winter, never put up our cars for the cold season, just drive all year round. And for the Floridiots, we have no super hot summers, don't have to use A/C, and don't walk around all summer with wet underwear. There really are some decent places to live.

[Professor Fate]

Brevard is a beautiful place. We've had friends move there too

[TRDxB2]

Insurance companies need to pay their operating expenses (advertising, employees, buildings etc) and insurer claims. The premiums charged are an attempt to diversify risk by pooling the risk from customers and redistributing it across a larger portfolio. So some will pay more than other for the same coverage based on several factors
So your "premium" is based on "your" choices of where you live, home construction materials, the car you drive, how accident prone you are (also eye on fraud) and your ability to pay your debts.

What affects your insurance costs
For home insurance, common factors include:
Your home’s age.
Your home’s roof age and material.
Where you live.
The cost to replace your house.
Your claim history.
Your credit score.
For auto insurance, common factors include:
Your driving record and claims history.
Where you live and how much you drive.
Your age, gender, and marital status.
Your occupation.
The cost to replace the car you drive.
Your credit score.
Other Factors
Inflation can affect the cost of new and used vehicles, car parts, and repairs; building materials and construction labor. Supply chain disruptions can affect the flow of construction materials and car parts from around the world.
Riskier driving results in more severe and costly accidents. As companies pay more claims (and higher vehicle repair and replacement costs), they’re more likely to raise rates to make up for those costs.
Weather events in Texas include freezes, hurricanes, hailstorms, tornadoes, wildfires, major thunderstorms, and more. The frequency and size of these events add to claim costs.

Real estate property Taxes are collected to pay for your State, County, City expenses (employees, buildings, educational facilities, vehicles, retirement programs, special programs etc).

If your lucky you don't have to pay a Personal Property tax which are collected in some municipalities in addition to real estate based on what you own - home, car tc.

The current administration is also looking at a 25% annual minimum tax on unrealized capital gains for individuals with incomes and assets over $100 million. Of course once that starts the basis will get lower as the Federal Government expands its programs.

[TXGOAT2]

Insurance companies used to be able to place substantial substantial amounts of capital in interest-bearing accounts, stocks, bonds, etc. Income from these sources augmented income from policy premiums. Low interest rates and market uncertainties have eroded that source of income. I assume that insurance companies are compelled to pay corporate income taxes, which are high in the USA. That directly erodes their financial strength, and makes investment riskier. It appears to me that auto insurance companies spend too much on TV advertising, especially given the fact that virtually every driver on the road is compelled by law to buy their "liability" products, and given the fact that virtually every car on the road is financed or leased, most every driver is compelled by their lien holder to maintain "full coverage" in addition to "liability". Most people's homes are also encumbered with a mortgage, and the required insurance coverage that goes with it.

[ironhorse]

Talked with my insurance agent. After I paid off my first house within 30 days they sent an "inspection team" and their recommendations were that I needed to replace my roof, take down a couple of trees and replace my water heater. I then got a notice from my carrier that if I failed to make the corrections they would cancel my homeowners insurance. I did the roof and the water heater because of their age, but I hired an arborist to inspect the trees and she gave my pecan trees a clean bill of health. I offered to take my carrier to court with my evidence if they cancelled due to the trees, they backed down but raised my premium $100 a year. Fast forward 20 years same carrier and I paid off my 2nd house 30 days later an "inspection team" came out and made several recommendations followed by the letter saying that if I didn't comply they would cancel my home owners insurance! My agent told me that several carriers are looking to get out of Florida Real Property insurance market but Florida says if they do they will no longer be allowed to sell any insurance products in the state. He also said that once the lien on your property is satisfied You are no longer required by law to maintain property insurance so the carriers try to encourage homeowners to drop coverage and that some of his customers cannot afford to do the repairs so they reduce their property insurance to liability only. I thanked him for his honesty.

[TXGOAT2]

Insurances companies have managed to make purchasing their products, mostly on their terms, mandantory for most people. Now they are pushing to have limits on policy rates, where they exist, raised or removed, as well as engaging in surveillance and investigation of policyholders in good standing. Many of them have effectively become governments unto themselves, with the power to tax and regulate property owners and their behavior and people who operate motor vehicles on the public roadways, and their behavior. Their power to extract cash from the public is virtually unlimited, while requirements for them to honor claims, in full or in part, where any such requirements exist, are very limited. State and local police have been pressed into service to enforce insurance company edicts on users of the public roadways. High $takes courtroom roulette flourishes in all 50 states, funded by compulsory insurance levies on drivers, businesses, and private homeowners, to the delight of unscrupulous lawyers.

[TRDxB2]

Apparently an appreciation of what Insurance Companies are about is lacking. Simply, they take on risks in return for the payment of premiums. They spread risks across a broad area of applicants assuming that only some will make claims and all the premiums will cover those and leave a profit over several years.

In doing they need to "insure" against fraud from people not like you. They need to establish a baseline of the condition of the property, home or car, to establish its value & related premium. So would you insure a house, site unseen, based on the owners description & photo's? Photo's can be old taken before damage to be claimed later on. Same for a Model T, basket case or fully restored, not the same initial insurance values.

Then there is the cost of materials & labor (both demolition & construction) needed to restore the damage. Then there's the issue of the value of the property over time, some things appreciate, others depreciate. It is a complex business

[TXGOAT2]

The government/banking/insurance complex does VERY WELL ..... for its self.
Insurance itself has become a risk beyond the insureds' control in many cases.
Paying premiums for decades to the same company may not protect you against cancellation or a stiff premium increase based on a legitimate claim related to a covered loss.