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August 16, 2007
Townhouse Insurance: Bending Over for the Soap
Since we purchased our brownstone three years ago, our insurance provider, Chubb, has roughly doubled the annual premium from about $6,000 to a whopping $12,000 on the renewal forms we recently received. Some of this may be attributed to the fact that we actually filed a claim for about $15,000 back in 2006 when we had some flooding that resulted from a collapsed waste line. Mostly, though, it's because they insist that the replacement value of our house is about $2.8 million, a good 50 percent more than its market value. (In contrast, a friend who own a brownstone in Brooklyn Heights that must be worth north of $5 million just got a bill for $14,000 from Chubb.) In Chubb's defense, they were an absolute pleasure to deal with when the shit hit the fan (quite literally, in our case). That said, this is some serious dough. We recently checked in with the Brownstone Agency and got a quote that was a little over $4,000 a year for the next three years. We were able to choose how much we wanted to insure the house for, so the quote is based on $2 million. It would be interesting to hear what people's experiences have been when they've had to place claims with both companies. Also, any other carriers we should check out?
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Comments
I have heard second hand that Chubb traditionally seeks higher premiums but provides excellent responsiveness to processing claims. Kind of falls into the you get what you pay for idea. A good independent insurance broker should be able to feel out what's most important for you.
Posted by: guest at August 16, 2007 10:23 AM
We obtained insurance through the Brownstone Agency - about $9,000 for 3 years (discounted rate for pre-payment). I did this before reading about all the complaints about this agency in the Forum. We haven't filed a claim yet (knock wood), so I have no actual experience with the speediness etc. with which claims get processed.
North Sleeper (still waiting for my registration)
Posted by: guest at August 16, 2007 10:27 AM
If you are talking about insuring for replacement value - makes little difference what market value is.
One must decide what you really want.
It is all the detail (orig or whatever) that makes replacement value so high.
If you lost the house, and could get another of similar quality for 1/2 the replacement price....why are you insuring for replacement value?
Posted by: Petebklyn at August 16, 2007 10:34 AM
Chubb INSISTS that you insure for replacement, not market, value. It's not our call...
Posted by: brownstoner at August 16, 2007 10:40 AM
It's absolutely crucial to insure for replacement value. It makes no sense to purchase the insurance for any amount less. It sounds as though you have a decent policy, despite the premiums.
Posted by: guest at August 16, 2007 10:47 AM
I would recommend calling State Farm. Their # is 718-787-4500. Those quotes you are getting seem very high.
Posted by: oe at August 16, 2007 10:48 AM
Brownstone Agency goes by the theory that it's cheaper to rebuild than to find an exact replica. Hence, the cheaper rates.
Posted by: guest at August 16, 2007 10:49 AM
I don't understand why you would insure the house for 2 mil. I also received an increase in my premium from Allstate last week and switched to Brownstone Agency. I checked with 2 architects who agreed that I was safe with 900k coverage for my 3200 sq. ft. brownstone. I increased the deductible to 5k and will pay 5700 for 3 years. I thought market value and the cost of reconstructing after a fire were not related. The market value of my brownstone would be about 2.5 mil. Am i missing something?
Posted by: guest at August 16, 2007 10:59 AM
Hey, what's with your homophobic title for this post?
Posted by: guest at August 16, 2007 11:17 AM
we are in our first year with chubb on a recently-purchased brownstone. they are currently trying to jack up our premiums by 50-100% during a renovation we are doing on the house. they are also imposing several somewhat onerous requirements, such as mandatory installation of a central fire/burglar alarm system. chubb was the most expensive option to begin with, and now i'm losing patience with them.
are renovation upcharges like this typical with homeowners insurance?
Posted by: z at August 16, 2007 11:20 AM
Market value doesn't apply because it takes into account the cost of the land. The same structure in Bed Stuy or Brooklyn Heights will have the same replacement cost even if market value is 5x higher in B Heights.
Posted by: guest at August 16, 2007 11:26 AM
My State Farm policy is less than 2k a year. Replacement value with mid-level deductable on 3 floor 2 fam.
Have to admit, I don't understand how market value even comes into play when buying insurance since you'd never be replacing the land under your house. The worst case is a complete rebuild - i.e. replacement cost, which most insuance companies should be able to estimate. Although I could imagine some folks would sleep better bumping that number.
Posted by: Johnny at August 16, 2007 11:27 AM
We have Brownstone Agency coverage and went through a renovation where we were not living in the house. Brownstone was only willing to sell us construction coverage riders for very short periods -- 3 months or so as I recall. We ended up having to get 2 of them, and our broker indicated it would be hard to get them to agree to a third one. The price for the coverage was not excessive, but it left me with the impression that it's hard to get carriers to insure you for a long-term renovation project.
Posted by: guest at August 16, 2007 11:28 AM
If you continue making claims that are escalated and think your going to cheat the insurance companies you have a lot to learn. They will raise your rates and you will pay a lot more in the long run. Your claims are public record and all insurance companies have access. It might sound crazy but if you have a legimate claim and it doesn,t amount to more than a few K. Don't make the claim and save your insurance when you really need it.
Posted by: guest at August 16, 2007 11:37 AM
If you continue making claims that are escalated and think your going to cheat the insurance companies you have a lot to learn. They will raise your rates and you will pay a lot more in the long run. Your claims are public record and all insurance companies have access. It might sound crazy but if you have a legimate claim and it doesn,t amount to more than a few K. Don't make the claim and save your insurance when you need it.
Posted by: guest at August 16, 2007 11:39 AM
I used to work for Brownstone Agency. I will preface my comments by stating that I left voluntarily after a number of years with promotions, increased responsibility, etc., so I'm not a disgruntled former employee looking to trash the firm. But I would never, never insure my home with them. What you save in premiums, you will pay back in spades should you be unfortunate enough to have a claim. There's a reason a number of us used to call the claims manager Dr. No.
FWIW, This Old House Journal recommends Chubb, Fireman's Fund and AIG as the three carriers who are best for historic homes. We got Chubb to come down on their renewal premium when our broker contacted FF and got a competitive bid. It's still not cheap but I have insurance to cover me in case of a loss. I know, through personal experience, that Chubb will come through.
Posted by: zeebee_in_bklyn at August 16, 2007 11:46 AM
I work with old buildings, and it's known in my field that Chubb is *the* insurance company for the type of building that you own. They really understand the specific needs of historic construction.
Posted by: guest at August 16, 2007 11:58 AM
2 points:
1) Check out Fireman's Fund. Their premiums were a bit better than Chubb and they have a good reputation when it comes to filing claims, almost on-par with Chubb. DO NOT go with State Farm. We previously had a claim cross over to our insurace from a neighbor's claim which was found by both companies' adjusters NOT to be our fault (State Farm did not pay a dime) and then they proceeded to drop our policy. I've heard bad things about Brownstone Agency...
Dude, look it up in the forum.
2) 11:17 - To defend Mr. B from the PC police: It's a rape reference, not a homosexuality reference. Prision rapes (actually all rapes) are about power and not about sexuality. The "pick up the soap" reference is about doing something vouluntarily which you know is going to result in a violation of some sort or another.
Posted by: guest at August 16, 2007 11:59 AM
We've used Irv Lepelstat (Union and 7th in PS) as our broker and every time we have to renew I ask him a million questions, think I have a handle on the situation, re-up with Brownstoner, then go off and fret that I've done the wrong thing (aka opted for the more affordable premium).
Here's my understanding: worse case scenario, the house burns to the ground. Solution? File a claim to the maximum insured value -- in our case, as it is for many brownstone-owning friends, that's less than either market value or replacement value -- and then use those proceeds to build a new townhouse. It would be without any of the old detail but offer the modern style and conveniences that attract certain buyers. This of course only works if the new house can be built within the budget of the claim -- say $900k.
I've also heard that the biggest battle in making a satisfactory claim after a major/total loss is around the role of the adjuster. Some people say you need to hire a public adjuster to work on YOUR behalf because the insurance co's adjuster will only look for ways to reduce your claim. Anyone have any wisdom on this to offer?
Posted by: NeoGrec at August 16, 2007 12:33 PM
OK, so what's with the rape joke? Why is being on the receiving end of anal intercourse considered the ultimate degradation?
Posted by: guest at August 16, 2007 12:34 PM
when allstate dropped us we called around- state farm and liberty mutual had the best rates- around 1200 a year for a 1 million replacement value.
Posted by: guest at August 16, 2007 12:37 PM
Me again...
A) Being on the receiving end of any nonconsentual invasive act is the ultimate degradation. Doesn't matter what the orifice is, but thanks for sharing.
B) Rebuilding cost is irrelevant without a replacement cost endorsement. Just be sure the policy states they will rebuild with like materials and construction (be very careful with the wording here - examine it very closely and discuss it at length with the agent and TAKE NOTES about your discusson which you can refer to if there ever is a claim in dispute).
If you have a fire, you want your water damaged plaster replaced with new plaster on wood lathe, not drywall on metal studs, and you want your cieling medallions replaced with plaster not with the fiberglass fakes at home depot. Be sure to ask about architectural antique replicas - say antique wood doors, etc. - things that aren't in production and would have to be either reconstructed by a craftsman or replaced with an equivalent antique. Otherwise they will try to only cover hollow core doors and with cheap hinges.
When I spoke to Brownstone Agency they said they would replace things with like materials as long as they're still being made, which in the case of a 100+ year old Brownstone, you would be screwed in a total-loss situation. Also, replacement value on a brownstone would be MUCH more than $1M.
I think Chubb actually sounds a lot more on-point with their numbers.
C) I know someone who had a fire in a 100 year old house and hired an outside adjuster after the insurance co. adjuster came back with a horribly low assessment of the rebuilding cost. The adjuster not only knows what things cost to rebuild, but also they will help you compile a list of ALL the costs associated with the disaster (everything from smoke damaged linens to professional cleaning for a wedding dress to the above mentioned "architectural replicas"). The outside adjuster paid for their fee 20 times over. Literally.
Remember, the insurance company adjuster's paycheck is coming from the insurance company, so they have a vested interest in settling the claim for the cheapest ammount possible which will appease the claimant without resulting in a lawsuit.
Posted by: guest at August 16, 2007 1:17 PM
Also, forgot to mention:
D) Our Fireman's Fund is around $3600/year for a $1.8M replacement value on a 2 family brownstone.
Posted by: guest at August 16, 2007 1:19 PM
Our Manhattan townhouse had a pipe break several years ago damaging several rooms. Chubb was easy to deal with--we used an adjuster--and we got a fair settlement approaching 200k. I continue to insure with them and have no problem recommending Chubb.
Posted by: dstarer at August 16, 2007 1:50 PM
Metamessage in all these posts:
You gets what you pays for.
Posted by: guest at August 16, 2007 2:02 PM
The Brownstone policies that I have seen (esp for 3 family houses) were written on a modified commercial form and provide limited coverage - i.e. for building only, not contents. Your policy may be different, but it's worth checking out. An actual Homeowners form (versus a Fire form) provides much more comprehensive coverage. Incidentally, our Allstate policy carries a 5% deductible for wind, which is huge!! We're going to try and get out of it at renewal, but with the recent windstorm in Bay Ridge, other carriers may be reluctant to insure in Brooklyn. We should flood the state insurance department with complaints about the 5% wind deductible. Incidentally, insurance does not cover the land - no need to. Coverage A is the value of the building itself. The same building in Park Slope and Crown Heights will have wildly different resale values only because of the location, which is essentially the land.
Posted by: guest at August 16, 2007 2:32 PM
Dear Zeebee in Brooklyn, a quick question: We just purchased a policy through the brownstone agency...gulp - after being quoted through the roof by Chubb (similar story to Mr. B's). Your comments (and others here) had me about ready to run out and change policies, but then I remembered that our policy is underwritten by the New Hampshire Insurance Co, which is part of AIG. You mentioned in your post that AIG was one of the better carriers.... so now I'm confused. Wouldn't New Hampshire/AIG be the ones I would deal with in the event of a claim?
Thanks for any feedback.
PS Re: Mr. B's soap metaphor in the headline: it certainly seems to invoke an ugly, and primal, anti-gay fear (the same fear is still trotted out by elected officials to protect our troops from gay folks in the military), and is therefore, IMHO, homophobic. That said, I seriously doubt that that was the intended communication. A dumb headline, in my opinion, not to be repeated or defended...but not a malicious one.
Posted by: Boerum Blogger at August 16, 2007 5:45 PM
Hi Boerum Blogger:
The recommendations from This Old House Journal were for carriers that write house policies with provisions that cover the ins and outs of repairing an old home, with like kind and quality of materials per Guest 1:17's post. My memory of the OHJ article (more like a blurb) was not of pros and cons of the companies' claims records, but a statement that those carriers actively underwrite old and historic homes and aren't going to run away screaming when you say your house was built in 1880.
If you have a claim, you would call Brownstone Agency and deal with their claims department. As agent, they are supposed to filter out excluded claims and pass on legitimate claims to the company for payment. My experience was that legitimate claims which should have been covered were fought tooth and nail at the agency level, not just the amount of payment but whether the claim would be covered at all.
Posted by: zeebee_in_bklyn at August 16, 2007 6:35 PM
I received a very reasonable quote from Hub International, who is the agent for New Hampshire Insurance Company, which ultimately rolls up to AIG.
OK, if you're still with me, my question is this - has anyone ever worked with or had to file a claim with Hub? Their quote was within 5-10% of Brownstone Agency and they were willing to do a 5 unit building. Given the negative feedback on BA, I'm inclined to go with Hub, but thought I'd ask first.
For comparison, the quote was ~$5,000/yr for $1.6m replacement value (with like kind materials) with a $2,500 deductible. The townhome (in Manhattan) is ~6,400 sq ft and is at least 100 yrs old. The quote also includes rental loss coverage, but does not include interior belongings (clothes, jewelry, etc. as its written as a commercial policy).
Posted by: guest at October 15, 2007 10:48 AM
I would give Travelers a call. They require that the house be insured at it's replacement and not market value. And the premiums are competitive with other companies.
Posted by: guest at November 4, 2007 11:05 PM
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