The 12 month limitation of Additional Living expense is too restrictive in many coastal areas simply because of bureacratic delays in the permit process now. The Cov. C limits have been set unrealistically high by the carriers strictly for market appeal, and seldom (in our area) are related to real values. I have clients that have bought homes insured for $400-450,000 and have total content values under $10,000. How is that a fair shake to a carrier, if they say we’ll just take the 85% of the 75% Cov. C limit and save all the paperwork…netting them about $250,000 over the actual loss? That’s how I read this, based on a limited understanding of the bill. Coverages C & D have unrealistic limits and the 24 month term for Coverage D should be universal on all Homeowner and Condo policies not just respecting declared catastrophe losses.
Mediocre surplus lines policies will be all that will be available for these poor folks thanks to Jackie Speier. Sadly, she is my senator, she needs to be shipped off to a socialist country where she will be right at home.
Joe, I agree with you 100% and thank you for the great comment. Extending to pay living expenses for 2 yrs is idealistic, but, where did she get the idea for 85%.
That is insane.
I have a feeling none of you have either a) done a true home inventory or b) had a total loss. I worked with dozens (if not hundreds) of homeowners after the fires and they were all underinsured on both ALE and Personal Property. I can see maybe a brand new first time owner of a $450k (starter) house (at least in CA) who just got out of mom’s house, only having $10k in personal property, but those people are in the minority and should not be used as an excuse for underinsurance. By the time they need the higher coverage limit (if they ever in fact need it due to the limited nature of total losses), they will have much more stuff! Heck, just add up a couple thousand in groceries (once you add up all of those stock items) a couple of thousand in clothes and shoes and throw in a bed and a couch and you’re already up near $10k.
John (?), my original post just questioned the fraud potential of requiring an 85% payout without inventory.
Somebody else brought up the question of variable limits…so I mentioned the old CDP, as a history lesson.
I concur with the underinsurance likely under the current Cov. D/ALE. Safeco has 24 months actual loss, as I recall. A logical solution.
You are correct in assuming that in our part of the state with $450,000 median home PRICES…Under $45K median HH incomes, we have few clients that exceed the 70% Cov C. provisions.
We do find however that a substantial number of new HO accounts are currently underinsured on most direct writer HO contracts that we encounter. It is not unusual to need to increase Cov A limits by 20-25% using standard MS&B estimates. And there are a surprising number of understated sq. ft. listed in the old policies. FWIW
If Ms. Speier continues on this path of Total Distruction to the industry then the percentage allowances for cov.C & D should be terminated and let the public select and pay for the amount of coverage they will need. With today’s inflation the 50% & 20% are grossly over stated and allowing for 85% collection is fraud authorized by the incompetent legislators! Why even issue a (contract) of insurance?
When I first entered the business in the ’50’s California had a “tweener” policy called the CDP, which I believe stood for Comprehensive Dwelling Policy. As I recall the limits A thru D were selectable and priced accordingly. It was replaced by the simple HO 3 percentage formula for Covs. B-C and D, but it served a purpose for years.
I’m surprised at the lack of professional demeanor demonstrated on serious subjects in this forum. Seems to defeat the purpose of providing an opportunity for reasoned discourse.
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The 12 month limitation of Additional Living expense is too restrictive in many coastal areas simply because of bureacratic delays in the permit process now. The Cov. C limits have been set unrealistically high by the carriers strictly for market appeal, and seldom (in our area) are related to real values. I have clients that have bought homes insured for $400-450,000 and have total content values under $10,000. How is that a fair shake to a carrier, if they say we’ll just take the 85% of the 75% Cov. C limit and save all the paperwork…netting them about $250,000 over the actual loss? That’s how I read this, based on a limited understanding of the bill. Coverages C & D have unrealistic limits and the 24 month term for Coverage D should be universal on all Homeowner and Condo policies not just respecting declared catastrophe losses.
Mediocre surplus lines policies will be all that will be available for these poor folks thanks to Jackie Speier. Sadly, she is my senator, she needs to be shipped off to a socialist country where she will be right at home.
Joe, I agree with you 100% and thank you for the great comment. Extending to pay living expenses for 2 yrs is idealistic, but, where did she get the idea for 85%.
That is insane.
Jackie may be “incompitent” but think she can spell the word INCOMPETENT?????
I intentially mispell to rattle up liberals like yourself.
I have a feeling none of you have either a) done a true home inventory or b) had a total loss. I worked with dozens (if not hundreds) of homeowners after the fires and they were all underinsured on both ALE and Personal Property. I can see maybe a brand new first time owner of a $450k (starter) house (at least in CA) who just got out of mom’s house, only having $10k in personal property, but those people are in the minority and should not be used as an excuse for underinsurance. By the time they need the higher coverage limit (if they ever in fact need it due to the limited nature of total losses), they will have much more stuff! Heck, just add up a couple thousand in groceries (once you add up all of those stock items) a couple of thousand in clothes and shoes and throw in a bed and a couch and you’re already up near $10k.
John (?), my original post just questioned the fraud potential of requiring an 85% payout without inventory.
Somebody else brought up the question of variable limits…so I mentioned the old CDP, as a history lesson.
I concur with the underinsurance likely under the current Cov. D/ALE. Safeco has 24 months actual loss, as I recall. A logical solution.
You are correct in assuming that in our part of the state with $450,000 median home PRICES…Under $45K median HH incomes, we have few clients that exceed the 70% Cov C. provisions.
We do find however that a substantial number of new HO accounts are currently underinsured on most direct writer HO contracts that we encounter. It is not unusual to need to increase Cov A limits by 20-25% using standard MS&B estimates. And there are a surprising number of understated sq. ft. listed in the old policies. FWIW
If Ms. Speier continues on this path of Total Distruction to the industry then the percentage allowances for cov.C & D should be terminated and let the public select and pay for the amount of coverage they will need. With today’s inflation the 50% & 20% are grossly over stated and allowing for 85% collection is fraud authorized by the incompetent legislators! Why even issue a (contract) of insurance?
When I first entered the business in the ’50’s California had a “tweener” policy called the CDP, which I believe stood for Comprehensive Dwelling Policy. As I recall the limits A thru D were selectable and priced accordingly. It was replaced by the simple HO 3 percentage formula for Covs. B-C and D, but it served a purpose for years.
I’m surprised at the lack of professional demeanor demonstrated on serious subjects in this forum. Seems to defeat the purpose of providing an opportunity for reasoned discourse.