This is such a bad idea I don’t even know where to begin – I can just see some poor agent telling the clent they have to insure their home for X amount of dollars-Agents have no business telling people how much to insured their property for – We simply guide clients and explain the coverages and limits – Can anyone say “Co-Insurance” ?????This is like FORCED HEALTHCARE – If I was a CA agent I would be livid!
I don’t represent a carrier that doesn’t require that we complete an MS&B replacement cost estimator before quoting or inside the quote process itself. That data then becomes a part of the policy’s underwriting file and it is used as a base to bring reconstruction cost current about every two years. The computed reconstruction amount is the only figure presented to the client…take it or leave it. We spend quite a bit of time getting all the construction details, the longest part of the quote process, and the clients appreciate it. They know that they are being adequately insured and I’ve only had a handful that complain. We also provide at least 150% Extended RCC…and they are well insured…normally over-insured absent a catastrophe. I can’t say that in these wildfires there isn’t such a great demand on contractors, labor and material that there isn’t a huge increase in reconstruction or that the 120% or 125% ERCC used by some direct writers or their 10% Buiding Code Upgrade cov. is adequate compared to the 150% ERCC and full BCU to policy limits we sell…but in my view the problem lies not in professional insurance agents. The inferior policies and deliberate construction detail misinformation some agents have provided their carriers to get a lower premium are occasionally factors in underinsurance and no amount of education will resolve that. Carriers need to police their own agents by doing onsite direct checks of their insured properties. People do lie too to get lower premiums. When we suspect that we explain the co-insurance clause in most HO-3 forms and that gets their attention. I have no idea how you conduct insurance in FL, but I was in Homestead shortly after Andrew (?) and it struck me that lack of adequate construction codes and enforcement was a major issue and if you resent doing business in a professional manner to the best advantage of your client then the same malady has spread to the insurance biz in the Sunshine state.
Sad that we must view every breath of an insurance commish these days under the microscope of their political ambitions, but here goes:
So this is designed to look like a consumer protection measure, while at the same time pandering to the insurance companies for campaign contributions by allowing them to raise premiums by raising coverage amounts.
Of course if Whitman thought the people would listen, she would point out that Stevie is trying to raise homeowner premiums, you know for those big, bad insurance companies funding his campaign.
Seriously, I miss the days that Commish wasn’t a stepping stone for higher office.
Even for responsible agents like Central Coast Agent, we do not have crystal balls to really make an accurate determination of replacement cost. For example the fire in Oakland in 1989 resulted in a 400% increase in the labor rates as there were not enough contractors to re-build (think supply and demand) Are you insureds going to call you when they had a room or a upgrade to a marble kitchen. To accurately even complete a decent cost estimator the agent has to almost be a contractor himself. There are just too many varibles to consider. Is cost estimator really be adequate in three years. Are you going to do an update every year. The intent of the CA regs is to make the agent responible not the homeowner or insurance company. I and my E&O insurance are awaiting the final regs.
We have updated our privacy policy to be more clear and meet the new requirements of the GDPR. By continuing to use our site, you accept our revised Privacy Policy.
This is such a bad idea I don’t even know where to begin – I can just see some poor agent telling the clent they have to insure their home for X amount of dollars-Agents have no business telling people how much to insured their property for – We simply guide clients and explain the coverages and limits – Can anyone say “Co-Insurance” ?????This is like FORCED HEALTHCARE – If I was a CA agent I would be livid!
If I remember right, most of the underinsured homeowners purchased their coverage from direct writers or on-line. Hmmmm.
I don’t represent a carrier that doesn’t require that we complete an MS&B replacement cost estimator before quoting or inside the quote process itself. That data then becomes a part of the policy’s underwriting file and it is used as a base to bring reconstruction cost current about every two years. The computed reconstruction amount is the only figure presented to the client…take it or leave it. We spend quite a bit of time getting all the construction details, the longest part of the quote process, and the clients appreciate it. They know that they are being adequately insured and I’ve only had a handful that complain. We also provide at least 150% Extended RCC…and they are well insured…normally over-insured absent a catastrophe. I can’t say that in these wildfires there isn’t such a great demand on contractors, labor and material that there isn’t a huge increase in reconstruction or that the 120% or 125% ERCC used by some direct writers or their 10% Buiding Code Upgrade cov. is adequate compared to the 150% ERCC and full BCU to policy limits we sell…but in my view the problem lies not in professional insurance agents. The inferior policies and deliberate construction detail misinformation some agents have provided their carriers to get a lower premium are occasionally factors in underinsurance and no amount of education will resolve that. Carriers need to police their own agents by doing onsite direct checks of their insured properties. People do lie too to get lower premiums. When we suspect that we explain the co-insurance clause in most HO-3 forms and that gets their attention. I have no idea how you conduct insurance in FL, but I was in Homestead shortly after Andrew (?) and it struck me that lack of adequate construction codes and enforcement was a major issue and if you resent doing business in a professional manner to the best advantage of your client then the same malady has spread to the insurance biz in the Sunshine state.
Sad that we must view every breath of an insurance commish these days under the microscope of their political ambitions, but here goes:
So this is designed to look like a consumer protection measure, while at the same time pandering to the insurance companies for campaign contributions by allowing them to raise premiums by raising coverage amounts.
Of course if Whitman thought the people would listen, she would point out that Stevie is trying to raise homeowner premiums, you know for those big, bad insurance companies funding his campaign.
Seriously, I miss the days that Commish wasn’t a stepping stone for higher office.
Even for responsible agents like Central Coast Agent, we do not have crystal balls to really make an accurate determination of replacement cost. For example the fire in Oakland in 1989 resulted in a 400% increase in the labor rates as there were not enough contractors to re-build (think supply and demand) Are you insureds going to call you when they had a room or a upgrade to a marble kitchen. To accurately even complete a decent cost estimator the agent has to almost be a contractor himself. There are just too many varibles to consider. Is cost estimator really be adequate in three years. Are you going to do an update every year. The intent of the CA regs is to make the agent responible not the homeowner or insurance company. I and my E&O insurance are awaiting the final regs.