I don't really understand the privacy concern here. To wit: insurers can demand actual inspection of your home when making underwriting decisions. The condition of your house is very much their business. Why is an aerial photograph of your roof, which everybody in the world already has on Google Maps, such a big deal?
I think the issue is that in some cases the information is inaccurate and there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information.
To the extent that the information is accurate, I agree. If you make an agreement with a company and buy insurance based on your statement that you don't have a pool, but then you do have a pool, I don't see any reason why we should be upset that you didn't get away with lying to the insurance company.
Last time I was shopping for home insurance, an agent told me I was too close to a canyon, which I thought was strange because there are no canyons near me. They sent me a screenshot of the fire danger map where clearly it had the wrong location / coordinates for my address (they thought I was about a mile from where I really live).
I pointed them to my address on Google Maps which has my correct location, but they said their system isn't wrong and the address coordinate mapping can't be changed anyway. Go away.
Then another insurance company told me the same thing. I thought maybe I was going to be uninsurable completely based off of a computer error.
Luckily, Lemonade has smarter systems and got my location right, so I was able to get insured with them. But I'm not sure what I would do without lemonade.
They can generally decline coverage for any reason, for what it's worth; they could cancel without aerial footage just on the hunch that you didn't replace your roof, or they could mass-mail their customers demanding proof of roof replacements.
(The article and other things I'm reading suggest that cancellations are because footage finds trampolines and pools --- in which case I don't even understand how anybody can have sympathy. It's fine to have insurance risks on your property! But disclose them!)
There was a case recently in NZ where home owner tried to defraud an insurance company. Well suddenly none of the insurance companies would work with him. Insurance is a requirement for mortgage so this person is effectively going to loose his house.
False positive with similar circumstances would be a nightmare.
> there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information.
This is part of the risk one takes buying property. It’s more than offset by the benefits of buying property. Or else everyone wouldn’t be telling me what an idiot I am for renting.
> if their insurance is cancelled based on inaccurate information
I see this type of comment on HN too often. Some hypothetical bullshit scenario followed by a BIG if. Armchair quarterback type of comment.
In all highly advanced countries (G7 and similar), insurance is insanely strictly regulated. If they cancel your policy for a b/s reason, and your protests are ignored, then tell the regulators. They will fix it quickly and slap a huge fine on the insurer.
It’s an issue of scale. Similar to police tracking phones. Police have always been able to assign an officer to follow a suspect, but it’s expensive and therefore rarely done.
If insurance companies can cheaply inspect everyone’s house from space, the end result will be to lower prices for people with homes in perfect condition and raise them for everyone else.
This is potentially problematic because the people with houses in poor condition are the least able to afford added costs in general.
Why is it not a good thing if insurance is more accurately priced? Insurance isn't a redistribution mechanism. And dilapidated roofs aren't a social good. Municipalities have actual redistribution schemes to make these kinds of repairs.
I'll note that there's nothing at all redistributive about sneaking a trampoline onto your property, too.
Further, I'll note that working class people also take pride in their houses and pay to keep them up, and they too are being asked to subsidize people who are getting rate breaks from false assessments.
Later
My municipality will make an interest-free loan of up to $25,000 to cover the kinds of property repairs we're discussing, if you're income-qualified (ie: not too rich to just pay to replace your own roof).
At the risk of being callous, the goal of home insurance is to assess and manage risk. Choosing ignorance in the interests of giving some people a subsidy on the assumption that they may be poorer does not further these goals in any way I can see.
If the goal is redistribution, then using accurate risk data as a starting point seems preferable.
> the end result will be to lower prices for people with homes in perfect condition
Nobody will see lower prices. Perhaps these perfect homes might see slightly smaller increases year to year.
> houses in poor condition
The point of the thread is that they're dropping people for random noise in satellite photos. The house might be perfect, it's just the photo that's wrong. But they don't care.
The solution seems to be to remove the insurance mandate, and allow purchasing insurance across state lines. That way two locked-in markets are opened to more competition.
Insurance companies are very keen to get as much risk as possible off their books before the climate gets even more extreme in its volatility
Good goes with bad, so long as the bad goes, some good going too is undesirable but OK because they are aware if the catastrophic climate events looming
The insurance companies are behaving logically, probably legally IANAL, but for people who are simply caught in the wash it is unfair
This is part of the huge systematic disruptions we are all going to have to adapt to, or die from, due to climate change
Insurance companies are keen to align risks with premiums. The more accurately they do so, the less volatility they will have. And in the short run, probably more profit as well. This also helps consumers, where lower-risk folks will overpay less, and higher-risk folks will be required to lower their risk or contribute more in premiums.
Insurance companies want money to come in and never go out. If they could they would sell life insurance to dead people and homeowners insurance to the homeless.
You (say) have a trampoline. I do not. We share an insurer. Our insurer asked, when you applied, if you had a trampoline.
Your trampoline materially increases the risk that insurance is going to have to pay to cover a lawsuit on your property. You lied, and said you didn't. I am now paying to subsidize your trampoline.
Why shouldn't I want them to be running drones over our houses? Worrying times... for pirate trampolines!
at least in the United States, home insurance is issued a year at a time. So it doesn’t make sense to cull today in anticipation of some hypothetical future shift towards cataclysm.
Also, what is the aerial photo of a roof going to indicate in terms of “cataclysmic climate events looming”?
Also is it a coincidence or a pun that your name is worik and it is common for you to sign your posts with something about worrying?
Lol my dude, trampolines in backyards being a rejection reason has nothing to do with climate change.
Yes climate change has caused an upheaval in some geographical regions.
But there are many economic forces at play, from the treatment of real estate as an investment making every home a million dollars to insurers all being reinsured by a ever smaller pool of reinsurers.
I saw one case where a guy was dropped because of an aerial photo of a pile of junk in his yard. I’ve had piles of junk in my yard during various remodeling projects. If the satellite passes over the day before the dump run, there’s no way to tell that the junk was gone the next day. If there’s an inspection, it’s easily explained.
I suppose you could offer an explanation for the satellite photo, but in that case you’ve already been dropped, so getting your policy reinstated is going to be a much bigger lift.
I think that one difference might be that physical inspections don't scale. It seems to me that the current systems working (for regular people) requires that insurers not be too good at assessing risks. The better the insurer is at assessing risk the closer insurance gets to providing no value to the insured.
Insurance can provide value even when risk is assessed perfectly! If everyone has a 1 in 100,000 chance of a $100,000 damage incident, they will have to keep $100,000 of savings to make sure they can avoid becoming homeless from an accident. But by paying $1.25 in insurance, (25% profit to the insurer), they can use their $100,000 for other purposes and generate much more than $1.25 in income from it.
In terms of sheer game-theoretic value, sure, perfect knowledge will reduce value gaps. However, the thing with having your house insured is that you will have somewhere to live if you have a house fire. The +/- for the insurer might be close, but going from having a house to having no house is a bigger deal than going from one house to a twice-as-expensive house.
Insurers don't on average provide value. If a risk can't be assessed, they will only offer a policy if they think it's value to them at the price they charge.
An insurance company should be required to go through a legal process before they are able to drop people.
Sure, an undeclared pool is a problem. However, the insurance company should have to put the pictures into evidence and allow a legal rebuttal. Bureaucracies get things incorrect like "wrong address" all the time. People need the right to challenge these behemoths.
We've been through this once already in the US--it was called "rescission" in healthcare until the ACA made it moot by requiring coverage of preexisting conditions. It's a bad thing and invariably needs to be made illegal.
We require coverage of preexisting conditions in a bargain that involves coverage mandates (since struck down) and continuous coverage / enrollment periods. And health insurance is the primary payment gateway to a deeply distorted market that relies utterly on insurers to take payments, which is not something that is true of the housing market. I don't think I have too much of my identity invested in whether homeowners insurers need due process to not renew contracts, but I guess I'd argue the other side of that one. Either way: hard to see the privacy issue.
Demanding an inspection is a process that can be organized and scheduled around.
Your friend brings over a trampoline for Timmy's birthday party, you can take the risk of injury with no intent to claim on insurance. You can remove it before inspection.
Now you get pinged out of the blue by a satellite.
Adults don't need constant supervision. Should you believe they do, why not leave a multi-camera drone above your suburb and every insured house can be monitored for infractions 24/7.
There is no reason for the insurance company to withhold the image as evidence of a problem. Google Maps knows where my trampolines are, why is the insurance company hiding their cards?
An insurance company that surveils you 24/7 and makes sure you comply, is not covering any risk, it's a protection racket.
I'm sorry but this comment makes no sense. Where did you get that insurance companies are now "surveiling you 24/7"?
If my insurance goes up, and it has, because of people defrauding insurance companies then I would fully expect my insurer to protect their bottom line and my rates by dropping those customers playing unfairly.
What I don't agree with is insurance companies punting the decision making process to an algorithm. At that rate we end up with Google "support" from a company that, as paying customers, we should be able to have a conversation with.
The last thing I'll mention is that it goes a long way to know your insurance broker. As an example I've known mine for the last ~15 years and they have helped remediate a number of, what I'll describe as standard process issues, when I've contacted them and in a few cases even proactively.
In these cases, the argument is always of the type you just mentioned.
“What’s the big deal the data is already available, relax”. On top of that, it comes with an air of condescension as if no one had ever thought about that before.
One concern with things like this is that it’s different when you have to send someone out to inspect a home vs inspecting thousands of homes at a time. Once you have data in that volume, you can start to infer things that do borderline encroach on privacy.
What is the case here, and it might be what you were trying to point out, is that this kind of data is already collected regularly and is by the books legal. The concern here is simply at the application.
At this point the cats out of the bag and the best we can hope for is at least some level of protection through legislation.
I used to work for Verisk, an insurance tech holding company, who owned a company that took pictures of people's roofs using airplanes and special cameras. They got sued over a patent violation with EagleView[1], who claimed the tech idea as their own, and settled.
> The strategic alliance allows customers seamless and integrated access to EagleView technology within Verisk’s Xactware platform
Xactware is a product that customers (read: insurance companies) use to figure out how much money to pay on a claim.
The whole idea is to speed up the claims process. Insurance agents don't need to go out to people's houses to examine roof damage. But we also had a department doing some pretty sophisticated stuff around preventing claims fraud, so I'm not surprised.
I’ve thought about doing this myself and I wish there was a service that made it easier.
The one thing in the back of my mind is also that there’s a risk of this backfiring over time. When you are unknown to potential creditors, employers, etc in whatever platforms they choose to use to look you up, that’s the ultimate sign of risk.
I'm less concerned about the spying and more concerned about insurance companies arbitrarily non-renewing policies with no recourse for the consumer. Insurance is heavily regulated for good reason, and insurance should be a source of stability instead of anxiety.
Alright, I spent years working and building 0-1 insurance products. Let me peel back some stuff that’s been happening behind the scenes.
Some officials are elected and some are appointed which all depends on the state. Appointed officials are usually more reasonable and elected are not because higher rates = mad voters = re-election chances lower.
For a long time, insurers have struggled to get sufficient rate changes approved. A literal quote for you during Covid was, “Son, I’m looking out my window at downtown {city} and I don’t see many cars on the road. We won’t approve the rate increases.”
This was with actual data of losses increasing due to supply chain disruption of auto parts, labor increases and many more things.
We basically had to write policies and hope for the best despite knowing the data / trend lines forecasting major losses.
Fast-forward and what do you have - major losses by all of these companies - and so these companies have two choices:
- Try to get rate approvals
- Exit the market or line of insurance
For California, the latter is the better option because at least for auto you cannot use credit, telematics or other very predictive attributes to price the risk. This results in essentially pooled risk which in aggregate drives up rates for all. Simply put, California officials did this to themselves.
For other states, the first option works but the rate increases are now significantly higher because it was near impossible to get any adequate rate increases last few years.
So, the bill has come due and it sucks for everyone as it’s either a) higher prices or b) can’t get insurance (Florida folks for certain types) or c) limited suppliers not being able to get reinsurance to share the risk results in higher rates that customers can’t afford so they go without.
Here in British Columbia, our provincially owned insurer (ICBC) saved significant money because of fewer claims during Covid. They even issued a rebate to most drivers. Though they also noted losing some revenue due to fewer or lower premiums being paid. The amount saved was far greater.
Why are insurance rates regulated by the government?
I understand that the state has a strong interest in ensuring that insurance companies are adequately capitalized, but I don’t understand the state interest in directly regulating premium prices. (Or is that not what you are referring to?)
One key part of the formula omitted is most major insurers while posting underwriting losses in certain markets, etc in 2023 posted annual net profit over $1.0bn. Am I right in thinking these sweeping rate increases and market exits are justified by protection of $250mm+ per quarter net income? If so, then are we right to blame anybody other than the insurers shareholders and owners for this current state? Wouldn’t $25mm per quarter net income be sufficient? Why does runaway profits maxxing have to apply to every market including public good markets like insurance?
Hi, This is a very informative post. I am trying to learn more about how the insurance industry works. Would you be open to sharing any resources (websites, books etc) that teach the 0 to 1 of insurance? Or can I DM you with a couple of questions? Thanks!
I'm not usually a "actually this is the fault of regulation" sort of person, but in this case it really is the fault of regulation. A bunch of states have laws saying premiums can't rise more than X% in a year, or can't rise at all without the approval of the state insurance commissioner. If circumstances have changed (e.g. wildfire or hurricane risk is now worse than we thought, and also labor market tightness and inflation means repairing/rebuilding is much more expensive) such that the insurance company can't insure you profitably without a rate hike they're forbidden to do, then of course they're going to drop your policy.
No one, including companies, should not be forced into contracts they don't want to enter into.
In practice, you are going to find they are never arbitrarily doing it. They are doing it because the price no longer covers the cost of providing the insurance. Just like when I decide the price of X isn't worth it anymore, I stop doing the transaction. The reasonable response would be to increase the price, but in some situations it's not possible due to regulation.
In some states it's the heavy regulation which is causing policy non-renewals. When governments fix prices below the market rate that inevitably leads to shortages.
It's a stressful situation for many property owners. They may not realize the impact that recent high inflation has had on repair costs, especially when prices tend to spike up higher after major disasters.
Nobody can be forced to insure you if they don't want to. I learned that on CNBC the other day, here's the segment talking about the state of home insurance in US.
If I have any sort of risk mitigation (file backup, fire alarms, spare tire, a generator, whatever) I can test that it works periodically. So I know I'm actually safe for the event.
For insurance, you can't know what bullshit they'll come up with to deny a claim when the time comes for it.
You're left with having paid for the insurance all that time for nothing! Much better to have put that money in a piggy bank instead.
I’ve known plenty of people who had legitimate accidents not of their own fault where insurance made them more than whole, and they would have not been able to afford the replacement if they had simply been saving for the same amount of time.
If you actually feel like you could recoup of the cost of paying for insurance by instead keeping the money in a piggy bank, you are buying too much insurance. There’s a sweet spot for insurance and overpaying for too little insurance is a you-problem.
I 100% agree with landedgentry. I don't really have any problem with insurers using drone photos - anyone can take drone photos of anyone else's property - and I'm not really a fan of the article calling it "spying" to imply some special kind of nefarious behavior.
But I do think the total bullshit is that companies are just using it to come up with essentially fake reasons to drop customers:
> Cindy Picos was dropped by her home insurer last month. The reason: aerial photos of her roof, which her insurer refused to let her see. ... Her insurer said its images showed her roof had “lived its life expectancy.” Picos paid for an independent inspection that found the roof had another 10 years of life. Her insurer declined to reconsider its decision.
I also don't have a problem if an insurer decides to leave a state entirely - that decision is essentially saying the state has made it impossible for them to adequately price risk, and that's something the state should fix if so desired.
But these BS cancellation reasons seem like a case of insurers wanting to have their cake and eat it too. I'm not very familiar with state-by-state insurance law, but I'm assuming they have to come up with some reason to drop a homeowner that already has a policy, so this looks like they're trying to find BS reasons to just drop potentially less profitable parts of their portfolio.
Similar reports are coming out of Florida. Generally, it seems the industry is pulling away from higher risk to climate change issues from larger storms or fire risk.
> If your roof is 20 years old and one hailstorm is going to take it off,
It amazes me that people in the US would even consider installing a roof that would only last 20 years.
In the UK, you wouldn't consider reroofing anything that your grandparents remember being installed. Ie. Stuff doesn't get reroofed till it's 100 years old. Even then, you'll normally inspect and only replace the damaged bits.
My 350 year old house still has part of its original roof and slate tiles etc.
Materials may cost that, but you are not getting a roof replaced for $1,700. Maybe $17,000 and even then it’s pushing it on the coasts especially. Labor and other overhead costs have really gone up and contractors don’t want to deal with small jobs. Sad really.
I’ve never seen slate roofs in California, so not sure if these are to code here. We looked at metal and other materials, but the problem is the weight is different, so now you are engaging an engineer to evaluate structure, submitting plans, dealing with code updates. Or just new asphalt shingles every 15-20 years. The payoff isn’t there and folks don’t tend to keep houses for generations, unlike in the UK.
>that requires capital - more than the average owner really has access too
It sounds odd to my ear to matter-of-factly state that the US is deprived due to being capital-poor.
I mean, I'm not disputing anything specific, but where do middle-class people have better access to consumer finance than the US?
If you'd asked me what single fact represents American homeowners to people interested in economics around the world, I would've guessed it's the access to 30-year fixed rate mortgages.
As far as I know this is a deliberate policy in the US, that has not been emulated by those envious of the American economy, but why I haven't a clue.
The UK has a massively milder climate than most of the USA, which provides significant assistance to things lasting.
As I noted in another comment below, roofing slate is essentially unavailable in the USA due to geology - what does exist is of much lower quality than a good welsh slate. Still, in some ways I agree with you: roofing materials in general in the USA are far less durable those used in the UK and Europe, for reasons that I don't entirely undestand.
That said, it amazes me that huge numbers of people in the UK live in essentially uninsulated and almost uninsulatable buildings. Sure, winters are mild, but anytime you have the heat on in the millions of homes built post-WWII, a huge amount of is just leaking through the brick walls. US stud framed construction has its problems if done carelessly, but it does have the benefit that its easy and obvious to insulate your walls to some degree, and not hard to do it to Passivhaus standards.
> The UK has a massively milder climate than most of the USA, which provides significant assistance to things lasting.
That makes sense. Roofs last a pretty long time in the PNW as well, for similar reasons. Mostly we just get rain. Not a lot of particularly hard freezes, our idea of big hail is 1/4 inch, etc. It's pretty routine for a garden variety "25 year roof" to actually do all 25 years, and even 30.
If you think that's wild, consider that the standard practice in Japan is to buy land and build new...even if that means tearing down the building that is currently built there. As a result, buildings are built more according to the rules of fashion, and building to last longer than the current occupant would seem like a foolhardy waste of money.
Although one thing to keep in mind is that earthquake-proofing building standards are also renewed about once per generation. I would absolutely refuse to let my family live in a house built before the post-Hanshin 2000 reforms (just look at the houses collapsed in the recent Noto earthquake, most of them predated even the earlier 1981 reforms)
My house is about 100 years old and still has the original concrete tile roof, with a stack of spare tiles under the house ready if needed.
An extension that was done in the 1980s has had to have its roof replaced once already due to what I have to assume was poor workmanship by the builder.
US has a lot of different weather patterns than the UK. UK sits at a latitude similar to that of states like Washington, Montana, and North Dakota. The choice of roofing materials is also influenced by building regulations and codes, which can vary between countries and even within regions, dictating the use of certain materials for fire resistance, insulation, and other safety and performance standards. Cost-effectiveness is a factor. Like Florida with crazy hurricanes, no reason to be spending money on something besides asphalt architectural style shingles. Some people do get metal roofs. But if its going to get blown off, then why?
>Like Florida with crazy hurricanes, no reason to be spending money on something besides asphalt architectural style shingles. Some people do get metal roofs. But if its going to get blown off, then why?
Tile and metal roofs last much longer than asphalt roofs in Florida, and while it's definitely more up front, they're generally more resistant to extreme weather (tiles are very heavy and metal is generally fastened down very well) and may get you an insurance discount. It's also for aesthetic reasons, as tile roofs are a very classic Florida look, and the stereotypical Key West house has a metal roof.
Has your 350 year-old house been hit by hail, some of which is the size of golf balls, in enough volume that the ground is as white as if it had snowed? Because that's a not-uncommon occurrence here in the midwestern US.
I think the biggest difference, though, is that the stereotypical single family US home of the 19th/20th century US expansion is on a large plot of land and has - so far - been one to get remodeled/expanded/revised several times in a hundred years. Houses are generally treated as mutable things, and people also often expect to move within a few decades, spending more to put in something that will hold up a hundred years instead of twenty seems foolhardy to many. If you sell it the buyer will likely want a cosmetic refresh; if you keep it, you likely will too.
No one is building homes to last 150 years in the United States, and very rarely do people want to buy homes built a century ago.
Where I live we call a century-old home a "tear down" because it's probably in horrible condition. There are a handful in my neighborhood but they get sold at a discount, usually for new construction.
That's wild. I live in one of the oldest cities west of the Rockies (granted, that isn't -that- old) and there are whole neighborhoods of century homes, and they're considered desirable. In the last 10-20 years a bunch have been gutted and upgraded -- new pipes, wiring, windows, etc. Maintains the charm but modern efficiency, convenience, and safety. Sure, some become tear-downs, but a pretty high percentage are sticking around. That old growth doug fir is awesome.
I just sold a century home myself, after my mother passed. There was a little bidding war for it, even in this market. There's a character to the century homes that you cannot get in a new home at anywhere near the same price point.
We are sprinting towards a dystopia of "computer says no". Decisions taken affecting your life and finances made by computers delivered by minimum wage powerless staff.
I'm sure healthcare insurance companies are inspired by the actions of the home insurance companies. "you declared you never smoked but our drone footage shows you and a plume of smoke in the same area. The AI detected it as cigarette smoke. Your coverage is cancelled and this is our final decision. "
Insurance works on the basis of (a) quantifying risk and (b) charging fairly for the protection. In the long-term, getting better at (a) and consequently, (b), is in everybody’s interest. For far too long, certain risk covers have been under-charged. At the end of the day, difficulty in finding affordable insurance, or any insurance at all, tells you something about the level of risk and the ability of insurers to charge appropriately for it. Regulators are often way behind the curve, to the detriment of insurers and consumers.
If this were true, health insurers would have taken a cudgel to the US hospital system decades ago and come up with a more efficient system. They haven't because an opaque system allows them to maintain their own opaque practices.
Health insurance companies don’t care about what your doctor earns in the same way home insurance companies don’t care about the cost of the roofer. They’re going to price in whatever that cost may be and call it a day.
Health insurance has it easier too because there’s not really a concept of correlated risk in human populations. Most people do a decent job avoiding hurting themselves but when a flood comes, there’s not a whole lot anybody can do.
And (c) in the long term influence the risk. Insurance companies have long worked to improve auto safety. This benefits everyone. This needs to be applied to more significant risks, like fire flood and storm.
I think we have to get much more serious about prevention. People are doing this:
We need to mandate this kind of building in new construction and modified construction.
It may be worthwhile to subsidize this, to help with turning existing high risks into low risks.
We need to be more severe on forbidding building in danger zones, and more accepting of insurers pricing these based on risk, so they don't have to leave the state, and others can be priced to more common levels of risk.
We also need to not allow rebuilding in areas that will have these problems again, without some way of mitigating. We should not have to pay for someone's third house in a flood zone. But if you can make it flood proof after the first one, great.
> This needs to be applied to more significant risks, like fire flood and storm.
It is. The NFPA (National Fire Protection Agency) writes the National Electric Code and other safety codes that get adopted into law as building codes. It was started by a coalition of insurance agencies.
Auburn, California, is a mistake and should be uninsurable, and I don't want either my tax dollars or my insurance premiums being used to subsidize the treehouse lifestyle of exurban home owners. Whether this specific person's roof is rotted or not isn't really the point. Right now, the real estate sprawl industry is running their printing press at 110% design speed, trying to convince everyone that people who live on the fringes of civilization are getting a bad deal. But from where I sit, in a fireproof building downtown, I see it differently. We need a massive correction in California, under which we stop subsidizing the firefighting, insurance, and roads that serve the sprawl.
I can understand feeling like both taxes and insurance premiums are too high, but the ability to make choices other than the specifically least risky one is one that fundamentally allows us to exercise our free will.
Those in Auburn are, by the same idea, subsidizing windows that get smashed when parking downtown, or even if you walk, the extra risk that you are hurt by someone while walking in a place with more crime per square mile.
You can live far away from a downtown and have to get your car smogged, because we wanted cars in the cities to provide for clean air.
I don’t mean we need to accept all risk in society, but for me there’s a very worrying trend against ANY risk/cost that doesn’t directly benefit the person advocating against it.
Ultimately I know it comes back to the current economic situation, because if everyone feels like they’re struggling there’s less thought to care for others.
The problem is not the sprawl, it’s the out of control construction costs due to regulation and insurance premium caps due to… you guessed it - regulations
Readit News
To the extent that the information is accurate, I agree. If you make an agreement with a company and buy insurance based on your statement that you don't have a pool, but then you do have a pool, I don't see any reason why we should be upset that you didn't get away with lying to the insurance company.
I pointed them to my address on Google Maps which has my correct location, but they said their system isn't wrong and the address coordinate mapping can't be changed anyway. Go away.
Then another insurance company told me the same thing. I thought maybe I was going to be uninsurable completely based off of a computer error.
Luckily, Lemonade has smarter systems and got my location right, so I was able to get insured with them. But I'm not sure what I would do without lemonade.
(The article and other things I'm reading suggest that cancellations are because footage finds trampolines and pools --- in which case I don't even understand how anybody can have sympathy. It's fine to have insurance risks on your property! But disclose them!)
False positive with similar circumstances would be a nightmare.
This is part of the risk one takes buying property. It’s more than offset by the benefits of buying property. Or else everyone wouldn’t be telling me what an idiot I am for renting.
They can decide not to renew for any reason - including that they just decided not to do house insurance at all anymore.
In all highly advanced countries (G7 and similar), insurance is insanely strictly regulated. If they cancel your policy for a b/s reason, and your protests are ignored, then tell the regulators. They will fix it quickly and slap a huge fine on the insurer.
If insurance companies can cheaply inspect everyone’s house from space, the end result will be to lower prices for people with homes in perfect condition and raise them for everyone else.
This is potentially problematic because the people with houses in poor condition are the least able to afford added costs in general.
I'll note that there's nothing at all redistributive about sneaking a trampoline onto your property, too.
Further, I'll note that working class people also take pride in their houses and pay to keep them up, and they too are being asked to subsidize people who are getting rate breaks from false assessments.
Later
My municipality will make an interest-free loan of up to $25,000 to cover the kinds of property repairs we're discussing, if you're income-qualified (ie: not too rich to just pay to replace your own roof).
If the goal is redistribution, then using accurate risk data as a starting point seems preferable.
Nobody will see lower prices. Perhaps these perfect homes might see slightly smaller increases year to year.
> houses in poor condition
The point of the thread is that they're dropping people for random noise in satellite photos. The house might be perfect, it's just the photo that's wrong. But they don't care.
I'm not that optimistic.
Insurance companies are very keen to get as much risk as possible off their books before the climate gets even more extreme in its volatility
Good goes with bad, so long as the bad goes, some good going too is undesirable but OK because they are aware if the catastrophic climate events looming
The insurance companies are behaving logically, probably legally IANAL, but for people who are simply caught in the wash it is unfair
This is part of the huge systematic disruptions we are all going to have to adapt to, or die from, due to climate change
Worrying times
Why shouldn't I want them to be running drones over our houses? Worrying times... for pirate trampolines!
Also, what is the aerial photo of a roof going to indicate in terms of “cataclysmic climate events looming”?
Also is it a coincidence or a pun that your name is worik and it is common for you to sign your posts with something about worrying?
Yes climate change has caused an upheaval in some geographical regions.
But there are many economic forces at play, from the treatment of real estate as an investment making every home a million dollars to insurers all being reinsured by a ever smaller pool of reinsurers.
I suppose you could offer an explanation for the satellite photo, but in that case you’ve already been dropped, so getting your policy reinstated is going to be a much bigger lift.
Sure, an undeclared pool is a problem. However, the insurance company should have to put the pictures into evidence and allow a legal rebuttal. Bureaucracies get things incorrect like "wrong address" all the time. People need the right to challenge these behemoths.
We've been through this once already in the US--it was called "rescission" in healthcare until the ACA made it moot by requiring coverage of preexisting conditions. It's a bad thing and invariably needs to be made illegal.
Your friend brings over a trampoline for Timmy's birthday party, you can take the risk of injury with no intent to claim on insurance. You can remove it before inspection.
Now you get pinged out of the blue by a satellite.
Adults don't need constant supervision. Should you believe they do, why not leave a multi-camera drone above your suburb and every insured house can be monitored for infractions 24/7.
There is no reason for the insurance company to withhold the image as evidence of a problem. Google Maps knows where my trampolines are, why is the insurance company hiding their cards?
An insurance company that surveils you 24/7 and makes sure you comply, is not covering any risk, it's a protection racket.
Yes, if they do a scheduled inspection, it is easier to defraud them.
If my insurance goes up, and it has, because of people defrauding insurance companies then I would fully expect my insurer to protect their bottom line and my rates by dropping those customers playing unfairly.
What I don't agree with is insurance companies punting the decision making process to an algorithm. At that rate we end up with Google "support" from a company that, as paying customers, we should be able to have a conversation with.
The last thing I'll mention is that it goes a long way to know your insurance broker. As an example I've known mine for the last ~15 years and they have helped remediate a number of, what I'll describe as standard process issues, when I've contacted them and in a few cases even proactively.
“What’s the big deal the data is already available, relax”. On top of that, it comes with an air of condescension as if no one had ever thought about that before.
One concern with things like this is that it’s different when you have to send someone out to inspect a home vs inspecting thousands of homes at a time. Once you have data in that volume, you can start to infer things that do borderline encroach on privacy.
What is the case here, and it might be what you were trying to point out, is that this kind of data is already collected regularly and is by the books legal. The concern here is simply at the application.
At this point the cats out of the bag and the best we can hope for is at least some level of protection through legislation.
> The strategic alliance allows customers seamless and integrated access to EagleView technology within Verisk’s Xactware platform
Xactware is a product that customers (read: insurance companies) use to figure out how much money to pay on a claim.
The whole idea is to speed up the claims process. Insurance agents don't need to go out to people's houses to examine roof damage. But we also had a department doing some pretty sophisticated stuff around preventing claims fraud, so I'm not surprised.
1: https://www.verisk.com/company/newsroom/verisk-and-eagleview...
Verisk makes the process notoriously difficult compared to other companies, you have to start an "ethics" report in their ticketing system
https://secure.ethicspoint.com/domain/media/en/gui/69464/ind...
The one thing in the back of my mind is also that there’s a risk of this backfiring over time. When you are unknown to potential creditors, employers, etc in whatever platforms they choose to use to look you up, that’s the ultimate sign of risk.
Can you share how to go about it? Do you have a blog post?
Some officials are elected and some are appointed which all depends on the state. Appointed officials are usually more reasonable and elected are not because higher rates = mad voters = re-election chances lower.
For a long time, insurers have struggled to get sufficient rate changes approved. A literal quote for you during Covid was, “Son, I’m looking out my window at downtown {city} and I don’t see many cars on the road. We won’t approve the rate increases.”
This was with actual data of losses increasing due to supply chain disruption of auto parts, labor increases and many more things.
We basically had to write policies and hope for the best despite knowing the data / trend lines forecasting major losses.
Fast-forward and what do you have - major losses by all of these companies - and so these companies have two choices: - Try to get rate approvals - Exit the market or line of insurance
For California, the latter is the better option because at least for auto you cannot use credit, telematics or other very predictive attributes to price the risk. This results in essentially pooled risk which in aggregate drives up rates for all. Simply put, California officials did this to themselves.
For other states, the first option works but the rate increases are now significantly higher because it was near impossible to get any adequate rate increases last few years.
So, the bill has come due and it sucks for everyone as it’s either a) higher prices or b) can’t get insurance (Florida folks for certain types) or c) limited suppliers not being able to get reinsurance to share the risk results in higher rates that customers can’t afford so they go without.
https://assets.ctfassets.net/nnc41duedoho/BNR4qtOTGPJuyQADtK...
I wonder if the difference was largely because of Canada's more strict lock downs. The roads were nearly dead here for quite awhile.
I understand that the state has a strong interest in ensuring that insurance companies are adequately capitalized, but I don’t understand the state interest in directly regulating premium prices. (Or is that not what you are referring to?)
For all? I'd think it reduces rates for some and increases it for others.
All of these things have either reduced or stabilized over the last two years, but prices seem to keep going up. Strange!
Dead Comment
In practice, you are going to find they are never arbitrarily doing it. They are doing it because the price no longer covers the cost of providing the insurance. Just like when I decide the price of X isn't worth it anymore, I stop doing the transaction. The reasonable response would be to increase the price, but in some situations it's not possible due to regulation.
It's a stressful situation for many property owners. They may not realize the impact that recent high inflation has had on repair costs, especially when prices tend to spike up higher after major disasters.
https://www.youtube.com/watch?v=xw8fpEpwMzA
If I have any sort of risk mitigation (file backup, fire alarms, spare tire, a generator, whatever) I can test that it works periodically. So I know I'm actually safe for the event.
For insurance, you can't know what bullshit they'll come up with to deny a claim when the time comes for it.
You're left with having paid for the insurance all that time for nothing! Much better to have put that money in a piggy bank instead.
If you actually feel like you could recoup of the cost of paying for insurance by instead keeping the money in a piggy bank, you are buying too much insurance. There’s a sweet spot for insurance and overpaying for too little insurance is a you-problem.
But I do think the total bullshit is that companies are just using it to come up with essentially fake reasons to drop customers:
> Cindy Picos was dropped by her home insurer last month. The reason: aerial photos of her roof, which her insurer refused to let her see. ... Her insurer said its images showed her roof had “lived its life expectancy.” Picos paid for an independent inspection that found the roof had another 10 years of life. Her insurer declined to reconsider its decision.
I also don't have a problem if an insurer decides to leave a state entirely - that decision is essentially saying the state has made it impossible for them to adequately price risk, and that's something the state should fix if so desired.
But these BS cancellation reasons seem like a case of insurers wanting to have their cake and eat it too. I'm not very familiar with state-by-state insurance law, but I'm assuming they have to come up with some reason to drop a homeowner that already has a policy, so this looks like they're trying to find BS reasons to just drop potentially less profitable parts of their portfolio.
How else are execs going to pay for that third vacation home?
What you can do, which the U.S. already does, is government-run insurance, socializing the losses among a population. Flood insurance, for example.
It amazes me that people in the US would even consider installing a roof that would only last 20 years.
In the UK, you wouldn't consider reroofing anything that your grandparents remember being installed. Ie. Stuff doesn't get reroofed till it's 100 years old. Even then, you'll normally inspect and only replace the damaged bits.
My 350 year old house still has part of its original roof and slate tiles etc.
I’ve never seen slate roofs in California, so not sure if these are to code here. We looked at metal and other materials, but the problem is the weight is different, so now you are engaging an engineer to evaluate structure, submitting plans, dealing with code updates. Or just new asphalt shingles every 15-20 years. The payoff isn’t there and folks don’t tend to keep houses for generations, unlike in the UK.
In order to have a better roof, you probably must have a better entire house under it also.
It sounds odd to my ear to matter-of-factly state that the US is deprived due to being capital-poor.
I mean, I'm not disputing anything specific, but where do middle-class people have better access to consumer finance than the US?
If you'd asked me what single fact represents American homeowners to people interested in economics around the world, I would've guessed it's the access to 30-year fixed rate mortgages.
As far as I know this is a deliberate policy in the US, that has not been emulated by those envious of the American economy, but why I haven't a clue.
As I noted in another comment below, roofing slate is essentially unavailable in the USA due to geology - what does exist is of much lower quality than a good welsh slate. Still, in some ways I agree with you: roofing materials in general in the USA are far less durable those used in the UK and Europe, for reasons that I don't entirely undestand.
That said, it amazes me that huge numbers of people in the UK live in essentially uninsulated and almost uninsulatable buildings. Sure, winters are mild, but anytime you have the heat on in the millions of homes built post-WWII, a huge amount of is just leaking through the brick walls. US stud framed construction has its problems if done carelessly, but it does have the benefit that its easy and obvious to insulate your walls to some degree, and not hard to do it to Passivhaus standards.
That makes sense. Roofs last a pretty long time in the PNW as well, for similar reasons. Mostly we just get rain. Not a lot of particularly hard freezes, our idea of big hail is 1/4 inch, etc. It's pretty routine for a garden variety "25 year roof" to actually do all 25 years, and even 30.
An extension that was done in the 1980s has had to have its roof replaced once already due to what I have to assume was poor workmanship by the builder.
Tile and metal roofs last much longer than asphalt roofs in Florida, and while it's definitely more up front, they're generally more resistant to extreme weather (tiles are very heavy and metal is generally fastened down very well) and may get you an insurance discount. It's also for aesthetic reasons, as tile roofs are a very classic Florida look, and the stereotypical Key West house has a metal roof.
I think the biggest difference, though, is that the stereotypical single family US home of the 19th/20th century US expansion is on a large plot of land and has - so far - been one to get remodeled/expanded/revised several times in a hundred years. Houses are generally treated as mutable things, and people also often expect to move within a few decades, spending more to put in something that will hold up a hundred years instead of twenty seems foolhardy to many. If you sell it the buyer will likely want a cosmetic refresh; if you keep it, you likely will too.
For Americans who don't know anything about housing in the UK, there is an interesting article at: https://en.wikipedia.org/wiki/Council_house
Being Wikipedia in 2024, I wouldn't assume it's not all AI hallucinated references, but still, it's interesting.
Where I live we call a century-old home a "tear down" because it's probably in horrible condition. There are a handful in my neighborhood but they get sold at a discount, usually for new construction.
I just sold a century home myself, after my mother passed. There was a little bidding war for it, even in this market. There's a character to the century homes that you cannot get in a new home at anywhere near the same price point.
I'm sure healthcare insurance companies are inspired by the actions of the home insurance companies. "you declared you never smoked but our drone footage shows you and a plume of smoke in the same area. The AI detected it as cigarette smoke. Your coverage is cancelled and this is our final decision. "
Climate change is coming for America’s property market Insurance is supposed to signal risk. Policymakers should let it https://www.economist.com/leaders/2023/09/21/climate-change-...
Parts of America are becoming uninsurable Blame growth in hazardous areas, climate change and bad policy https://www.economist.com/united-states/2023/09/21/parts-of-...
Health insurance has it easier too because there’s not really a concept of correlated risk in human populations. Most people do a decent job avoiding hurting themselves but when a flood comes, there’s not a whole lot anybody can do.
I think we have to get much more serious about prevention. People are doing this:
Fire safety:
https://www.npr.org/2023/08/24/1195331310/red-roof-house-fir...
Storm safety:
https://abcnews.go.com/US/mexico-beach-home-survives-hurrica...
We need to mandate this kind of building in new construction and modified construction.
It may be worthwhile to subsidize this, to help with turning existing high risks into low risks.
We need to be more severe on forbidding building in danger zones, and more accepting of insurers pricing these based on risk, so they don't have to leave the state, and others can be priced to more common levels of risk.
We also need to not allow rebuilding in areas that will have these problems again, without some way of mitigating. We should not have to pay for someone's third house in a flood zone. But if you can make it flood proof after the first one, great.
It is. The NFPA (National Fire Protection Agency) writes the National Electric Code and other safety codes that get adopted into law as building codes. It was started by a coalition of insurance agencies.
https://en.wikipedia.org/wiki/National_Fire_Protection_Assoc...
The subject property, by the way: https://www.google.com/maps/place/2350+Buttes+View+Ln,+Aubur...
Those in Auburn are, by the same idea, subsidizing windows that get smashed when parking downtown, or even if you walk, the extra risk that you are hurt by someone while walking in a place with more crime per square mile.
You can live far away from a downtown and have to get your car smogged, because we wanted cars in the cities to provide for clean air.
I don’t mean we need to accept all risk in society, but for me there’s a very worrying trend against ANY risk/cost that doesn’t directly benefit the person advocating against it.
Ultimately I know it comes back to the current economic situation, because if everyone feels like they’re struggling there’s less thought to care for others.
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