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Ask the Architect

Insurance is largely a gamble, Part 2


Q. Continuing from last week’s column, when the question was: My home insurance premiums have increased over the past couple years. We haven’t been affected by storms or floods, yet my rate has gone up each year. From what little I can gather from them, my home is supposedly increasing in value, which is hard to believe, since relatives in the flood area had depreciation factored into their insurance payout, so they got less than what they needed to rebuild and had to borrow money from us. Is there anything we can do to our home to avoid getting these increases? I feel like I’m being shaken down, since I have to carry home insurance to have my mortgage. What can we do?

A. Remember that insurance is a game of chance, in which the insurance company is the casino. You bet you’ll never have a catastrophe, and therefore should pay less, and the insurance company is betting you will have an event, using all kinds of sophisticated analysis to support their claim to need more money in order to hold your mandatory bet. You can do things to your home to decrease the death rate potential or limit the damage. But remember the rule of diminishing returns, where you can spend a lot of money and the insurance company can say, “Oh well, that’s nice,” but keep your rates just where they are, again all by opinion, not statistics. I’m not aware of insurance court, where you can appeal their subjective decisions.

Simple things, like smoke and monoxide detectors, which are required by law, make a difference, especially if you pay for service with central station monitoring, one that will immediately notify the fire department and police. Keeping your home in new condition, with up-to-date roofing, siding and rain gutters, helps. Replace bad windows and doors that have rotted frames, and add locking devices, motion sensors and reinforced door frames.

Where you live makes a difference, so you have to be aware when buying that being in low-lying areas or near open water will cost much more. Finished basements, old boilers and hot water tanks, sump pump pits and French drains all increase rates. The shape of your roof, the height and proximity to a fire hydrant and fire station all make a difference, as does the kind of siding. Cement board siding is much more wind-resistant, and since all of Long Island was reclassified as a high-wind zone, the stronger the exterior materials, the lower the risk.

But, just so you see the whole picture, you’re installing these better materials to protect yourself and the insurance company, because, by doing all these better things for your home, you don’t necessarily reduce your premiums. They may even be increased due to your home’s perceived increased value. Thus the law of diminishing returns, and you get no thank-you note from the insurance company for decreasing their risk, either. Good luck!

© 2019 Monte Leeper. Readers are encouraged to send questions to yourhousedr@aol.com, with “Herald question” in the subject line, or to Herald Homes, 2 Endo Blvd., Garden City, NY 11530, Attn: Monte Leeper, architect.