Could decorative rocks cause insurance cancellation?

[indyman]

Indiana.
Our home's smallish back yard has a river rock dry creek bed cutting through the lawn, installed by the former owner to deal with drainage issues. The river rock creek bed is flanked by about a dozen large "decorative rock" boulders. Needing to fix some aspects of this system, we had an excavator look it over. His recommendation was to remove it and replace it with a swale, saying, among other things, that if an insurance inspector saw these boulders sticking out of our lawn, he might want our homeowners insurance cancelled. He claims to know of instances where this happened.

Since river rock dry creek beds seem a ubiquitous solution to drainage issues, (the method being lauded all over the web) it never occurred to us there might be an insurance issue. Is there? I have Googled homeowners insurance boulders river rock dry creek bed accident and variants and found no links to support the excavator's claim. Is he right or wrong?

 

[FlyingRon]

He's full of poop. I've never once in four decades of home ownership seen an "insurance inspector." Further, I have no idea why they would care. Even if they did, they'd probably tell you that they need them removed. Furhter, while they might refuse to renew, it's unlikely there's any ability to cancel.

 

[indyman]

"Property insurance is known as a loss leader..."

I've never once in four decades of home ownership seen an "insurance inspector.

I doubt he used that term, basically just stated that if the insurance company became aware of this they might threaten cancellation. We bought a house about 10 years ago and during the process talked to a hard nose insurance company man who threatened to cancel if the roof didn't measure up. The roof was at the end of its life, but not leaking and we were probably just asking questions. We didn't like the attitude presented though and went with a different company.

BTW, in researching this, I read that, "Property insurance is known as a loss leader in the insurance industry, with insurers paying an estimated 119% more in claims that premiums received over the last twenty years." The inference being, that insurance companies are more likely to be cautious. Thanks.

 

[adjusterjack]

He's full of poop.

You got that right.

I've never once in four decades of home ownership seen an "insurance inspector."

Seeing them would be unlikely as homeowner insurance inspections are drive-bys that check the exterior and the grounds. Insurance companies did that routinely in the past but these days with google aerial and street views I don't think it's very prevalent any more.

Further, I have no idea why they would care.

Insurance companies care that a property meets the underwriting requirements.

Even if they did, they'd probably tell you that they need them removed.

The standard procedure would be written notice to the homeowner that a deficiency exists and the homeowner would be given the opportunity to correct the deficiency.

Further, while they might refuse to renew, it's unlikely there's any ability to cancel.

Yes, there is. State insurance laws allow an insurance company to cancel midterm for a serious underwriting deficiency. Doesn't happen often, but it could. Mostly would be non-renewal if a condition wouldn't or couldn't be corrected.

 

[adjusterjack]

We bought a house about 10 years ago and during the process talked to a hard nose insurance company man who threatened to cancel if the roof didn't measure up. The roof was at the end of its life, but not leaking and we were probably just asking questions. We didn't like the attitude presented though and went with a different company.

Roofs are a serious underwriting consideration. Doesn't take much wind to blow off a roof that has already reached the end of its useful life and insurance companies can end up paying for a full replacement under most homeowners policies. So, yes, they will be hard nosed about roofs.

Boulders in the back yard, not so much.

I have a row of 200 pound boulders set about every 10' along the front of my property at the street. No problem with my insurance company.

BTW, in researching this, I read that, "Property insurance is known as a loss leader in the insurance industry, with insurers paying an estimated 119% more in claims that premiums received over the last twenty years." The inference being, that insurance companies are more likely to be cautious. Thanks.

I don't know where you read that but the reality is that insurance companies make money on property insurance. A 19% underwriting loss likely factored in many years of hurricane damage in the gulf states and wild fires in western states but property insurance is heavily reinsured (google reinsurance) and many insurance companies share in the risk and still make profits.

By the way, never take insurance advice from a contractor, never take medical advice from an auto mechanic, never take legal advice from your swimming pool cleaner. Get it?

 

[indyman]

Never say never?

I don't know where you read that but the reality is that insurance companies make money on property insurance. A 19% underwriting loss likely factored in many years of hurricane damage in the gulf states and wild fires in western states but property insurance is heavily reinsured (google reinsurance) and many insurance companies share in the risk and still make profits.

Read it at www.surfrate.com/homeowners-insurance-guide/what-to-do-if-your-homeowners-insurance-is-cancelled.html#sthash.v6Qa1TSs.dpuf
The article was written in 2008. An excerpt:
In the 1990s, insurance companies could offset losses with the profits and investments they made from commercial insurance, until the commercial insurance market began to lose steam. And after 2000, losses from a rash of natural disasters in the U.S. and new claims arising from the health threats of toxic mold problems only made the situation worse. To counteract these financial woes, insurers have increasingly added exclusions to homeowner’s insurance policies and increased the number of cancellations and non-renewals based on claims history and enhanced claims records and loss tracking enabled by the industry’s collective adoption of the comprehensive loss underwriting exchange (CLUE) records database.

By the way, never take insurance advice from a contractor, never take medical advice from an auto mechanic, never take legal advice from your swimming pool cleaner. Get it?

That is the reason I came here. OTOH, some might say, "Never take insurance advice from anonymous posters on the web." You know what I mean?

Thanks.

 

[xylene]

An excavator operator told you you needed to remove rocks an boulders... or else something BAD would happen.

Don't listen to this chump.

 

[justalayman]

Did the guy give a price to rework the area? Sounds like he was inventing work for himself.

 

[TheGeekess]

Indiana.
Our home's smallish back yard has a river rock dry creek bed cutting through the lawn, installed by the former owner to deal with drainage issues. The river rock creek bed is flanked by about a dozen large "decorative rock" boulders. Needing to fix some aspects of this system, we had an excavator look it over. His recommendation was to remove it and replace it with a swale, saying, among other things, that if an insurance inspector saw these boulders sticking out of our lawn, he might want our homeowners insurance cancelled. He claims to know of instances where this happened.

Since river rock dry creek beds seem a ubiquitous solution to drainage issues, (the method being lauded all over the web) it never occurred to us there might be an insurance issue. Is there? I have Googled homeowners insurance boulders river rock dry creek bed accident and variants and found no links to support the excavator's claim. Is he right or wrong?

What did your insurance agent say when you asked him/her your questions?

 

[STEPHAN]

I've never once in four decades of home ownership seen an "insurance inspector."

I had to deal with them about 4 times in the last 3 years on 3 different properties. Three times I got a cancellation, but was later able to reinstate. It might differ from state to state. Here in my area of FL we basically only have citizen.

 

[adjusterjack]

Read it at www.surfrate.com/homeowners-insurance-guide/what-to-do-if-your-homeowners-insurance-is-cancelled.html#sthash.v6Qa1TSs.dpuf
The article was written in 2008. An excerpt:
In the 1990s, insurance companies could offset losses with the profits and investments they made from commercial insurance, until the commercial insurance market began to lose steam. And after 2000, losses from a rash of natural disasters in the U.S. and new claims arising from the health threats of toxic mold problems only made the situation worse. To counteract these financial woes, insurers have increasingly added exclusions to homeowner’s insurance policies and increased the number of cancellations and non-renewals based on claims history and enhanced claims records and loss tracking enabled by the industry’s collective adoption of the comprehensive loss underwriting exchange (CLUE) records database.

The 1990s was 15 to 25 years ago. I don't know what that site is trying to accomplish by discussing ancient history.

Check out the National Association of Insurance Commissioners stats for 2005-2014 and you'll find that the property casualty insurance industry enjoyed underwriting profits for 5 out of the 10 years with the last two years showing an underwriting profit and the whole 10 years showing a positive return on revenue:

http://www.naic.org/documents/topic_insurance_industry_snapshots_2014_pc_report.pdf

That is the reason I came here. OTOH, some might say, "Never take insurance advice from anonymous posters on the web." You know what I mean?

Anonymous, yes, but 35 years in the insurance industry gives me a bit of "street cred."

Bottom line: No need for worry about the decorative rocks in your back yard.

 

[indyman]

Swale

Did the guy give a price to rework the area? Sounds like he was inventing work for himself.

Yes, he gave a price. As for inventing work - maybe, but he says the yard is so small they will have to be moved anyway - offsite while the work proceeds. He has other reasons for favoring the swale for drainage and he might be right about that.

 

[adjusterjack]

Yes, he gave a price. As for inventing work - maybe, but he says the yard is so small they will have to be moved anyway - offsite while the work proceeds. He has other reasons for favoring the swale for drainage and he might be right about that.

Ask yourself this: Does the current setup drain the yard satisfactorily?

If the answer is yes, then it ain't broke, so don't fix it.

 

[indyman]

Erosion; Contractor bows out; Shades of gray

Ask yourself this: Does the current setup drain the yard satisfactorily? If the answer is yes, then it ain't broke, so don't fix it.

Unfortunately, the answer is not simple. Most of the water moves off the property, but erosion is an issue.

The excavator returned with an associate for another look-see and subsequently said, given the lay of the land, he didn't think there was much he or anyone could do to effect dramatic changes or improvement. He made some suggestions that might divert some of the water coming down from the roof, but basically passed on initiating any significant project here. Whatever the accuracy of his opinions about insurance, obviously, he is honest and wasn't looking to sell us a dream. Perhaps I should have mentioned at the outset that he was recommended by a property management company that I trust. Things are not always black and white. Thanks to all.

 

[tammy8]

Inspections and reinspections are a part of life in the insurance market today. IF your insurance company has an issue, they will normally give you a time period to correct any issues before cancelling. The only issue I might see in these boulders are liability issues but I really don't think that would be a common thing.