11–20 of 59 posts
After realizing I've really stopped buying insurance except a core of home, car and liability with high deductables. If you're a responsible person who is careful insurance really isn't worth the cost.
Meanwhile, "normal" countries are solving these problems in reasonable ways. Back home in Central Europe, you get state mandated car insurance at pre-negotiated rates that are based on the car, not the driver.
US insurance is a scam.
The biggest scam I've seen in real estate is mandatory windstorm insurance (TWIA & friends). I've been through multiple hurricanes where claims were involved and it would have been significantly better if the premiums were simply left in a savings account to compound over time.
Any kind of disaster that would require complete reconstruction of your home would likely violate whatever "act of god" clause happens to exist in literally every policy. Not having insurance is not equivalent to being at risk for the total property value (in any practical sense). $10k goes a long way when you are repairing wood and plastic that is mostly still standing. If you are fortunate enough to have a few years between catastrophes (as typically you do), then it's generally never a problem.
A simple rule for today's economy: If you cannot afford the property on cash basis, you should probably try to find a cheaper property. The risk of mandatory insurance premiums creeping up into the danger zone is too high. Even if it starts out OK, you may find that your escrow account requirements start to outpace your principal and interest obligations over the years.
USAA doesn't operate its own mortgages anymore. They sell them day one which usually results in another sale or company acquisition within a year. The cure? Take your business elsewhere. FCUs don't have this same reputation and generally open with less predatory rates. USAA had a great run of building trust and is speedrunning torching it.
Who should people use instead? I switched to USAA because of their good reputation after bad experiences. I’ve heard good things about Farmers and USAA. Never anything positive about another.
For mortgages, I can recommend Digital Federal Credit Union (DCU), now merged with First Tech. They held the note and the servicing.
is it easy or hard to start an insurance company? why isn't there more competition when it comes to insurance?
To me, the hardest part is competing for the small number of intelligent people who are interested in such a dull, fundamentally scammy business.
> Last year, former USAA CEO Wayne Peacock received $14.1 million in total compensation from five USAA insurance companies for working slightly more than a quarter of 2025 before his retirement. That was a 47% increase from the $9.6 million he received in salaries and bonuses in 2024. Other executives at USAA also received pay boosts in 2025. At about 1M policy holders that’s about $14 per policy. Not bad for a coupl…
Most of the issues here stem from problem the sales as opposed to the claims process. Customers are, structurally, under-educated on what their policies actually cover and this produces unrealistic expectations about what they should file claims for.
Emphatically, this is not their fault but an industry-wide issue that has complex causes like brokers/salespeople getting increasingly squeezed to produce as well as the intense time pressure under which many folks purchase their homeowners insurance policy (folks are often sprinting to check this box to secure a mortgage). Sadly, there is also a strong correlation between consumers experiencing worse socioeconomic conditions and failed claims. This, to me, generally suggests that some behavioral insights should be brought into the sale and management of the financial product to better protect these buyers' interests.
It is important to highlight and understand this point of failure because: 1) claims (even failed ones) are one of the easiest ways to get your rates jacked up as this is a category that insurers are allowed to price on. 2) The common response to articles like this is that "of course insurance should cover more things" but this counterintuitively risks creating more dead-weight loss for consumers broadly in the form of coverage for things that we simply shouldn't be insuring (and instead should be maintaining and replacing).
All that is to say: ask your broker / agent what's in your contract. Do it BEFORE you have a claim to file as in some cases speaking to them (especially captive agents) may in and of itself trigger a claim.
AI-native brokerages (like what we've built) are part of the solution to this problem since well-constrained LLMs can help buyers and users get a much better sense of what their contracts actually cover, and whether or not they should submit a claim.
is it easy or hard to start an insurance company? why isn't there more competition when it comes to insurance?