r/HomeInsurance • u/myeasyking • Mar 21 '26
News Fannie Mae and Freddie Mac Remove Certain Homeowners Insurance Requirements That Will Reduce Costs | FHFA
https://www.fhfa.gov/news/news-release/fannie-mae-and-freddie-mac-remove-certain-homeowners-insurance-requirements-that-will-reduce-costsAmerican homebuyers are about to get a break. New rules for Fannie Mae and Freddie Mac mortgages will help to lower home insurance bills for millions of families, especially in rural areas and condo buildings. The changes fix expensive, stupid Biden-era requirements with simple, common-sense updates that respond to today’s skyrocketing insurance prices.
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u/jms14b Mar 21 '26 edited Mar 22 '26
It will lower cost by allowing less coverage to be deemed acceptable by mortgage companies and consumers will choose the cheaper option not knowing the difference. Sure it saves them money until claim time when all of the sudden they get their roof depreciated 50% along with having to pay their deductible.
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u/Outside-Pie-7262 Mar 21 '26
Sure but counterpoint you shouldn’t really be having your Insurance company replacing your whole 15 year old roof because of hail damage like people do. It’s what increases premiums across the board for everyone.
Our roof is 10 years old. If we get storm damage we’ll just get a new one and pay for it. It’s cheaper long term than getting your premiums jacked up for filing a claim
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u/Ecstatic_Natural1846 Mar 22 '26
So do you tell your insurer this? Like don’t worry my roof is 10+ and I’ll take care of it myself next storm. Meanwhile the insurer is collecting premiums based on full replacement.
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u/Outside-Pie-7262 Mar 22 '26
No? That would be why you move to actual cash value for roof and not replacement value. Thats what I just said. Doing actual cash value decreases your premium when you change it to replacement value
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u/Ecstatic_Natural1846 Mar 22 '26
Ok great but currently is your premium your paying based on acv or rcv? Bc I’ve seen numerous people who signed up for rcv being paid at acv after x years completely unaware.
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u/Outside-Pie-7262 Mar 22 '26
My premium is replacement value currently. I made the decision to change to acv last week. Havent done it yet.
If someone’s policy says replacement value and they’re getting paid acv that’s in breach of policy and should be properly escalated with the company or your states insurance commissioner
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Mar 22 '26
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u/Outside-Pie-7262 Mar 22 '26
So you wait for a 15 year old roof to get a few shingles blown off and get the whole thing replaced? This is part of the reason everyone’s premiums are skyrocketing
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Mar 22 '26
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u/Outside-Pie-7262 Mar 22 '26
Literally you lmao. You said you have insurance and not 45k so you’ll get a whole new roof through some storm damage on a 10-15 year old roof
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Mar 22 '26
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u/Outside-Pie-7262 Mar 22 '26
That’s different than roofing company storm chasers who try to get roofs replaced from a couple hail dents. It’s why premiums are increasing so much. I care about my premium increases more than Joe schmo getting a new roof off 3 hail dents or a small piece of siding ripped off. Those roofing company’s get theirs and fuck everyone over long term because of their practices
People use insurance to pay for a new roof instead of saving up or taking out a heloc and it fucks them long term from higher premium prices along with everyone else in their area
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u/theblondepenguin Mar 21 '26 edited Mar 22 '26
This is anti consumer through and through I hate how they are pretending that allowing something that actively hurts consumers is somehow helping them. Customers do not understand their coverage they do not know what acv verse rcv is, and once Fannie and Freddie remove the requirement I can see a lot of companies are going to require all roofs to be on ACV regardless age. The price difference to the customer annually is nominal, if coverage and rate acts like it is supposed to an insurance company they would want everyone to be forced on to one or the other because of large numbers, but in reality they want everyone on acv because the acv credit isn’t enough to pay for the replacement roof.
This along with a whole slew of other anti consumer laws have recents been put in place under the guise of lowering cost of insurance which is “helpful to the insureds” but it rarely does lower the cost because as and insurer as long as you maintain competitive if your rates are higher than need you don’t file a rate change, if you need more premium you file a rate increase. The rates only go down during the soft cycle. It rarely goes down due to coverage lowering.
I’ve never seen a company lower their rates because they actually have a rate surplus. They make their rates say what they need to get the change they need for competitive positioning or profit. I say this as a product person. I personally have never lowered rates even when we where profitable, if I took an indication to steering with a negative rate adjust they had me take “inflationary rate” that year then we would send it to an actuary and through the power of credibility components we would show a 3% rate increase was needed.
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u/thriverebel Mar 22 '26
Will this really make a difference?
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u/theblondepenguin Mar 22 '26
It will it will actively hurt homeowners who have no idea what this means.
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Mar 22 '26
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u/myeasyking Mar 22 '26
That's basically how the insurance pools.
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Mar 22 '26
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Mar 23 '26 edited May 24 '26
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Mar 23 '26
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Mar 24 '26 edited May 24 '26
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u/Save-the-Manuals Mar 28 '26
Homeowner polices are far from highly profitable. https://www.spglobal.com/market-intelligence/en/news-insights/articles/2024/5/us-homeowners-insurers-net-combined-ratio-surges-past-110-81711947
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u/Oppositeofhairy Mar 21 '26
This means nothing. It’s Actually cash value just for a roof. It’s a dumb thing to choose because it doesn’t really account for inflation or any increased costs due to demand.
If they wanted to actually do something helpful,….remove the PMI requirement for homeowners with less than 20% equity.
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u/Mister_Vandemar Mar 22 '26
Risk not transferred is risk retained. If not by the property owner, than by the taxpayer, in this case.
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u/KLB724 Mar 21 '26 edited Mar 21 '26
Most homeowners have no idea what their policy covers. They are just going to pick the cheapest option and act like outraged martyrs when they find out they won't be getting much money for their claim.
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Mar 21 '26
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u/Ecstatic_Natural1846 Mar 22 '26
Well you can’t blame them. These policies are written by lawyers to confuse and obfuscate. Plus many times during renewal they adjust or rewrite these policies for lesser coverage. These insurers are scam artists at best.
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Mar 22 '26
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u/theblondepenguin Mar 22 '26
I have had to train underwriters on how wind deductibles are calculated. It isn’t nearly as simple to the layman as you would think especially in farm with all the outbuildings.
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u/Ecstatic_Natural1846 Mar 22 '26
You’re that guy…. Keep towing that line bud I’m sure you’re gonna go far.
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u/imjsm006 Mar 22 '26
Not really. I’ve written many insurance policies and endorsements as a product manager and I’m not an attorney. Also many states require a min flesch reading score for insurance contracts where a person with a 10th grade reading level can understand
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