Insurance Pro's - What do?

[cstreit]

So 2 years ago we had some bad storms. In two days the wind ripped off sections of my shingles creating a leak, and then 24 hours later flooded my basement with flooding and a sump pump failure. Result? Two claims. About $15k in total.

Several weeks ago we had a sewer failure that backed up 100 gallons of water into the basement destroying the ceiling and furniture. Another claim, about $8k.

Fast forward to today, my insurance agent calls me and says they will not renew unless we drop our water backup rider... ...which would be fantastically stupid for me to do considering we live on a flood plain.

I mentioned to him that we have resolved our exposure and been an ethical customer, taking care to resolve future issues as we learn them (multiple backup systems, etc..) to prevent this from happening again.

Of course I want to tell them to pound salt and leave them altogether. You can buy insurance, but if you USE it, well EFF YOU, we'll drop you. Okay... Well then I find out that the insurance companies have a central clearing house where they essentially publish all claims made and create what amounts to a blacklist, illegal in any other industry, but standard operating procedure in insurance I guess.

Need Suggestions on what to do. Is it even worth calling their customer service line to complain? If someone had simply explained the ACTUAL procedures to be (ie 3 claims in any 3 year span and you're dropped) I would have probably paid out of my pocket instead. ...but apparently THAT is illegal. They can't TELL you they will drop you, but perfectly legal to do so if you exceed an arbitrary threshold. It's not the cost of the claim, it's the NUMBER apparently.

What do? Find a new provider and hope they don't decline to offer coverage? If I had known, I would have just paid out of pocket. Really pissed off that I need insurance, but cannot really use it when needed....

[widgeon13]

At this point what harm does it do to complain, seems like any damage has already been done. I'd call them and give them hell.

[dan88911]

Yeah, That's how allstate (the good hands people) has come to be known as the middle finger people.

Well hope things workout for you going forward.
If you have a consumer complaint show in your area maybe you can get some traction.

[stomachmonkey]

Let them cancel your water rider then burn the house to the ground and use their money to rebuild your dream house complete with complete flood proofing then when you are all done drop them like $2 hooker.

[Baz]

If I didn't still have a mortgage I'd 86 my homeowner's coverage.

Lived here for 17 years now - including the hurricanes of '04 and '05 and never had a claim nor needed to.

If anything did happen I have scores of friends in the construction business who would be able to restore any damage for pennies on the insurance dollar.

In the meantime, until I pay off my mortgage - I'm a hostage.

By law we also have to have "Windstorm" coverage in addition to standard homeowner's so there's even more $$$ I could be stuffing away into an interest bearing emergency fund.

In fact in the 17 years here - I could have put away over $51K rather than send it to the insurance company!!!

To each their own but I live for the day I can tell them "Thanks - but no thanks!"

[sc_rufctr]

Originally Posted by stomachmonkey

Let them cancel your water rider then burn the house to the ground and use their money to rebuild your dream house complete with complete flood proofing then when you are all done drop them like $2 hooker.

(but probably why they have a black list)

[drcoastline]

Chris,

I am in the insurance business.

First you are right it is not the amount of a claim or even if you get paid that they look at. It is this history. Ie: number of claims.

You need to clarify a few things for me.

Incident #1. was roof damage causing a leak.

Incident #2. 24 hours your basement flooded. How did it flood from the roof leak or from ground water?

Incident #3 was a sewer failure? Can you explain what happened in more detail?

Have you suggested an increase in deductible?

[john70t]

Originally Posted by cstreit

In two days the wind ripped off sections of my shingles creating a leak

Covered under the contract?
Then demand payment to fix.

Originally Posted by cstreit

and then 24 hours later flooded my basement with flooding and a sump pump failure. Result? Two claims. About $15k in total.

Covered under thecontract?
Then demand payment to fix.

This may(or may not) be a separate claim with seperate deductable depending on weather the same storm was responsible for both incidents.

Originally Posted by cstreit

Several weeks ago we had a sewer failure that backed up 100 gallons of water into the basement destroying the ceiling and furniture. Another claim, about $8k.

Seperate claim.
Insurance co. should be able to recover the total from the city.
This should definitly be repaired immediately, because raw sewage and/or mold is very dangerous.

In the meantime, damages should be fixed asap, and the covered property brought back to working condition.
Details can be sorted out later.
Take notes of when/who/why/where and time of phone calls.
Swim upstream........
Hopefully it does't have to become a contentious situation.

[stomachmonkey]

Originally Posted by john70t

Covered under the contract?
Then demand payment to fix.


Covered under thecontract?
Then demand payment to fix.

This may(or may not) be a separate claim with seperate deductable depending on weather the same storm was responsible for both incidents.


Seperate claim and Insurance co. should be able to recover the total from the city/county.

This should be repaired immediately because raw sewage and mold is very dangerous.
In the meantime, damages should be fixed asap, and the covered property brought back to working condition.
Details can be sorted out later.

Uhm, you didn't really read OP's post did you, be honest now.

[john70t]

Originally Posted by stomachmonkey

Uhm, you didn't really read OP's post did you, be honest now.

No I didn't read OPs post coherently.
Mea Culpa.
I didn't realize fraud combined with economic defamation was so prevalent, institutionalized, and blatent.
Thank you, Stomachmonkey.

[cstreit]

Originally Posted by drcoastline

Chris,

I am in the insurance business.

First you are right it is not the amount of a claim or even if you get paid that they look at. It is this history. Ie: number of claims.

You need to clarify a few things for me.

Incident #1. was roof damage causing a leak.

Incident #2. 24 hours your basement flooded. How did it flood from the roof leak or from ground water?

Incident #3 was a sewer failure? Can you explain what happened in more detail?

Have you suggested an increase in deductible?

Thanks for responding.

Incident #1 yes the damage was causing a leak. A number of shingles had come off the roof. One particular area the wind pulled up shingles and a few days later during the next major rainstorm there was water trickling down a knee-wall. Clear water stain on the ceiling.

Incident #2. In the storm that identified the issue with #1, there was so much water that it overwhelmed the sumps, ran into the basement from the outside walkout basement door. Flooding part one occured at midnight. We cleaned up the basement and went to bed. Later the next day, the main sump pump gave out. Within a matter of 30 minutes the basement had 3-4 inches of water in it.

Incident #3. No clear cause but likely the saturated ground causes subsidence in the sewer pipe (leading to our septic tank). The coupler split creating a step in the pipe. Waste backed up against the "Step" creating a partial blockage right next to the house. My shower upstairs then went out the path of least resistance which was the first floor toilet. Filled the bathroom, ran through the floor an into the basement ceiling. Collapsed the ceiling and rained "Grey water" into the room. Several couches, lamps, new carpet. Electronics were spared luckily.

Does that help?

I won't mention the company at this point as I will give them a chance to make this right before I call them out publicly. I've tried to be a responsible customer by only claiming that which was direct and necessary. I also spent a lot of time and money through multiple backup systems and drainage fixes to mitigate future issues.

What bothers me most is that what I really have apparently is a "catostrophic coverage" policy and not a homeowners policy. Because if I use it, I lose it. If they had simply communicated clearly to me that I was at a threshold, I would have not filed the claim and taken care of this myself. ...but there is no going back now apparently.

What the offered me was an increase in my deducible from $500 to $2500 and DROPPING the water backup clause. I've most likely mitigated most every future occurence, save a long power outage when I am not home (which I am working on), but all things considered I'd be stupid not to have this clause. I don't mind a high deductible. Now that I know the "rules" I won't file a claim unless it's a BIG one going forward...

I could have easily stuck them for more, asking the cleanup/hazmat crew to do more work that the Ins. Co. would have had to pay for... more demo, moving furniture, etc.. ...but I did that myself so they wouldn't have to pay for something I could do myself. ...and this is how my conscientious decisions have been rewarded. A big ol FU. That's what bothers me.

The Agent told me it is illegal for them to tell me when they might drop me because it means they are intimidating me not to file... so it's illegal to tell me they will drop me if I file, but not illegal to do so because I didn't know? How messed up is that?

All of this over $23k which I've more than paid for with homeowners, vehicle, etc.. insurance over my time...

[A930Rocket]

How old is your house? I'm surprised that you have a basement in a flood plain. Everyone I know that has any finished space below FFE is self insured for that space.

[LWJ]

I don't really do personal lines but did you try another company? A critical point is whether you have been cancelled or not. And you have not been cancelled. Also, what is the time frame? In commercial, anything older than 5 years is invisible for the most part. There is a CLUE database (I believe it is called.) Why don't you see what a competitor can do for you first? I have Cincinnati insurance (personally) and am a big fan.

Good luck,
Larry

[drcoastline]

Hi Chris,

Remember one thing I am a NJ, PA, DE licensed agent so some information may be different where you live.

From your description it sounds to me to be more lack of advise/information from the agent vs. a "bad" company. Don't get mad at me but that is assuming the agent was consulted and asked their advise on each situation and how and if you should proceed.

Case #1- Sounds like a perfectly legitimate claim.

Case #2- was this filed as a separate claim from #1? Did you get paid? This sounds like a clear case of either ground saturation where water seeps in through the foundation (not a covered loss) or flooding. The sudden accumulation of ground water (covered by flood insurance) not a covered home owners insurance. Even if it were a flood and covered by flood insurance the only thing that they would pay for is systems to serve the building. Everything else below ground is excluded.

Case $3- Sounds like a case of back up of sewers and drains. Only covered by homeowners insurance. I'm reading between the lines here but the agent saying "you need to drop your water back up clause" says to me they are changing the type of policy. Thereby changing the perils you are insured against. Sewer and drain back up is not a stand alone endorsement that you can buy a-la-carte. It is built into the HO-3 homeowners policy. The only way to get rid of it is to buy a different type of policy. The problem is you will lose a whole series of coverage's by going to a lesser policy. Either you are not understanding what is being offered or the agent is trying to sugar coat the fact you are being non-renewed and offering you a lesser product.

When is your renewal date? Did you get a non-renewal in the mail?


Every claim gets reported regardless of whether you get paid or not or how much you get paid. Every claim that is made gets investigated to some degree. It may only be a claims manager reviewing the coverage and exclusions making a determination or an adjuster coming to the property for an inspection. Either way it costs them money. The claim history goes into a central data base that all companies have access to as part of their underwriting process. As Larry said it is called a "clue" report. Generally the look back is three years. It is not unlike your credit report. This way companies can assess the risk.

It sounds like you have had a streak of bad luck. Unfortunately, at this point you are a habitual offender in the eyes of the insurance company. They could care less if you have been with them one day or one hundred years. They look at the situation from a profit stand point. Also, don't ever try and save the company money. Get as much as you are entitled to every time. That is your agreement. When your policy is up for renewal all they are looking at is numbers. They don't have a person sitting in the back reviewing saying Ahh Mr. Chris was nice a nice guy he saved us $50.00 on a screen door we'll keep him. It's all about the numbers. This is where a good agent comes in.

So what the company sees right now is two years, 3 claims, $15K paid out and $8K paid out.

Get what ever the agent is offering you in writing. Start shopping. Don't lie to the agents when you speak to them. As they say garbage in garbage out. Not telling them the whole story will only get you a false estimate. They will find out in short order then you will have a bigger problem. Either your premium and deductibles will sky rocket or you will get a 30 day cancellation. You may very well find yourself in a situation where you can only get a basic fire policy for a while. Usually one year then you can look for a proper Home owners policy.

Keep me posted.

[drcoastline]

Oh yeah and if you are with a captive agent. Ie: All State, State Farm, Geico, Prudential etc. Go see an independent agent or two or three.

Since we are car guys I'll use the car analogy. The captive will try an make the 10mm bolt fit in the 8mm nut and hammer the s**t out of it until it goes in because that's the only bolt he has.

The independent has an assortment of bolts and can pick the proper nut for the bolt.

[cstreit]

Great advice thank you. I didnt call my agaent because both events happened on weekends and they arent around, so I called the company. I wanted advice and help right away as I was a little overwhelmed both times with the damage.

The agent called and said that the company was going to non renew when our policy was up in September and that we would get a letter stating this. Our only alternative was to drop the water backup and move to a larger deductible as I stated above.

We are going to shop around. I dont mind the latger deductible honestly as my big concern is major catastrophe, not small events like this. Small events that I *thought* were part of the reason we had insurance, but have now been educated that this is not the case.

In a way I feel a little dumb for not realizing all this as I knew it about car insurance, guess I thought homeowners was somehow different.

[drcoastline]

Hi Chris,

Sorry for the delay in posting I had a power problem with my lap top and had to have it sent out for an emergency repair.

The good thing is you have until September so you have all sorts of time. Generally a company/agent won't give a quote more than 45 days out from renewal. Get all your paper work in order and start shopping for a new policy in late July early September. Make sure you get all quotes in writing including endorsements and exclusions. State to the various agents you want an HO-3 exactly what coverage amount you want and the deductible. The unethical agents will try and only give you a price not a printed proposal stating coverage, deductible, endorsements and exclusions.

Again, I don't know the agent you have. If you like him see if he has other options available for you.

Insurance is there to pay for any covered loss, big or small. But it is not a maintenance plan like health insurance. It should generally be reserved for Catastrophic claims not the little things. I am still a little unclear about the circumstances involving claim #2 but I wouldn't consider any of your three claims as "little" and just brushed aside. As your agent I would have visited your house after each incident looked at the damage and had a discussion with you on how you wanted to proceed and my thoughts on how I thought you should proceed based on your situation. This is the balancing act. Yes it might be a covered loss but do we want to file the claim? Of course since you filed directly with the company over the weekend there really wasn't much your agent could do when he was informed so we have to let him off the hook.

As I said before it's a numbers game with insurance companies. You can be a loyal customer for 20 years no claims. They don't care. I have had customers get non-renewed because the company felt they were due for a claim. The companies obligation is to pay for claims during a given policy year. At renewal they will look to see if they are willing to renew the agreement for another year. Generally this is based on a three year loss history. The can say yes we will renew as is. We are no longer interested or we want theses changes.

While all of your claims sound legitimate. Some issues are popping up that has caused the company to take a closer look. The roof was damaged during a storm. But when the adjuster came to take a look at the damage, did he/she note the roof may be approaching the end of it's serviceable life? What is the likely hood of more roof claims? The house has a basement. We now have had two claims in two years involving the basement is this going to become a habitual problem?

Chris, do you have flood insurance? Was the agent present when the adjuster came to your home?

[Christien]

Originally Posted by drcoastline

As your agent I would have visited your house after each incident looked at the damage and had a discussion with you on how you wanted to proceed and my thoughts on how I thought you should proceed based on your situation. This is the balancing act. Yes it might be a covered loss but do we want to file the claim?

This is what I don't get about insurance. You're covered. Any major claim should be paid out. The client shouldn't have to wonder whether or not they should file the claim or pay out of pocket, because they're concerned what might happen to their policy or premiums. That's utter bull*****. The insurance industry makes their profit on gambling, in this case against mother nature, and last time I checked, they're making record profits (at least here in Canada). It's one thing to not write the policy because of a serious flaw in a house (as suggested, prone to flooding, poor sewer system, decrepit roof) but to write the policy then change your mind when you have to pay out a few times should be illegal, IMO. Rant over.

[cstreit]

My agent never said word one about any of this.. Never called to ask about the claim.

Its not like we have a poor maintenance record, hell, FEMA showed up at my house last week because they were canvasing the are because of all the wicked storms. Its been a rough 2 tears around here.

Worst part is, and its time for me to engage the civil authorities on this, every single major storm we have, our neighborhood loses power... EVERY one.

[drcoastline]

Originally Posted by Christien

This is what I don't get about insurance. You're covered. Any major claim should be paid out. The client shouldn't have to wonder whether or not they should file the claim or pay out of pocket, because they're concerned what might happen to their policy or premiums. That's utter bull*****. The insurance industry makes their profit on gambling, in this case against mother nature, and last time I checked, they're making record profits (at least here in Canada). It's one thing to not write the policy because of a serious flaw in a house (as suggested, prone to flooding, poor sewer system, decrepit roof) but to write the policy then change your mind when you have to pay out a few times should be illegal, IMO. Rant over.

Christien,

As I said any major claim will be covered. For that matter any minor claim will be covered so long as it is a covered peril. Let me clarify if I can the conversation I have with clients on whether or not to file a claim. Understand that I work along the NJ coast so my market is a little more finicky than most of the rest of the country. 97% of the insurance policies in my market are underwritten by what is called the excess/surplus market. The company you all will know best is Lloyd's of London. The Allstates, State Farms, Prudentials are no where to be found. The risk is to high for the premium they charge.

So here is my example. We have a house insured for $500,000.00 and they have a $1,000.00 deductible. We have a storm that causes some roof damage. A few shingles blow off and the roof leaks causing some staining to the sheetrock ceiling. The first thing I ask is if they have taken steps to minimize the loss. the customer is going to need an estimate to repair the damage regardless of whether a claim is going to get filed. I advise my clients to get three estimates. More if there is to much variation between the three. Once we get the estimates we have real life repair costs. The client is now in a position to decide how to proceed financially. I explain to the client exactly what cstreit is going through so they can weigh their options.

So lets say the estimates come in around $1,500.00. The insured is responsible for the first $1,000.00 the company will payout $500.00. Some clients don't have the extra funds to pay out of pocket and file the claim. Others don't think it is worth the risk and pay out of pocket. It all depends on the individual.

Christien, You are correct insurance is a gamble for the company, and just like in gambling the gambler has the right to walk if they don't like the odds, have lost a few hands, don't like the location, etc.

In cstreit's case I think he has had an unfortunate streak of bad luck and hopefully it is over and this time next year it will all be water under the bridge. The fact is he filed three claims, the company fulfilled it's obligation and paid those claims. Over a several year period. They have now decided they don't want to take the same bet any longer. They are still willing to bet on cstreit but with some changes, a higher deductible and a change in covered perils. csreit has the option of taking them up on their offer or looking elsewhere for what he want's.