Quote:
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.
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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.