Quote:
Originally Posted by Evans, Marv
Don't get me started on home owner's insurance. I live in an area designated to have an elevated danger for brush fires. When I first moved here, I talked to my State Farm agent of 25 years saying I needed to get coverage. His reply was they didn't write policies in those types of areas. I'd had my home, cars, apartments, etc. insured with them for over a quarter of a century and I was dead meat to them. I ended up getting coverage through Farmers. My place is really built and maintained to resist fire. The fifth year they raised my premium 37+%. I asked them if it was legal to raise premiums that much, and of course they said it was. I also pointed out their premium raise was obviously meant to squeeze policy holders out in areas like mine. I finally found another company (Chubb) to write a policy and wrote a letter to Farmers saying I'd never buy insurance for anything from them citing their premium raise. Got a letter from them saying the premium raise was well within State guidelines, blah, blah, blah. I could say more, but I'll stop, except to say it seems companies can insure who they want, where they want, what they want, for how much they want and the State helps them right along.
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You weren't dead meat to them, they didn't insure homes in a high risk fire area. They can't discriminate. If they insure you they must insure everyone. They didn't say no to just you. They said no to everyone that asked in that area. Companies like Farmers, Prudential, State Farm, Geico and so on. What we call captive companies always under cut the rate the first few years to get you in. Typically, they will add what is called an inflation guard which automatically raises the value of your home 10% annually. That means your premium goes up 10% every year. They also know 90% of homes have a mortgage and 90% of those mortgages have escrows. That means the customer never sees the bill. So when the premium goes up $100.00 the customer sees is the monthly mortgage payment went up $8.33 a month. Again 90% of the time over looked. By the fifth year your premium is up more than 50%.
If they did in fact raise the rate it probably was within state guidelines. Admitted carriers like above are required to get state approval to raise premiums.
"it seems companies can insure who they want, where they want, what they want, for how much they want" why shouldn't they be allowed? If your premium is $1,000.00 a year and your house is insured for $200,000.00 and you have $500,000.00 in liability you don't think the insurance company has the right to say yes I will take that risk or no? Or better yet make certain demands to minimize their risk? Like cut down the sixty foot dead oak tree leaning at forty five degrees over your roof? Or you need to get rid of that dog that has already bitten three people? Or No we are not insuring your house in a high risk fire zone because even though your house may be fire PROOF, WHEN the fire rips through here NEXT TIME you will still will sustain $75,000.00 in smoke damage to the house (covered) and another $30,000.00 in smoke damage to your contents (also covered). Thanks not interested in that risk it's not a matter of IF it will happen it's a matter of WHEN and how OFTEN.