Property insurance tripled. Overnight.

[TomInTib]

Last week, the phone rang and I was informed that, due to all the fires out here and the fact that the house is on a redwood-covered hill, the property insurance policy was canceled, effective immediately.

When I asked for an explanation, all I got was a bucket full of crap. I was told that an "Inspector" had been out to inspect the property and had deemed it to be a "hazard". I was told he took pictures, measurements, etc.

Now, this is a rock-solid house with all underbrush cleared on a terraced hillside. The only way this place is going to burn is if it is fire-bombed.

And, without going into a bunch of unnecessary detail, there is no effing way that their "Inspector" set foot inside the walls of the property.

So I asked for a copy of the "Report" and got a total runaround.

After giving it much thought, I called the insurer (USAA) this morning to discuss what options (if any) I might have.

They actually told me that, due to all the recent fires, they could no longer incur the risk of something actually happening to a property like this one.

But they did offer to write a new policy, at triple the damned premiums of the one just canceled.

All of those thousands and thousands of dollars and never a single claim.

I feel like going out and making some news.

[slackmaster]

1. Time to shop around for a new insurance company

You do have choices.

Check with any organizations you belong to for deals. If you are over 50 you are eligible to join the AARP. It's cheap, and you will save more than the membership fee on homeowner's insurance and/or car insurance.

[TechBear_Seattle]

2. You may want to contact your state insurance commissioner

In Washington, we have an elected state official who oversees the insurance industry. His office has a number of ombudsmen who help deal with complaints about companies cancelling policies and other forms of abuse.

[SmileyRose]

5. I concur

A good 8 years (or more) ago -- A month before it was due, I started calling the insurance company for the renewal and got the runaround. When the renewal came for our homeowners they more than doubled the rate, sent the bill only to the mortgage company escrow address and never to us - our idiotic mortgage company paid it and sent us an escrow bill. The mortgage company sent me a copy of the bill and I realized why it happened, our hazard rating had been changed in error. The insurance company refused to fix it and refund the money (even if to my escrow account).

I called John Oxendine's office, Georgia's Insurance Commissioner, and within 10 days the money was back in my escrow account. I also refinanced before the next premium was due to get out of escrow and switched home insurance companies.

[TomInTib]

7. That's what I am going to do, TechBear.

But I am going to wait until the capillaries in my eyeballs quit rupturing and until my adrenal gland quits pumping.

Thanks,
Tom

[Donnachaidh]

12. Call the Ca. State Dept of Insurance

I worked for them years ago in Los Angeles. They WANT to hear about these things, so they can start stomping down this sort of nonsense. You'll get help from them.

[TomInTib]

29. Thank you, Donnachaidh.

I just knew if I threw this out on DU that I would get some constructive response.

Thank you so much. I really appreciate your help,
Tom

[liberal N proud]

3. That would be equivalent of an insurance company in Florida

canceling insurance because a hurricane was forecast.

[onethatcares]

4. bout quadrupled here,

from 745 to 2868.00 seems I'll be working for homeowners insurance the rest of my life.

[TomInTib]

8. Damn, and I thought I had it bad.

Hey, maybe you and I could buy a place in Utah or somewhere.

On second thought.....


Naaahhhh...

[MercutioATC]

9. Oops...reply to wrong post.

.

[Trillo]

6. A simple fix for this.

Homeowners insurance should be written to the same "length of time" as mortgages (typically 30-years), and they need to be otherwise legally tied to the mortgage owner (bank) instead of mortgage holder. After all, it's the mortgage owners that demand mortgage holders have insurance. The "fixed cost" of that 30-year policy could be written into the total monthly payment made to the mortgage company which the mortgage holder pays each month. Then, if an insurance co were to decide to cancel, the banks lawyers could have a field day with contract fraud.

[MercutioATC]

10. A simpler fix:

Don't buy or build a house in a historic wildfire area...or flood area...or hurricane area.

[stillcool]

11. those areas are spreading rapidly..

and history has nothing to do with recouping a loss after a one hundred year tornado, flood, water-spout(new to me), hurricane, etc.,

[MercutioATC]

13. True, but insurance companies are mostly raising rates in historically prone areas.

100-year flood areas aren't typically seeing a big increase in rates.

[Trillo]

20. The original idea of insurance was to "spread risk"

among participants. It seems the modern version is to slice it into risk markets of differing rates for the same coverage.

Many people buy a home to lock in a fixed costs for "shelter", whereas renting is subject to variances of the housing market, and there are indications that it's somewhat inelastic (when housing prices fall, rents may not fall). Homeowner's insurance, when entered into for 1-year periods, undermines the conception of "fixing" shelter costs, because those rates may change from contract year to year. Hence, that's why I claim homeowners insurance should be written for 30-year time periods. To match the mortgage time-length and fix the monthly costs for shelter.

[MercutioATC]

21. "Spreading risk" only works if those in less risk-prone areas pay the same premiums.

They don't.


Car insurance rates are based on many factors...why should homeowners' insurance be any different?

[stillcool]

51. I have read that flood insurance is

only available through the federal government now, and costs more than house insurance. I am sure with the weather being what it is, the odds are not in the Insurance Industry's favor. Time for them to get out of Dodge.

[tammywammy]

70. Flood insurance has been handled by the government for decades

It's not a recent change.

[CreekDog]

14. very helpful advice

:eyes:

(and nevermind that these boundaries change and one finds themselves in them unwittingly...and some of us just happen to be born in areas with high hazards --i live in earthquake country).

[MercutioATC]

15. My point is that if one chooses to live in an area historially prone to natural disasters,

one should probably expect to pay a lot more for homeowners' insurance.

[CreekDog]

17. one should expect their rates to triple in the course of a year?

have you thought about becoming an insurance industry lobbyist?

[MercutioATC]

19. You DO know how insurance companies make money, don't you?

Not by collecting premiums, but by investing those premiums.

The market's been bad.

Insurance companies have to offset those losses by evaluating their policies and either increasing the profit margin or eliminating policies in high-risk areas.

It's simply business.

[Trillo]

27. Sounds more like Gambling or Vegas, with one major difference,

losses are shuffled downwards (as increased costs) while profits are shuffled upward to a few executives (and theoretically shareholders).

In Vegas, if a human loses, they lose. In corporate America, if the corporation loses, they still win! Must be where the Win/Win paradigm comes from (a wee bit of sarcasm).

[MercutioATC]

36. It's how all of corporate America works.

Like it or not, it's the way things are...and, in this case, it's neither unethical nor unfair (IMO).

[lonestarnot]

58. Yeah! By ripping us the fuck off!

[roody]

16. That would be the state of California.

[MercutioATC]

18. Only parts of it.

I'm thinking most of the large population centers are relatively fireproof.

If one chooses to live in wildfire country (rural or suburban), one should probably expect to pay a lot for insurance.

[CreekDog]

23. and one would expect to be reimbursed properly if damage occurs

oh wait. :eyes:

you are making lots of assumptions.

[MercutioATC]

24. One should expect to be reimbursed according to the contract.

Nothing more, nothing less.

[CreekDog]

25. that's a good one

you been reading too much Adam Smith.

reasonable compliance with the contract is for suckers.

[MercutioATC]

26. Care to explain?

Reimbursements rates and exclusions are clearly spelled out in the contract. I'm not suggesting that some companies don't try to avoid paying rightful claims, but that's another matter entirely.

[CreekDog]

30. the other matter entirely is actually the matter entirely

unless you think his risk tripled in one rating period.

or unless you think that their investment's performance result in a threefold increase in premium.

or unless you think that that when investments were doing well that of course, his premium was reduced accordingly.

i don't.

[MercutioATC]

35. There's no rule, ethical or otherwise, that states that it has to be a 1-for-1 relationship.

If I were to guess, my premiums have been offsetting high-risk claims for quite some time.

An insurance company is free to change premiums according to their standards. Homeowners are free to shop for another insurance company.

[TomInTib]

32. There have been no fires here since anyone can remember.

Their excuse was an excess of underbrush.

Nothing grows under redwood trees.

Hell, the sunlight rarely reaches the ground.

I guarantee you the "Inspector" never even laid eyes on the house or the surrounding grounds.

[MercutioATC]

37. I don't know where you live in Tiburon, but...

...in Tiburon "200 acres are subject to high wildfire threat, and 1,750 acres are in wildland-urban interface threat areas".

http://209.85.215.104/search?q=cache:C35aq7rQu8cJ:quake.abag.ca.gov/mitigation/Tiburon-Annex.pdf+tiburon+california+wildfire+risk&hl=en&ct=clnk&cd=1&gl=us

[TomInTib]

38. There are no houses in those areas.

We allow no further development, here. Been that way for twenty years.

Most of the house fires here are caused by what we refer to as "Jewish Lightning" (just to repeat a colloquialism).

[MercutioATC]

39. Then I'd start shopping for another insurance company.

I had a friend in high school who totalled a brand new Porsche 944 Turbo his first year of college (15MPH, icy roads, sober).

State Farm offered to continue to insure him for $8k per year (this was in 1985). He went to another insurance company and got insurance for about a third of that.

Did State Farm do anything wrong by using their internal methods for assessing his risk and quoting a rate? No.


I realize that it's distressing, but your insurance company isn't doing anything ethically or legally improper. If you want to stay with them, by all means appeal the decision. Alternately, shop around.

[CreekDog]

41. it is unethical to state a reason for the increase

if that reason is a lie (the "inspection")

[MercutioATC]

53. First, you have to prove that it's a lie.

Not make spirited suppositions, PROVE it.

[CreekDog]

56. shows what you don't know...preponderance of the evidence

and so far, they can't document an inspection they claim to have made.

[MercutioATC]

59. Regardless, raising rates for ANY reason is within their rights.

Do you actually think that they can be held civilly liable for increasing rates for whatever reason?

[CreekDog]

61. if they tout a reason that they know to be false, then yes

not likely, but yes.

[MercutioATC]

62. I disagree, but one is obviously free to hire an attorney to pursue it.

It'd be a lot easier to just look for another insurance company...

[CreekDog]

63. look, do you understand what fraud is?

it's okay if they say, "screw you we'll charge you whatever we want."

it's fraud if they say, "we inspected your property and that's why your rates are going up," if they are lying about the inspection.

that is the law, notwithstanding your disagreement or lack of knowledge of it.

[MercutioATC]

65. Their practical remedy is to simply reinspect the property, reach the same conclusion,

and stand by their assessment.

What would be the insured's remedy? No court is going to force the the insurance company to provide coverage at a specified rate. If push comes to shove, the company will just refuse to insure him...which puts him exactly where he is now, looking for another insurance company.

[TomInTib]

43. I am going to contact the State Board of Insurance on Monday.

Take care, MercutioATC, and I thank you for your inerest in my plight.

This Democratic Underground just blows me away.

[MercutioATC]

52. Best of luck, but I'll bet they'll tell you the same thing.

Do what you feel you need to do, but you probably want to start looking for a new insurance company too.

[TomInTib]

54. Since i started this thread....

I got a phone call from USAA, saying they are giving me a 90 day extension.

That got me to thinking that I would like a new house, anyway.

[hisownpetard]

71. Which house are you talking about?

[elehhhhna]

45. lol not tooo PC...

its' called Italian Lightning in Chicago but it mostly hits failing resaurants & bars.

[loudsue]

22. Now THAT is an excellent idea!

And in a country that was not corporate controlled, I'd bet the citizens could get that made into law somewhere.

[Trillo]

28. I pretty much agree.

It's so sad to realize we've probably lost the republic.

[Froward69]

34. That is a spectacular Idea!!!

[Froward69]

31. Here in Colorado a Guy built

An adobe mansion. 15,000 so ft. His neighbors railed about how ugly and out of place it was. no insurance company would insure it. as it was made out of mud. :eyes:

then the Hayman fire came in 2002. His neighbors were burned out, the insurance companies paid through the nose to rebuild others houses. :o

His Adobe mansion got fired, that is Hardened as if put through a kiln. He got a broken window.:hippie:

now his neighbors have (mostly) rebuilt in Adobe.:toast:

and Insurance comps beg him to insure with them against fire. :rofl:


I would say keep your property cleared of brush and think of ways to fire proof the house. and go without. or sue for insurance... that's along shot I know... If the mortgage company wants to bitch let them find cheap insurance.

[TomInTib]

50. There is no brush (nothing grows under redwoods)

And the house is a veritable fortress.

They are just hoping that, with our demographics, we will simply roll over and pay up.

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[TomInTib]

42. Are you kidding?

Did you read my post?

I am going to have to do without a lot of things, now.

[lpbk2713]

44. Insurance companies have a license to steal.

And they don't even need a gun.

[TomInTib]

48. They have a license to do something else, as well.

I can barely sit down.

[file83]

67. Pay no attention to the robot...

...his sympathy chip overheated and is no longer functioning.

[ColbertWatcher]

40. I am sorry to hear that a person who works hard, and...

...follows all the rules is screwed once again by the insurance scamdustry.

I hate the insurance industry.

Back in July, I posted a poll asking "What is preventing the U.S. from getting Universal Healthcare?"

The clear majority of people (69%) believed it was the insurance industry. (Something interesting about the poll is that not one person thought achieving universal health care was too complicated.)

[Lifetimedem]

46. When renewing our auto insurance

I found out that our agent was screwing us. I had an accident 10 years ago and he never took us out of the "pool" insurance, thus keeping his commission % high on our policy.

So I shopped around and got a new auto policy and home owners and umbrella policy for less than our old auto insurance.

Look around , these guys work on commission and the more they can milk you for the more they make.

[bean fidhleir]

69. If that was recent, you might be able to claim against him.

An insurance agent might have that much of a fiduciary duty to you in your state - not to inappropriately leave you in a high-risk category. Worth looking into, anyway.

[Selatius]

47. The problem with insurance companies is that they exist to make a profit for shareholders.

Usually, this is done at your expense. See health insurance companies for an example of people getting fucked over.

[lonestarnot]

49. Make some news and file a law suit.

and INL.

[MercutioATC]

55. Just what we need...more frivolous lawsuits.

Look, homeowners' insurance is not a civil right. Companies offer insurance and one can purchase it or not.

A given company has the right to use whatever methods it deems appropriate to evaluate risk and has the right to charge whatever it wants in premiums. As long as they abide by the terms of their contracts, they're not doing anything wrong.


That's the thing I dislike most about some "liberals". They have no friggin' clue how business works and they seem to think that any unpleasant event is a result of some great injustice.

Geez...

[lonestarnot]

57. Sell insurance much?

[Phoebe Loosinhouse]

60. The part that stands out is "effective immediately"

I thought insurance policies were for a specific amount of time, usually 6 months to a year and then subject to renewal.

If you were still within the term of your policy, how could they cancel it "effective immediately"? This means that when you went to bed that night, according to them you were uninsured. What if you had an electrical malfunction and your house burned down that evening?

What's to stop a company from calling every homeowner during a hurricane watch and telling them they no longer have coverage "effective immediately"?

This definitely needs to be reported to the Insurance commission and even publicized in your local paper since other homeowners could be vulnerable to the same tactic.

Right this moment, insurance companies are declining to write new policies in coastal areas. Since the entire US population has the highest density clustered around the coasts, this impacts millions and millions of homeowners (and renters).

A person could make the decision to self-insure, but most mortgages don't allow that (and it's a stupid decision anyway).

Not to mention the shenanigans that go on even when you are covered - witness what happened after Katrina when insurers were doing everything in their power to deny legitimate claims.

Who is looking out for the average American in these cases? Your lawmakers are bought and sold by lobbyists - THAT is their constituency - NOT YOU!!!!

[CreekDog]

64. insurance is regulated, in CA i'm pretty sure they can't cancel you just like that

but i'm not sure.

with auto insurance, they used to have to give you 22 days or something like that.

[Lorien]

66. Exactly what I was thinking. When another hurricane heads my way

-despite the fact that I'm 50 miles from the coast-will State Farm suddenly cancel all Florida policies in it's projected path? No insurance company should be allowed to do this. Imagine if there's a deadly new flu epidemic; insurance companies could then just cancel health and life insurance policies and run away with their profits!

[file83]

68. I agree - how can they even do that?! That's not insurance, that's a SCAM!!!

The whole point of insurance is that they spread out risk across the nation. So some houses bet burned in California, so what? They are collecting money from people all over the fucking country - that should about cover it.

It's getting to the point where "insurance" is becoming indistinguishable from "savings". They charge so much now and then they can just cancel when ever they want, that you may as well have just thrown that money into a savings account - you'd be better off.

[dysfunctional press]

72. if the only way it's going to burn is "if it's fire-bombed"- why do you even need fire insurance?

:shrug:

[WritersBlock]

73. Damn supportive of them, eh.

Unless they've drastically changed their eligibility requirements, I'm pretty sure you have to be an active or former military officer, or have been named as a co-insured on an existing member's policy, in order to become a USAA member.

So if that's the case, then aren't they sort of treating veterans, or veterans' family members or survivors, rather badly by doing this?

That might not look very good to a PR department.

Just a thought.

[mnhtnbb]

74. When our house burned down last summer, our insurer (USAA)

tried to screw us out of about $170K on the structural part (replacement value) of our policy.
We had to hire a public adjuster to negotiate with them on our behalf and give the pa 10% of
the settled amount.

We ended up paying for demolition out of pocket ($23,500)and only getting 11 of the 12 months the policy
calls for lease payments for replacement house. Plus, they only pay maximum $500/tree to take
down landscaping damaged by the fire. We are sitting with an estimate of $5300. to take down
and haul away two very large oak trees that were burned enough that they are dying.

I don't know that any other insurance company is any better when it comes to claims, but USAA really screwed us.

We also turned out to be significantly underinsured for our contents, although they didn't give us any trouble about valuations for contents. It helped a lot having pictures and receipts for furnishings/artwork/jewelry/etc.