My homeowners insurance company broke up with me
My homeowners insurance company broke up with me
Good morning,
My homeowners insurance sent me a letter saying they will be canceling my policy renewal due to too many claims. Here are the facts (if they matter):
- We've had 3 claims in 10 years at our current home, none were directly caused by us (think weather, frozen pipe, etc)
- We had the same insurance at our previous home and had no claims in 7 years
- We use the same company for auto insurance on two cars
- My extended family has used this company going back to the 1950's
My plan is to call my agent on Monday to see if there is anything that can be done to reverse the decision. If not, I guess I'll shop my auto insurance at the same time since the loyalty factor is gone.
Questions:
- Has anyone else been in this situation recently and what did you do?
- I assume I"ll be flagged in some fashion when looking for a new provider. How much should I anticipate rates rising?
- I'm in the middle of a refinance with Better.com. Anyone use their services for comparing rates?
- Any other guidance you can offer?
My homeowners insurance sent me a letter saying they will be canceling my policy renewal due to too many claims. Here are the facts (if they matter):
- We've had 3 claims in 10 years at our current home, none were directly caused by us (think weather, frozen pipe, etc)
- We had the same insurance at our previous home and had no claims in 7 years
- We use the same company for auto insurance on two cars
- My extended family has used this company going back to the 1950's
My plan is to call my agent on Monday to see if there is anything that can be done to reverse the decision. If not, I guess I'll shop my auto insurance at the same time since the loyalty factor is gone.
Questions:
- Has anyone else been in this situation recently and what did you do?
- I assume I"ll be flagged in some fashion when looking for a new provider. How much should I anticipate rates rising?
- I'm in the middle of a refinance with Better.com. Anyone use their services for comparing rates?
- Any other guidance you can offer?
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Re: My homeowners insurance company broke up with me
I've never had that happen to me, but I've never submitted a claim against a homeowners policy.
Re: My homeowners insurance company broke up with me
I shop around for new insurance whenever a rate increase goes beyond ~5%. I don’t always switch, but that is the trigger at which I feel it is worth my time to shop around and take advantage of competition. When I do shop, I cycle between a few very reputable insurance companies - any of which I would be happy to have. I’ve even returned to insurance companies that previously raised their rates too much - and they’re happy to have won back my business. Rate structures and underwriting criteria change frequently as insurance companies adjust their risk exposure, so a company that no longer wants you as a customer one year (either by non-renewal or raising your premium) may try to win back your business in a future year.
The idea of a company being loyal to a customer is a bit of a misnomer. A company will only remain “loyal” if they think they can continue to profit by retaining you as a customer. They may have customer friendly policies that make it seem like they are loyal, by forgiving certain “transgressions” but even those are based on a business model that weighs the pros and cons. Unlike a personal friendship, they don’t really care about you as a person, with all of your wonderful attributes. Your wit, kindness, generosity, or shared interest in bicycling mean nothing to them.
The idea of a company being loyal to a customer is a bit of a misnomer. A company will only remain “loyal” if they think they can continue to profit by retaining you as a customer. They may have customer friendly policies that make it seem like they are loyal, by forgiving certain “transgressions” but even those are based on a business model that weighs the pros and cons. Unlike a personal friendship, they don’t really care about you as a person, with all of your wonderful attributes. Your wit, kindness, generosity, or shared interest in bicycling mean nothing to them.
Steve
Re: My homeowners insurance company broke up with me
I also have never had this happen because I try to avoid the situation by having a high deductible. It really makes you think about a claim. I have had a claim in the past (25 years ago) due to a catastrophic situation where a hurricane dumped trees on the house. Since then, the high deductible has given me pause for making a claim on things like replacing my roof for minor hail damage.
Folks I know who went through this typically find insurance. You just got to start shopping. Your rates may or may not rise, you could even get surprised. You'll get it, but you may have to adjust your expectations, including possibly raising a future deductible to keep things affordable. You may be locked out of the premium brands. You just have to find out. This will be some work, especially if you bring along the auto insurance.
BTW, insurance companies don't give a darn about you being some huge long time customer, and they really don't care about your family. They just care about your patterns over the recent last years. It could also be that this insurer is lightening up insuring in your area if they feel the region is at risk. They'll start picking off people who have more risk factors.
Folks I know who went through this typically find insurance. You just got to start shopping. Your rates may or may not rise, you could even get surprised. You'll get it, but you may have to adjust your expectations, including possibly raising a future deductible to keep things affordable. You may be locked out of the premium brands. You just have to find out. This will be some work, especially if you bring along the auto insurance.
BTW, insurance companies don't give a darn about you being some huge long time customer, and they really don't care about your family. They just care about your patterns over the recent last years. It could also be that this insurer is lightening up insuring in your area if they feel the region is at risk. They'll start picking off people who have more risk factors.
- AllMostThere
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Re: My homeowners insurance company broke up with me
There will be no reversal of them dropping you as a customer. Start looking around for new insurance (all policies - Home, Umbrella, Auto and Life). You may be surprised in the savings you might find. Consider this as a wakeup call to continually look for ways to save money on Insurance products. Insurance companies have zero loyalty to you as a customer, any claims of loyalty are nothing more than marketing strategies and hype. It's all about the profit margin they can gain from you. Time to move on.....
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Re: My homeowners insurance company broke up with me
More than 2 claims in 10 years will definitely get you canceled with nearly any carrier. Plus, it will affect your rates for all insurance lines you carry for 7+ years. Your agent will not be able to do anything, these decisions are all made by computers and automated risk profiles.
Homeowner's insurance should be thought of as catastrophic coverage - raise that deductible to "this would really suck but won't bankrupt me" levels and avoid making claims unless it reaches that threshold.
This is true of most insurance, but doubly so with homeowner's since it is typically your largest asset and you're required to have insurance by whoever holds your mortgage.
Homeowner's insurance should be thought of as catastrophic coverage - raise that deductible to "this would really suck but won't bankrupt me" levels and avoid making claims unless it reaches that threshold.
This is true of most insurance, but doubly so with homeowner's since it is typically your largest asset and you're required to have insurance by whoever holds your mortgage.
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Re: My homeowners insurance company broke up with me
Other insurers will know your claim history from your CLUE report. Talk with your agent to discuss insurers that will cover you with multiple claims in x years. You can get a 2nd opinion from an online insurance broker such as selectquote.com. Your home insurance options will improve once the claims age and fall outside of a certain period (it may be 5 or 7 years).
I had two sizable home insurance claims ($50k each) in 3 years due to damage from two tropical storms. My agent said that a 3rd claim (didn’t happen) in the same 5-year period would cause us to be dropped by our insurer.
I had two sizable home insurance claims ($50k each) in 3 years due to damage from two tropical storms. My agent said that a 3rd claim (didn’t happen) in the same 5-year period would cause us to be dropped by our insurer.
Re: My homeowners insurance company broke up with me
Without knowing exactly what the three claims were the result of and the amount of the claim, it is difficult for us to recommend a course of action going forward to prevent this from reoccurring.
Generically, you should have as high a deductible as you can afford. Think of homeowner's insurance as "catastrophic" coverage. It is best used only for losses that you are unable to bear.
Consider the exact nature of your three claims. Frozen pipes, as noted, are almost always preventable. It appears from your post history that you actually had to have your hardwood floors replaced twice due to two separate water pipe issues. The insurance company likely expected that after the first claim there would be steps taken to avoid a repeat of the event. But without knowing more about the situation of the frozen pipes we don't know if there were any mitigating or unusual circumstances beyond your control.
You mention weather. Was one of the claims a roofing claim? Roofing issues are a significant problem for insurance companies, both as a result of roofing contractors exaggerating the extent of any hail or weather damage and a result of some homeowners using a roofing claim for a "free" replacement roof when the existing roof is at the end of its expected lifespan. I'm certainly not suggesting that either was the case if you did have a roofing claim, just that those claims now trigger closer scrutiny by insurers both as to the validity of the claim and as to non-renewal of customers who have such a claim in their history.
As others mentioned, your insurer will not reconsider. Your best option moving forward on the insurance issue is to get a number of quotes from an independent agent and directly from insurers for all of your insurance needs (home, car, umbrella). And if you care to provide more detail about your claims history, some of us with more extensive knowledge or experience in the appropriate area can likely suggest some prevention tips to avoid such claims in the future.
Good luck!
Generically, you should have as high a deductible as you can afford. Think of homeowner's insurance as "catastrophic" coverage. It is best used only for losses that you are unable to bear.
Consider the exact nature of your three claims. Frozen pipes, as noted, are almost always preventable. It appears from your post history that you actually had to have your hardwood floors replaced twice due to two separate water pipe issues. The insurance company likely expected that after the first claim there would be steps taken to avoid a repeat of the event. But without knowing more about the situation of the frozen pipes we don't know if there were any mitigating or unusual circumstances beyond your control.
You mention weather. Was one of the claims a roofing claim? Roofing issues are a significant problem for insurance companies, both as a result of roofing contractors exaggerating the extent of any hail or weather damage and a result of some homeowners using a roofing claim for a "free" replacement roof when the existing roof is at the end of its expected lifespan. I'm certainly not suggesting that either was the case if you did have a roofing claim, just that those claims now trigger closer scrutiny by insurers both as to the validity of the claim and as to non-renewal of customers who have such a claim in their history.
As others mentioned, your insurer will not reconsider. Your best option moving forward on the insurance issue is to get a number of quotes from an independent agent and directly from insurers for all of your insurance needs (home, car, umbrella). And if you care to provide more detail about your claims history, some of us with more extensive knowledge or experience in the appropriate area can likely suggest some prevention tips to avoid such claims in the future.
Good luck!
Re: My homeowners insurance company broke up with me
It's not clear from OP's post whether the agent is independent or not, but if not independent, I would certainly find a good one who can help you. I agree a frozen pipe is preventable, and would also say that no insurance company is going to care how long or how many of your extended family has used them.
- RickBoglehead
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Re: My homeowners insurance company broke up with me
The third claim was what caused the cancellation. You say "in 10 years" but I suspect that the time from the first to the third claim was much less time. My insurance company, who I've been with since 1980, and my grandfather was with for 50 years at that point, told me very clearly that 3 claims in a 3 year time period would cause cancellation. We had this discussion when I broke a phone, and realized my tablet that had been broken 3 years prior would have been covered (I have a rider for this coverage). The tablet was outside the 3 year window (and past the claim deadline), but they paid it and it wouldn't count. They also stated that a water claim on a 2nd property, since sold, doesn't count because it's a separate policy. Nor do the auto policies count - it's just the homeowner policy. Cracked my phone's screen several weeks ago. We plan on possibly moving in the next year, so if we do I'll claim that phone prior to moving, and it won't count against the new home policy.
Avid user of forums on variety of interests-financial, home brewing, F-150, EV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
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Re: My homeowners insurance company broke up with me
Our friends received a similar letter about 4 years ago. They did talk with their insurance agent and were allowed to stay. Their premiums rose significantly.
Re: My homeowners insurance company broke up with me
And here's another thing: frequency matters more than claim amount.
- quantAndHold
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Re: My homeowners insurance company broke up with me
3 times in 10 years is a lot. To an insurance company, you’re definitely a risky customer.
For comparison, we’ve had 2 claims in 24 years. Once in 1998 when a tree fell down, and once for theft in 2017.
For comparison, we’ve had 2 claims in 24 years. Once in 1998 when a tree fell down, and once for theft in 2017.
Re: My homeowners insurance company broke up with me
I could have? How do you know the nature of the frozen pipe and what maintenance I performed?
Re: My homeowners insurance company broke up with me
Thanks for all of the responses. I agree that loyalty doesn't matter but provided it for context.
I guess I didn't fully grasp how insurance companies evaluate risk on an individual level. For example, me leaving an upstairs bathtub running and it overfills running flooring vs lightening striking my house. One I control, one I don't. I figured the company would draw a distinction between the two. I was wrong.
I guess I didn't fully grasp how insurance companies evaluate risk on an individual level. For example, me leaving an upstairs bathtub running and it overfills running flooring vs lightening striking my house. One I control, one I don't. I figured the company would draw a distinction between the two. I was wrong.
- Doom&Gloom
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Re: My homeowners insurance company broke up with me
State Farm canceled my HO ~25 years ago due to a couple of claims in the previous 5 years or so. My agent happened to be a friend. I called him, and he intervened and the policy was continued.
Re: My homeowners insurance company broke up with me
+1
I had 2 claims within the last 7 years. When I recently solicited new quotes for my car, home, and umbrella I discovered some companies refused to quote new home insurance and others would require "underwriting" due to the 2 claims. Stupid me, 1 of the claims was for $0. I petitioned to have the $0 claim removed from my CLUE report. It was promptly removed within 30 days and I was then able to get the quotes and without underwriting. Finally, I think it is state specific regarding what types of claims count towards the claim hits.
- quantAndHold
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Re: My homeowners insurance company broke up with me
Extreme weather can put pipes at risk in buildings that aren’t well insulated, especially if the power is off. But there are things you can do, like keeping a faucet dripping, to mitigate the problem. You can also improve the insulation (and power, if that’s a problem) situation so that it doesn’t happen again. Have you done that?
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Re: My homeowners insurance company broke up with me
This brings up a good point…
OP, be sure to review your CLUE report. I posted above about having 2 claims. Later, when I went to get HO policy quotes, a question came up as to whether I had made 2 or 3 claims. The insurance company had reported a 2nd payment for one of the claims in a way that made it appear like a separate claim (which it wasn’t - I had negotiated a higher additional settlement due to claim adjustor errors).
Re: My homeowners insurance company broke up with me
how do you get your CLUE reportHomeStretch wrote: ↑Sun Jul 25, 2021 7:46 am Other insurers will know your claim history from your CLUE report. Talk with your agent to discuss insurers that will cover you with multiple claims in x years. You can get a 2nd opinion from an online insurance broker such as selectquote.com. Your home insurance options will improve once the claims age and fall outside of a certain period (it may be 5 or 7 years).
I had two sizable home insurance claims ($50k each) in 3 years due to damage from two tropical storms. My agent said that a 3rd claim (didn’t happen) in the same 5-year period would cause us to be dropped by our insurer.
RIP Mr. Bogle.
Re: My homeowners insurance company broke up with me
https://consumer.risk.lexisnexis.com/request
Back when I requested mine I believe there was something like a $15 fee, but it was waived if you had a "rejection" letter from any insurer. I got my CLUE report free, it was 76 pages long. After I rec'd the report I called back to get instructions on how to get the $0 claim removed.
EDIT: this is probably a better place to start
https://consumer.risk.lexisnexis.com/
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Re: My homeowners insurance company broke up with me
See the section “How to get a copy of a CLUE report” here:
https://www.bankrate.com/insurance/home ... ue-report/
The Fair Credit Reporting Act entitles you to one free report annually. There are separate reports for auto and home.
Re: My homeowners insurance company broke up with me
FWIW my car insurance sent me a letter telling me they were dropping me a few years back (two parking lot dings in 3 years), I asked my agent for new quotes, and they came back and said the original insurer reconsidered and I ended up staying. So yeah, they could reconsider, never know.Doom&Gloom wrote: ↑Sun Jul 25, 2021 10:41 am State Farm canceled my HO ~25 years ago due to a couple of claims in the previous 5 years or so. My agent happened to be a friend. I called him, and he intervened and the policy was continued.
Re: My homeowners insurance company broke up with me
Thanks for the reply. Yes, we did have the faucets dripping, the doors to our cabinets and closets opened, and the heat running a bit warmer than normal. Both the remediation company and restoration group said it was unavoidable. There was a small air pocket behind the drywall. I had no way of knowing outside of knocking down walls to check. We typically don't have these types of issues where I live but my insurance company alone had 100+ similar cases that same day in my area. It's since been fixed.quantAndHold wrote: ↑Sun Jul 25, 2021 10:54 amExtreme weather can put pipes at risk in buildings that aren’t well insulated, especially if the power is off. But there are things you can do, like keeping a faucet dripping, to mitigate the problem. You can also improve the insulation (and power, if that’s a problem) situation so that it doesn’t happen again. Have you done that?
Re: My homeowners insurance company broke up with me
Thank you! Looking in to this now.HomeStretch wrote: ↑Sun Jul 25, 2021 11:40 amSee the section “How to get a copy of a CLUE report” here:
https://www.bankrate.com/insurance/home ... ue-report/
The Fair Credit Reporting Act entitles you to one free report annually. There are separate reports for auto and home.
- illumination
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Re: My homeowners insurance company broke up with me
Happened to my parents way back when, they were like 25 year State Farm customers, had a house fire claim (the fire department said was a lightning strike from a nearby tree) and then they were dropped shortly afterward.
My advice is to have zero loyalty to any insurance company and constantly shop around for the best rate.
My advice is to have zero loyalty to any insurance company and constantly shop around for the best rate.
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Re: My homeowners insurance company broke up with me
With 3 claims in 10 years you will probably be paying more or not taken at all as a new customer. My brother bought a house around 12 years ago. He almost couldn't close because there was a water damage claim by a previous owner many years prior. Almost no one would write a homeowner's policy even though the claim was old and the roof was since replaced (though he had no receipt/invoice since the prior owner did it). He tried all kinds of companies and finally found one, but it was a close call. Now I check the CLUE report on a home before making an offer.
Re: My homeowners insurance company broke up with me
since you were with them so long, there is a high chance you can do better on your rate when you finally shop this around. good luck!
60-20-20 us-intl-bond
Re: My homeowners insurance company broke up with me
It may not be entirely your claim experience. Insurance companies review their portfolios of policies just like we review our investments. External factors like alternative investments, other risks , desire for market share, geography, etc likely influence what risks in certain lines they want to take. You might have fit into their portfolios last year but not this year regardless of your claims.
Re: My homeowners insurance company broke up with me
thanksdiy60 wrote: ↑Sun Jul 25, 2021 11:26 amhttps://consumer.risk.lexisnexis.com/request
Back when I requested mine I believe there was something like a $15 fee, but it was waived if you had a "rejection" letter from any insurer. I got my CLUE report free, it was 76 pages long. After I rec'd the report I called back to get instructions on how to get the $0 claim removed.
EDIT: this is probably a better place to start
https://consumer.risk.lexisnexis.com/
RIP Mr. Bogle.
Re: My homeowners insurance company broke up with me
thanksHomeStretch wrote: ↑Sun Jul 25, 2021 11:40 amSee the section “How to get a copy of a CLUE report” here:
https://www.bankrate.com/insurance/home ... ue-report/
The Fair Credit Reporting Act entitles you to one free report annually. There are separate reports for auto and home.
RIP Mr. Bogle.
Re: My homeowners insurance company broke up with me
Just wanted to thank a few people for posting their experience with how claims get attached to specific policies & homes, plus the excellent CLUE report review suggestion.
I'll note that some smaller or in-state only insurance companies may be more forgiving on claims. I'm thinking of the individual Farm Bureau companies mostly given our families experience with them. They have all their customers in the state, and are facing pricing & advertising pressure from much larger national companies. That makes them more sensitive to customer loss and more reliant on word of mouth - plus more in touch with their area and they tend to know their customers better. They also tend to have closer relationships to individual offices/agents - which can help with a number of things. Lastly, at least when it comes to local events triggering claims - ie hail, extreme freezing, storm damage, etc - I'd guess they're more likely to ignore those sort of claims when looking at how risky of a customer you are. Our Farm Bureau took a huge huge hit from a hail storm that hit large areas of the state in like 2010 - everyone needed a roof. They didn't drop a single person (there was an email) and just beefed up their own insurance policy & reserves to better handle it in the future rather than just cancel customers like a larger company may do. I'll also note that our insurer is much more lax on various rules/policies - they are just pretty laid back in terms of details - another benefit of a smaller company I'd guess. They really don't care about some things other insurers care about - ie a F-450 CC on a personal auto policy - are you using it for commercial use? No - no problem. Hauling a truck camper that exceeds it payload capacity somewhat? Send us a picture - looks fine - no problem. Prices are also very competitive for us - I get at least 10 quotes every 3 years - I've had a few places beat them on either the home or auto by maybe $100/yr, but not on the combined price (home, vehicles, umbrella).
I'll note that some smaller or in-state only insurance companies may be more forgiving on claims. I'm thinking of the individual Farm Bureau companies mostly given our families experience with them. They have all their customers in the state, and are facing pricing & advertising pressure from much larger national companies. That makes them more sensitive to customer loss and more reliant on word of mouth - plus more in touch with their area and they tend to know their customers better. They also tend to have closer relationships to individual offices/agents - which can help with a number of things. Lastly, at least when it comes to local events triggering claims - ie hail, extreme freezing, storm damage, etc - I'd guess they're more likely to ignore those sort of claims when looking at how risky of a customer you are. Our Farm Bureau took a huge huge hit from a hail storm that hit large areas of the state in like 2010 - everyone needed a roof. They didn't drop a single person (there was an email) and just beefed up their own insurance policy & reserves to better handle it in the future rather than just cancel customers like a larger company may do. I'll also note that our insurer is much more lax on various rules/policies - they are just pretty laid back in terms of details - another benefit of a smaller company I'd guess. They really don't care about some things other insurers care about - ie a F-450 CC on a personal auto policy - are you using it for commercial use? No - no problem. Hauling a truck camper that exceeds it payload capacity somewhat? Send us a picture - looks fine - no problem. Prices are also very competitive for us - I get at least 10 quotes every 3 years - I've had a few places beat them on either the home or auto by maybe $100/yr, but not on the combined price (home, vehicles, umbrella).
Re: My homeowners insurance company broke up with me
What insurance company ?
Re: My homeowners insurance company broke up with me
Another good reason to pay off your mortgage. No insurance necessary for a paid-off house.
Home insurance is almost worthless. It's only useful for a catastrophic loss, the odds of which are miniscule. If you make a claim, your rate gets jacked up to more than make up for the insurer's loss. If you have a loss and don't make a claim, then having insurance was pointless.
Feel free to name this insurer.
Home insurance is almost worthless. It's only useful for a catastrophic loss, the odds of which are miniscule. If you make a claim, your rate gets jacked up to more than make up for the insurer's loss. If you have a loss and don't make a claim, then having insurance was pointless.
Feel free to name this insurer.
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