Homeowner's Insurance

[Al1961]

Received a nasty surprise in the mail last month - homeowner's insurance premium increase of 40% to $1,732/yr.

Called up to bitch about it, and ended up having the bill revised to $978/yr.

Issues to look out for:
1. Insurance company "upgrading" your coverage - to grossly high levels. Apparently we had "platinum" coverage - covering furs, extensive jewelry, high-end furniture... none of which we actually have.

2. House replacement costs are inflated over time by the insurance company based on their own formula (well the formula they use for billing anyway). This was about 50% too high.

3. Agent offered a "discretionary" discount. Seems anyone who cares enough to call them up and bitch gets the discount - the automatic premium increases only get paid by those who can't be bothered to complain.

Lesson learned - invest 15 minutes and save over $700!

Al

 

[frugalnacho]

My insurance did the same thing, but I didn't even bother to call (I sent an email to my agent and told him I am done with him).  Mine jumped about 60-70%.  I shopped around and went with a different company.  I don't want to stay with an insurance company that is going to try and pull that bullshit on a loyal customer. 

[nawhite]

I'm always a little nervous to confront my homeowners insurance because I know I can't find better in my area. I have a wood-pellet stove, a 3 season room, sheds, soon solar panels, I've had a claim in the past year, and a dog that has attacked other dogs before (he's a shelter dog we are having good success rehabilitating). I also need umbrella coverage. Basically, I have tried to find alternatives and every agent I talk to looks at that list and says "uhh, we can't insure you, sorry" or "we'll give you this great rate on homeowners, but your umbrella coverage will be X" which is 100% more than I currently pay for it. So I'm really hoping my insurance company doesn't try to pull a fast one on me.

[Dyk]

AI1961:

I had the exact thing happen to me.  My house was covered for over $400,000 while it is only worth $225,000.  We had some strange additions also.  In the end we ended up with a 50% lower bill.

Lesson learned, anywhere your money is going, read and understand every line.  Make sure you are spending your money on what you need, not what someone else tells you.

Nice work!

[Mr. Frugalwoods]

Every year my agent adds some BS options "Just to make sure your home and family are safe" and every year I call him up and politely ask for them to be taken off.

The rates we pay are good, just have to fight for them every year.

[frugalnacho]

I have found they always try to increase the coverage far more than it should be too.

me: I see here that you place dwelling replacement at $240k.  That number doesn't make sense to me, I bought it for $69k.
ins: Oh but it will be expensive to replace the whole house if it burns down.
me: Yeah but not that expensive.
ins: Oh you'd be surprised.  You have to demolish and haul the whole house away.  Then you have to rebuild from scratch.  You bought your house in used condition, it will be much more expensive to build it from scratch.
me: Uh, then how are home builders building brand new comparable houses within 1-2 miles and selling them for $80-100k?
ins: ....But you'll have to demolish and remove the whole dwelling too.
me: Ok then, and how much could it possibly cost to demolish and remove the dwelling?  $10k, 20k?  At some point I am just going to laugh and walk away from the pile of rubble and leave it for someone else.  I'm not paying an absurd price that is more than the value of the property and a new house costs just to remove garbage from the lot.  It doesn't even make sense.


I never did get a straight answer out of them (this has happened with every insurance quote I get - it's like they are all brainwashed to take the actual value of the house and triple it for replacement costs).  I was able to get them to reduce to a much more reasonable level though.