Homeowner Insurance Recommendations?
 

Hey all,

My current policy is not going to be renewed due to excess claims (3 claims within the past 4 years). The claims were not bogus. One was due to burglary. The other was due to fall injury. Another was due to windstorm damage (but no claim was actually submitted). The burglary claim they only paid me 3k for property damage. I didn't even get reimbursed for stolen items since I didn't have coverage for it. The falls injury led to a payout of 60k that was settled before going to trial. The last one I didn't even get paid for the damage from the windstorm.

Anyway, I'm looking for new coverage. Tonight, I went online to get a few quotes. I won't have any actual numbers yet since they are suppose to call me back soon. Any advice in the meantime would be greatly appreciated!

Really disappointed with my current company since I didn't even claim much money from them. Can I file a complaint against them? Or are they reasonable with dropping me at the end of my policy?

Please advise!

Thanks!

Homeowner's insurance is known in the industry as "use it and lose it insurance" behind your back. With that said, you want to treat it as a catastrophic policy and avoid making small or even medium size claims. As you've experienced, this will get you a non-renewal notification.

Your primary focus when shopping for homeowner's insurance should not be price. Your primary focus when shopping for homeowner's insurance should be customer service. When shopping for homeowner's insurance, you want to look for the companies who are rated highest in customer service. You want to make sure that your insurance company will be there for you when you need them. Too many of them get very difficult to deal with once you actually need them. A policy is useless and a waste of money, no matter how cheap it is, if the insurer isn't there for you when you need them. You can avoid this by sticking with the highest rated insurers.

Year after year after year, according to Consumer Reports and J.D. Powers and Associates, two companies come out on top as the best insurers in the country: Amica Mutual [amica.com] and USAA [usaa.com]. Keep in mind that Amica is a mutual insurance company which means one you're a policy holder, you also become one of the owners. So, as a homeowner's insurance policyholder, Amica will send you a dividend check each year based on the amount of spread between how much they allotted to pay in claims the previous year and how much they actually paid. Also, keep in mind that to be able to join USAA you'll need to be either current or retired military or have a parent or spouse who was.

Raise your deductible as high as you can. Here's why: filing small claims will get you a non-renewal. So, since you won't be filing small claims, and to help deter you from filing small claims, raise your deductible to $1,000, $2,500, or $5,000 - you'll save plenty of money doing so. Consumer Reports did a study on this and found that, in the end, you'll save plenty of money going the high deductible route - even if you have to make a claim soon after the policy began.

Make sure you get a quote for insurance that would pay to replace your belongings, rather than just pay you based on their depreciated value.

Make sure you're not underinsured. Many Americans are way underinsured on their homes. They look at their property values then look at their insurance coverage and see that their coverage exceeds their home's value and they try to get their coverage reduced. The truth is, they're probably underinsured. It costs much more to rebuild a home than it does to buy an existing, equivalent home. So, make sure your coverage amount will cover the cost of rebuilding your home from sticks up and revisit this coverage issue every five years to make sure you're always adequately insured.

Once the policy is in place, video all of your belongings in your house. Do a walk-and-talk where you walk around your entire house and narrate the video by explaining what everything is and how much you paid for it. Store a copy at a friend or family member's house (in the case your house is destroyed by a fire or some other catastrophe). Make a new video each year in January. The reason January is a good time to do it is most of us get a bunch of new things for Christmas and this documents all those new things soon after they've come into the house.

great insights.

I will personally vouch for the higher deductibles - as Brian said, homeowner's insurance isn't something you file small claims for, since your premium increase will likely outpace whatever you get out of a claim - so why pay for a low deductible when you're never going to use it?

As much as I agree with the video idea, I personally haven't done it.

With regards to cost, be sure to shop around. I always used to bundle home and auto (due to bundling discounts) but this year (I re-evaluate yearly with auto) I wound up being better off by disconnecting auto (Safeco) and home (Travelers, who I had been bundling with for a few years).

Why did you file for such low amounts (minus the fall)? Insurance is "use only with massive damage".

Face it, you are an insurance company's nightmare. If you get coverage I'm guessing it will be cost a crap ton. You are a high risk and business-wise they are smart to dump you. Personally it sucks but insurance drops people all the time.

Go to an independent broker and have them shop it around. Check your loan documents to see what is the max deductible you can have (yes, they can stop you from getting a large deductable). See if you get a discount for putting in alarm system or moving vehicles to policy.

I'd be curious what coverage ends up costing you.

You are now labeled as a high risk to insurers. You are in the CLUE database (google it) for 5 or 7 years, I forget. Find a broker who represents several insurance companies and they will help you out, and it will be expensive. Try not to make claims. It was the fall claim that did it. Being sued for something like that looks pretty bad for you.

Care to tell us the story on the fall claim?

I really appreciate the insights!

The fall claim was brought on by someone who was walking outside my house who tripped. He claimed that it was slippery after snowing. But the debate ensued about whether or not I created the hazard versus his negligence. Long story short, case settled before trial. He got some money for his claims.

But yeah, I really appreciate the great feedback I got here. Thanks everybody!

What state are you in?

Apart from customer service, you may also want to pay attention to financial ratings, especially in Florida. It is incredibly hard to find a policy rated highly by AM Best in Florida because the entire state insurance system is insolvent. AFAIK State Farm isn't writing new policies, and Allstate agents are writing policies on Castle Key Indemnity Corporation paper, which is NOT backed by Allstate.

Your homeowner's insurance policy is probably the most complicated product you will buy in your lifetime. Make sure that your agent/sales rep/issuing company's website is not the only person you get information about your policy from. ;)

As others have stated, you pretty much shot yourself in the foot. All the insurance companies that have good rates will not touch you with a 100 ft. pole. Your insurance agent should have explained that to you.

It's ugly. You'll need to find a broker who deals with high risk clients. If you go through a broker, look out for their BROKER FEE. I don't know which state you are in but in CA, a broker may charge fees on top of your insurance cost. If memories serves me right, those fees can be as high as $300. I'm not sure if regulations have since change but I remember brokers can charge a pretty hefty fees.

Avoid the smaller claims, the increase in your insurance premiums for years to come, you might have been better off taking it out of your own pocket in the first place.