home owner insurance cancelled!!!

Well I had two incident in six years. One of them was hurricane Irene related, they HOI paid some $, and most damages were paid by windstorm, and the other incident related to a pipe leak. now they refused to renew me. So if I need to find another carrier I will be paying very high premiums? This really sucks. I remember a friend of mine at the office, he was 56 at the time, and had State Farm car insurance for TWENTY FIVE years, and one day he told me he had an accident, and it was the second time in 25 years, State Farm dropped him after 25 years!

MC

Reply to
miamicuse
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Ah, but here's the rub. Very often the homeowner is NOT free to move to another insurance company. With the advent of the CLUE database (Comprehensive Loss Underwriting Exchange, the hapless homeowner is unlikely to get insurance at another company, or at the least, at much higher premiums.

After reading many of the horror stories about people getting their insurance cancelled after making claims, I've done what has already been suggested here and that is to raise my deductable as high as I can stand and consider my policy to be catastrophic loss protection.

BTW you can order a copy of your CLUE report and see what it says about your claims history.

Here's a link explaining how.

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dickm

Reply to
dicko

Edwin Pawlowski wrote: ....

That's no different than any other business...they just use a different formula.

I don't find that part devious at all (being an engineer who dealt w/ probabilistic tools extensively, I suppose aids in that I understand their actuarial computations very well)...

That I expect as well...

they are cold, calculating, financial organizations determined

The last I don't have a direct problem with either. I do find their manner of trying to ensure it as being a problem in some instances. Primarily the ex post facto cancellation of policies that may not actually have really been all that unprofitable if analyzed individually. For example, the example given here was for dimes relatively in claims for what had to have been pretty high-premium coverage.

It was interesting to see the fella' who was an agent in Slidell or may Mobile, I don't recall who had just lost his entire household. He noted to the interviewer that his viewpoint on the treatment of his clients by both him and the company he represented had changed markedly.

Reply to
Duane Bozarth

I would and do. Sometimes we have customers that just aren't profitable for us to service and so we have to stop servicing them.

At the end of your insurance year you are free to move to another insurance company if you so choose. They should also be free to not renew your insurance if they so choose.

Steve B.

Reply to
Steve B.

Sure, why not? If the customer is not going to be profitable, it is time to move on. Sometimes the customer want services that we are not equipped to provide or do not want to make the investment in equipment to provide them. You don't bail out mid-purchase order but you do give notice that you no longer want to do business. Sometimes they come back and are willing to pay more, other times they find another supplier.

They advertise that you will be in good hands withthem, but in reality, they are a business and us mathematical formula to calculate how much profit you will give them. I guess that is a bit devious, but in spite of warm and fuzzy TV ads, they are cold, calculating, financial organizations determined to make a profit.

Reply to
Edwin Pawlowski

In acutality, for the type of claim which was under discussion, that would undoubtedly work well...

Reply to
Duane Bozarth

Well, the person in question can always form a mutual-benefit society with similarly afflicted people, and insure each other... see how they like it from the other side of the equation.

Reply to
Goedjn

Many insurance companies simply don't have rate structures for high- risk customers, so they don't have the option of renewing the policy at a ridiculous premium, they can either renew it at a rate they expect to be unprofitable, or they can decline to renew the policy. So they non-renew the policy, knowing most people will be able to find insurance with a high-risk company at a premium that reflects their loss history.

Now, it may seem outrageous to drop the policy over paying out $4200 in the last six years, but statistically, people who have losses that frequently often continue to have losses that frequently, so the company should expect to continue paying out $700/year to the customer, plus whatever it costs each time to investigate, process, and settle the loss.

Personally, it sounds to me like the original poster's insurance agent should have provided a bit more education, or else there never would have been a claim filed over only $1200. Carry the highest deductible you can afford, homeowner's insurance isn't an HMO for your house, it's for catastrophic losses you really can't afford yourself.

Reply to
Joshua Putnam

Indeed, that's one good reason homeowners policies are generally annual policies, and auto policies are often only six months -- the company can meet all its obligations under the contract and then decline to enter into a new contract covering those risks for another policy term. The company has done everything it promised to, and provided every service the customer paid for. They just don't want to sell those services again when, statistically, the customer has become a higher-risk gamble.

It's nothing personal against the one customer, it's exceedingly impersonal actuarial statistics. As a class, people who have filed one claim in the past three years are more likely to file a claim next year than people who have not filed any claims in the last three years. People who have filed two claims are much more likely to file a new claim than people who have filed only one claim. If a company has a loss surcharge in place that's steep enough to cover this increased risk, then they have no need to drop the higher-risk customers.

If they don't have a large enough loss surcharge to cover the added risk, then either they drop the higher-risk customers, or they sell their services below cost and make it up with higher premiums for lower-risk customers.

Reply to
Joshua Putnam

The situation varies from state to state, but insurance companies generally aren't free to just impose a higher rate.

Rates have to be reviewed and/or approved by the state, often requiring voluminous statistical documentation, hundreds of hours of staff time, lobbying, etc. In a business as marginally profitable as homeowners insurance, it may not make any economic sense for a company to spend hundreds of thousands of dollars for the right to continue servicing a fairly small number of customers, especially when there are high-risk insurance companies who specialize in serving this market.

Another thing the high-risk companies have going for them is more restrictive policies. Getting dropped because you filed too many theft claims? No problem, we'll give you a policy that doesn't cover theft. Too many storm claims? How about we exclude coverage for your roof? State Insurance Commissioner doesn't like policies that are so restrictive? OK, we'll operate somewhere else and you can buy our policies from a surplus-lines brokerage....

Reply to
Joshua Putnam

Just jumping in here with my 2 cents worth...

Once an insurace company starts selling you insurance I don't think that they should be allowed to simply cancel it at any time. When they agree to sell you insurance they should do a background check and determine the risk. If you ever have a claim they should then be able to decided at that time whether or not they wish to continue to provide coverage once the claim is settled.

Reply to
Noozer

Many insurance companies do not have very high deductible. I have AllState and the highest deductible they allow me to take is $2K. I wanted $25K deductible but they don't have this option. I just wonder why.

Reply to
Sasha

Joshua Putnam wrote: ....

Actually, I strongly suspect the reason is that the customer only chooses to pay six months' premium in order to

a) Hold on to the money for a while longer, b) Can't afford any longer term at the time, or c) Has to show proof of insurance to get registration and has every intention of dropping the policy.

Reply to
Duane Bozarth

I'm quite sure different companies have different policies (of doing business) as well as coverage...the one I use gives all of the above as choices at differing total cost...

Reply to
Duane Bozarth

My car insurance - GMAC - issues 12 month policies.

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Reply to
David Starr

Not for long. They are starting to quote new policy holders with 6 month premiums and will eventually convert the old policy holders. AIG just finished doing that. (I just received a quote from GMAC for a 6 month policy and they were high, very high)

Reply to
JerryL

Just renewed - goes into effect 9-18, for 12 months.

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Reply to
David Starr

I have not checked in a while but years ago I wanted to pay for a year policy for the car and was told they only take 6 months maximum.

If you want to show proof of insurance then you can get it a month or 3 months at a time.

Reply to
Ralph Mowery

The insurance company can't "cancel at any time". They get one opportunity a year to cancel your insurance and this would be at policy renewal time. Steve B.

Reply to
Steve B.

Some auto insurance companies will not write a 12 month policy. It is not up to the buyer. You can make a down payment and get proof of insurance for the registration and let it drop in a month.

Reply to
Edwin Pawlowski

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