Just received a notice from my home owner insurance company that they are cancelling my policy! Last six years I made two claims, one they paid $3000 and one they paid $1200, and they deemed that "unacceptable according to their guidelines". Can they do that? Location is Florida and company is Florida Select Insurance. This is outrageous.
MC
The nerve of yuou to actually ask them to pay some money out They only like to collect.
On Wed, 31 Aug 2005 22:25:08 -0400, "miamicuse" wrote Re home owner insurance cancelled!!!:
Yes, it's a *very* common practice.
IMO states should pass laws against it, but they don't.
Can they do it? They did it.
I have heard of this a lot. Make a few small claims then you are cancelled.
So I look at home insurance to cover large big bucks losses only. I get the highest deductible possible. And then I would only make a claim if it was over $5,000.00.
I guess you could call this "self-insurance" up to $5,000, then insurance company for a major loss like whole house burns down or something.
Note that this "not making any claims" is all well and good... But then there is the case of my dad who was never in a car accident. So they raised his car insurance rates because he was *likely* to be in an accident because he had not been in one yet. You can't win for losing!
Filing a claim for something like $1200 is stupid, IMO.
Have they acually canceled the policy or sent a notice of such? If the policy is cancled then all of the other insurance companies will know. $$$$$$$$$$$$ Or it might be time to sell and move. That is another way to restart the insurance experence rating that I know of. When you sell a property now days there is a form to fill out of all the claims you made and who the insurance company was. Just another data base for the wall street guys to feed on.
If there is a notice of cancellation then get on the phone/internet TODAY and get new coverage to start a couple of days before the old policy lapses. Dollars are not all that important now. New coverage is. You can negociate the dollars later.
I had the same problem with an insurance company a long time ago. A good friend who was an agent for another company guided me through the process I took to get away from the old company. I mistakenly had the idea that the insurance company should pay for storm damage. They did and they canceled me. Now days I carry hefty deductibles. I keep my deductibles high enough that it makes economic sense to me.
Unfortunately, they can. Not knowing the circumstances of the claims, can't judge on them. The one thing you can try is to contact the State Insurance Commissioner or whatever the office is called in FL. Probably will not find a cause for direct redress but you can certainly inform them and they do keep statistics and monitor for abusive patterns. A copy of the letter to the company also have some effect, but it should be done on general principles anyway.
Unfortunately, in FL and the whole Gulf Coast just now things are tough for the insurance companies and they're looking for anyway possible to keep from going under. Insurance is going to be hard to get and very expensive there for a long time, I suspect.
Yes, they can. They paid your claim and fulfilled their legal obligation. Since you are not profitable, they made a business decision to drop you.
Outrageous is a matter of opinion. You think they are because they don't want you any more. They think you are because you made certain claims. I don't know if the decision is based on the dollar amount, frequency, or the type of claim you made.
They've decided that you're too high a risk and chosen not to keep you as a customer. Homeowner's insurance is for _major_ losses - why would you bother making a claim for $1200??? Even for $3000, I'm not sure I'd make a claim.
Making a single claim isn't likely to result in having your insurance cancelled. Making multiple claims in a relatively short period of time (two claims in six years, in the case of the OP), _is_ likely to result in a policy getting cancelled.
As others have said, insurance is for major losses, not minor ones.
While I don't disagree that it is almost certainly more cost-effective in the long run to use the higher deductible to lower annual premiums, the assertion that filing a claim against a policy at a coverage level the company has set premiums for and which are paid is somehow a justification for the company to then cancel is simply excusing a shoddy business practice. Not that some don't do such things, but it shoddy practice.
Insurance companies are leaving FL in droves and everybody knows this. Even the ones that are staying are being very careful about issuing policies. I think I would have been reluctant to make a claim at all. If you can get coverage through another company I would suggest getting the highest deductible possible and try not to need to make a claim for a very long time.
Gideon wrote: ....
What statement is that?
That what I said. If you paid premiums at a given coverage/deductible level, then it is the insurance company who set the rates and coverages. Making a non-fraudulent claim against that policy is no justification to cancel the coverage as it doesn't change the actuarial risk of that of coverage on iota.
If there is a issue, that's a different matter altogether.
And where did I make any such claim that such legislation be enacted?
I made an assertion only that the underwriter set the premiums, limits and deductibles and did so on an average actuarial basis on an individual detailed analysis of that household. A claim on that policy does not change that average acutarial basis in and of itself. OTOH, a pattern of claims could be grounds for either a change in the basis used or even cancellation.
The problem is that companies tend to underwrite on a competitive basis and then "cherrypick" after the fact to try to raise the odds in their favor.
Good policing by Insurance Commissions could go a long ways to minimizing abuses although most if not all are woefully understaffed, underfunded and dominated by the industries which they regulate.
However, states should
cancelled. Making
in the case of
That, as I noted in the reply to Andy is true for many companies, but depending on the circumstances, two claims in six years may (but most likely is not) a "pattern". In a vast majority of cases it is simply random chance and the insurance company lost and is trying to make up for that ex post facto. That is where I have a problem w/ the policy.
If, OTOH, there was fraud or other evidence of misuse of the policy or specific reason for changing actuarial odds for the particular residence, that's something else again totally. The fact is, however, the coverage was underwritten w/ average actuarial odds for a general class of structure/property in an area for a coverage and deductibles at a premium set by the underwriter. If their odds are wrong, they should adjust them, but to do that by selective punitive cancellation is, imo, not the proper manner in which to do so.
I said I agreed that was the most cost-effective strategy for most folks.
They've taken a beating there over the last couple of years, undoubtedly. A period of relatively low hurricane activity led to underwriting at rates not sustainable in at least the current short term after a compensating period of higher activity. Of course, the fact that folks continue to build (and they continued to underwrite) in the face of the inevitable contributes heavily as well....I think it highly likely they weren't really considering the combined effects of the type of damage to be incurred in the event of a large hurricane but continued to write multiple policies on essentially the actuarial assumption of independent loss rather than correlated losses.
That is, the probablility of loss was fixed for each individual policy but the fact that there would be massive simultaneous claims in the event of a hurricane wasn't accounted for actuarily. I may be wrong, but I'm thinking that's a factor.
Bill wrote
Note that this "not making any claims" is all well and good... But then there is the case of my dad who was never in a car accident. So they raised his car insurance rates because he was *likely* to be in an accident because he had not been in one yet.
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I guarantee that what your father told you is BS. An insurance company with actuaries dumb enough to set such a policy would be out of business very quickly. Insurance companies want people who won't have accidents in the future, and one of the best indicators for future safe drivers is an accident-free safe past history of driving. Gamblers in Vegas are superstitious; insurance actuaries aren't.
Your father may have misunderstood what he was told; he may have talked with somebody who was poorly informed; or he may be fibbing because he doesn't want to admit to other reasons (poor credit rating, a claim he hasn't admitted to you, a big rate increase due to his age, being dropped as part of a group, etc.)
The thread is less confusing if you learn to reply to the correct message.
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scott21230 wrote: Filing a claim for something like $1200 is stupid, IMO.
Bill wrote
I have heard of this a lot. Make a few small claims then you are cancelled.
So I look at home insurance to cover large big bucks losses only. I get the highest deductible possible. And then I would only make a claim if it was over $5,000.00.
I guess you could call this "self-insurance" up to $5,000, then insurance company for a major loss like whole house burns down or something.
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Bill,
Your offered outstanding advice which most folks either don't understand or fail to accept. How often do we hear of this sort of situation: Somebody has $1000 deductible and a $1600 accident. He decides that he can't afford to file the claim for a net return of $600 for fear of being cancelled or having his rates increased. Or somebody has $500 deductible plus several past claims and now he has a $2,500 claim which he is afraid to file.
Most folks are somewhat afraid to carry large deductibles because "they can't afford" the risk associated, yet when they behave like the person in my example above they are often taking that risk anyway. And taking that risk without enjoying the benefits of lower rates via higher deductibles.
Insurance should be used to protect against the huge losses. A family should switch to very large deductibles on home insurance, large deductibles on car insurance and no collision insurance on older vehicles. The saving in premiums will, on average, greatly offset the expected losses on future claims and reduce the probability of being cancelled.
Consider a family with insurance on their home plus several vehicles. Their saving in premiums over a decade will easily offset the possible loss if a claim occurs.
Gideon
SQLit wrote
I mistakenly had the idea that the insurance company should pay for storm damage. They did and they canceled me. Now days I carry hefty deductibles. I keep my deductibles high enough that it makes economic sense to me.
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You learned the same hard way that I did. One big hail storm damaged 3 of our vehicles plus our roof and siding. All damage occurred in the same 10 minute window of time from the same storm. All damage was covered by the same insurance company.
But I discovered the hard way that we had to file 4 claims - one for each vehicle plus one for the home. Our auto insurance went up 40% on all vehicles, including the 4th vehicle which had no claim. Homeowners insurance went up about 25%.
My insurance agent was rather blunt and honest. I pointed out that all of the claims were from one so-called "act of God", and that I shouldn't be punished for filing such claims. He pointed out that insurance companies prefer people who don't cause accidents AND they also prefer people who don't file claims from "acts of God." It was obvious that he wasn't taking sides, just pointing out the reality of the situation.
Of course, it should be mentioned that many of the insurance companies covering our area jacked up rates across the board for all homeowners, even those who didn't file any claims. We are now a "higher risk" area. Everybody got zapped, but those who filed claims got hit the most in rate increases.
We switched companies, increased deductibles, and dropped collision insurance on older vehicles. I figure that the premium savings over the next decade will, with very high probability, offset the risk associated with our self-insurance on smaller claims.
Gideon
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