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....
firstname.lastname@example.org is Joshua Putnam
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
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.
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.
That's no different than any other business...they just use a different
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
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.
Contact the office of your state insurance commissioner and check out
your venues of recourse. Some states have guidelines relative to the
operations on those ins co's in your state and 'codes' for conduct.
give'em a call..
Unless you're one who just loves the sense of false security received
from having that local good guy agent/buddy/pal/guy you started with,
etc, I find it worthwhile to shop for both home & auto insurance every
couple of years because they continually raise their rates onced you're
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