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Insurance company dropping customers

post #1 of 9
Thread Starter 
I'd like to hear some opinions on this please!

My neighbor's insurance company dropped them after they filed an insurance claim last year from tornado damage. The tornado (class 1) went directly over their house, lifted the roof and dropped it back on the house, took off their siding, and blew apart their barn. They had about a $50,000 claim. A few years back, we had a significant ice storm that damaged their house, but their claim was only about $1500 (their insurance wouldn't pay for tree removal). They also had a hail damage claim to their roof a few years previous for a couple thousand dollars.

We also have had 3 claims in the same period (tornado, hail and a fire) for about $20,000. Our company hasn't dropped us.

When they filed the report for tornado damage, their company argued every point and told them that insurance was not to replace the damage, but only cover what they couldn't afford out of their own pocket. Then they dropped them because of excessive claims. Because they were dropped, they have only been able to find one company to insure them at double their current rates. A few companies will insure them for about 10 times their current rate and others won't even take them.

I told them they should get their story in the media and protest this company. My neighbors don't want to do anything, but I am outraged by this company. What is insurance for but to pay for things like accidents and natural disasters? I haven't heard any other problems from people and a LOT of folks in Kansas City were devastated by the tornados here last spring.

What would you do in this circumstance?
post #2 of 9
Most insurance companies do not cover for what they call "Acts of God" I know when that 90' tree fell on our barn, we were out of luck to get anything out of it. It mashed our barn, our tractor, completely totaled our lawn trailer and was expensive to have someone come and cut it and haul it away.

I know of one company here in Oregon that I will not name, that has people up in arms, for they are now dropping any of their clients who have moss on the roof of their homes. Can you imagine? Not even giving these folks a chance to clean the moss off and do repairs, just sent out a form letter and wiped them off their policy!
post #3 of 9
JMO, but it seems like insurance companies seem to have lost perspective, and the original meaning of the term 'insure'. It no longer means insure - to guarantee against loss, but rather ensure - to ensure company profits keep rising by avoiding payouts, raising premiums, and cancelling any policies that are used.
post #4 of 9
Insurance companies - don't get me started! The new auto insurance company that Jake signed up for, dropped him because he is deaf. He has a clean driving record, the agent said so. So they said they would refund him. But they only paid back about 60% of it. I am still angry about it.
post #5 of 9
One big lesson I learned in dealing with insurance companies: IGNORE the sales talk and READ the fine print in the contract. Question everything and demand written answers from the company to these questions. I think if one does this before signing any papers, there'd be no problems.
post #6 of 9
Did your friends have an unusually inexpensive policy?? I agree with you: do any of your local tv shows have those consumer assistance features?

People think health insurance companies are a pain to deal with, and they can be, but compared to property & casualty companies, they are saints. After 9-11, we met with our property insurance representative & our insurance broker, about coverage for an ambulance that one of the towers had fallen on, a whopping $75,000. Plus, the EMT driving the ambulance who had just rushed into the building was killed.

The insurance guy just kept saying that 'acts of war & terrorists attacks' are not covered, and our broker was arguing against him.
They knew each other, and it seemed like this was the umpteenth time that they had gone thru this debate, & it was like robotic speech.
It was nauseating.

It probably didnt get much coverage outside of NY, but the companies that insured the WTC also tried that ploy initially, than after they finally agreed to cover the rebuilding, the insurance companies for the owner (NYS) and the ones for the guy who leased the buildings from NYS, started fighting over whose responsibility it was.

There is building down at ground zero, probably abt 40 stories high, that has sat there for 2 years covered with black mesh. It is unsafe for re-occupancy and has to be torn down. It is still standing there,
because each insurance company claims the other should pay to tear it downn, before even getting to who should pay to rebuild it. (I don't think, hopefully, that it is likely to collapse on its own.)
post #7 of 9
I'll never forget the night a 40 tonne lorry came into our lane without seeing that we were in it, clipped the back of the car causing it to spin full circle, then came at us head on, bouncing us onto the central reservation!. The police could'nt believe we walked away without a scratch, but the car was a write off.

We were the innocent party, but our insurance company only gave us half of what our car was worth?!

Their quick to take your money, but not as quick to pay it out!.

post #8 of 9
That sounds about par for the course. Flood damage used to be covered by our homeowner's insurance. Because there was extensive flooding in eastern Germany in August of 2002, virtually all the insurance companies in Germany got cold feet, terminated all their contracts, and then offered new contracts which didn't cover flood damage.
Another example: My brother-in-law used to have a dog that ran out in the street and caused a major accident, and one man was badly injured. The car insurance companies successfully sued my b-i-l because the dog wasn't on a leash, although there was no leash law in place at that time. Since then, we've always had pet owner's liability insurance. In 2000, JC slipped out of his harness and went tearing off. Our street was dug up at that time, and he went down into the hole, crawled into an open water pipe, and got stuck. We called the fire department, and when they couldn't get him out, the water company had to send people out to cut the pipe open. Our liability insurance paid the bill (about $2,000), but canceled our policy. When I tried to get a policy with another company, I couldn't. According to an acquaintance who is an insurance broker, we've been blacklisted, though officially there's no such thing.
post #9 of 9
Working in an insurance company, I can tell you a few things.

1) Every single claim you EVER make is kept in a central data base. Not specific to the company but specific to the United States. What companies do before they decide if they will insure you is go to this data base and look up all your records of insurance coverage. Every single claim you ever file in your entire life will be there. They will look at the claim history and if you have an extensive one they will 90% of the time deny coverage.

2) Read the fine print. It is solely up to the insurer's discretion. If they decide that you are too much of a risk to them they will drop you. If you make a lot of claim, they'll drop you. When you get dropped for excessive claims it goes to that Centrally Stored Database. It's kept on record, and any other company you try to go to will pull up that record and see that you've made a lot of claims, will claim you as a risk, and 90% of the time deny you.

3) Be very careful what you file a claim for. If it's something minor and you can afford to repair it yourself (even if you have to do the repair over time), I HIGHLY suggest you go that route rather than making a claim. You want to keep your claim record clear, and typically when you file a claim your insurance premium will go up as well. In the long run if the damage is only between $1000-3000 and you can afford to fix it or it can wait until you can afford to fix it... you will save money, and hassle.

It IS their job to insure you, but if they see you ask a risk they will drop you like a bad habit. Also, not all homeowner policies cover everything. Like most homeowners do NOT cover earthquake insurance and none cover flood (as far as I know). Also most - most homeowners don't cover fire either. It's actually the "home" you're insuring and not the possesions. At least with some companies. Degrees of coverage vary from company to company. Be sure to ask LOTS of questions, and write down the answers to keep on file.

As an employee in the insurance business, I *know* how much of a pain in the ass insurance companies can be. I have to work for them every day!
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