American Family Insurance Complaints

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PostPosted: Thu Jan 19, 2012 3:01 pm   Post subject:   

Report every incident of delays in Handling claims and all other malpractices to the state insurance department. They take such matters very very very seriously.

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PostPosted: Fri Mar 16, 2012 7:37 am   Post subject: american nightmare  

American Family Insurance is not the "American Dream" as its' theme indicates, but the "American Nightmare". Was with american family ins . Crying or Very sad A terrible insurance company......bad customer service........they take care of no one but american family.


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PostPosted: Mon Jul 09, 2012 2:40 pm   Post subject: Am Fam is the worst co.  

I fell in a puddle of oil while walking through a McDonald's parking lot. McDonald's has a rule that the parking lots are supposed to be cleaned DAILY. Down I went, injuring my knees terribly as it was on concrete. Now because the McDonald's ins. company is Am Fam, even my lawyer said we would have a hard time winning against them! I've had surgery, have photos, have a witness (plus the two employees that stood inside laughing at me) and now my doctor said my injury is permanent. They have offered a very low amount to settle, but its not enough to even pay my doctor bills. Great. My lawyer does not want to fight them, as do most of the lawyers in my county for some reason. This accident happened in 2009 and its been drug out this long for me to get hardly anything, if anything at all?! What the hell is up with this company?


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PostPosted: Mon Jul 09, 2012 8:15 pm   Post subject:   

Your issue is with your attorney. Take up the matter with him. If a civil suit has not been filed, you are in danger of violating the statute of limitations and completely losing your right to sue for damages.



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PostPosted: Thu Aug 02, 2012 7:43 pm   Post subject: American Family likes to take your money and run!  

May 2012 we had a big rainstorm and a pipe to our sump pump broke, so we ended up with 6 inches of water in our theater room and exercise room. Expensive equipment in both rooms. We called American Family and filed a claim. We had an adjuster from a different state that didn’t know all of MN laws, but said he couldn’t see why it wouldn’t be covered. Our restoration company was 100% sure; it would be covered too. We got the shocking phone call saying they wouldn’t cover it. We have been with A.M. for 30 years and never had a house claim. We have a small business and have about 15 different policies with them, until today. Our agent we started with was great and we were sad to hear when he passed away. We ended up with B.P. from St. Louis Park, MN that has done nothing for us ever. We did talk to a friend that is an attorney and she looked over our policy and couldn’t understand how they could say it’s not covered. We could have tried for going to court, but not really having the money to go that route we ended up finding a different company after I spent MANY hours on the phone with higher up A.M. personnel. It always sound like we were going to get somewhere with them and they would come back with a copy of something that was never in our policy. They would always say they would call me back, but they always went the chicken way out though the mail. I hope people rethink going with American Family. They do not stand up to their word!


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PostPosted: Fri Aug 03, 2012 12:17 am   Post subject:   

You don't mention why it was denied (they would have sent a letter explaining this) but I read through the first few sentences and can guess... your policy does not cover flood. A restoration company is not that people you want to tell you what is covered or not and any attorney who reads the policy and does not see/understand the flood exclusion should go back to school.



I understand you don't like that it's not covered but truth is, all home owners policies (including the one you have now) don't cover flood. So going with another company does not change anything. Also, its not like AM changed anything on you. The policy clearly states that it does not cover flood water and it further explains what this is.



Again, an insurance company is required to send out a denial in writing and I'm betting that they have done this.



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PostPosted: Wed Aug 22, 2012 8:59 pm   Post subject: American family insurance fraudulent charges  

I am so sick of this company! When I first got a quote from this company, they told me a low rate. I was convinced and went to set up an account. When I got there, everything was completely different. I had points on my license that were not really there (only through insurance companies) and my quote went up another $100. I decided they were too expensive and switched companies. I have been with this other company for 3, going on 4 months now and AFI is trying to charge me for months I was not with them! In my experience, American Family Insurance is a scam! WORST INSURANCE COMPANY EVER! I have contacted my insurance company and they sent my report to this loser that he said will resolve the issue. We'll see. You have been Warned!!!!!! Evil or Very MadEvil or Very MadEvil or Very Mad


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PostPosted: Tue Mar 05, 2013 11:09 pm   Post subject:   

So you had 3 claims in how many months? I think the average homeowner has 1 claim every 7 years-



You had no roof in minus 15* weather? Did the repairman do anything to try to keep the heat in? Looks like a few unanswered issues here-



Long and short of it is if I said I will give $100 every week and then you give me $200 every week how long would you do that.


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PostPosted: Thu Apr 18, 2013 5:29 am   Post subject:   

I agree with mynoncrazy, any company out there would non-renew an insured wifh 3 home claims in less than a year. Especially if you went the winter without a roof, an insured has a responsibility to protect their home from further damage after a loss. Not having a roof in summer is enough to cancel the policy, any insurance company who would accept that much risk would go out of business in a week! Its going to be impossible to get a standard policy for at least 3 years, possibly 5.



This is one of the biggest misconceptions for insureds and frustrations for agents - homeowners insurance is NOT intended for small, routine repairs. It is meant to protect against a catostrophic loss: $100,000 losses, not $1,000. This causes so many problems between an agent and their clients, who call up extremely angry that their premium doubled after they filed two small claims within a year. In the end, you're better off in the longrun paying for small claims out of pocket if possible because it'll be less than the higher premiums for a year or two. I obviously don't know the full story nor mean to imply that you suffered small losses, I'm only speaking in general about an issue we all face with homeowners insurance.



My advice, always call & ask your agent whether you'd be better off paying out of pocket for any small claims. I've heard people say always ask or pay yourself if its under $2,500, less than double your deductible, or my favorite, if its small enough that you have the ability to pay out of pocket without it hurting your financial stability, within reason like under $3,000-$4,000. Assumimg a $1,000 deductible and that a claim could raise your premium up to $1,000 for 3-5 years,after 3 years you‘d pay $4,000 ($1k ded + $1k/yr premium hike x3 yrs = $4k) youd be in the same financial position as if you didn't file a claim. Plus you dont have to deal with the claims process, having the claim on your record for 5 yrs, and be better able to handle a rate hike should you have to file a serious, large claim within 3-5 yrs.



I've seen it time & time again where an insured files several $1,500 or $1,000 claims within a year or two, causing their premium to go from $600-$750/yr to $2,000-$2,500, then a tree falls through their roof during a storm or they have a fire and have to file a $50,000 or $75,000 claim and at renewal the company cancels their policy. When they shop around they find that most standard companies refuse to insure their house, and those that will cost $3,500+ per year amd/or will only insure it for Actual Cash Value, leaving them with sub-standard at ACV as the only other affordable option. They end up paying thousands more in premium than the cost of repairing the small claims themselves, while also being left underinsured. Its a horrible situation, but one that is fortunately entirely avoidable.



That being said, I am certainly NOT advising or suggesting that an insured should not repair any damage to avoid filing a claim. If you cannot afford to pay for repairs out of pocket then you absolutely nneed to file a claim. If an insured home is damaged, particularly from a covered loss, and the insured knowingly fails to make repairs or file the claim, and then that damage later on causes further, costlier damage the insurance company can deny the claim because of negligence & failure to perform proper maintenance of the home. Plus, if you ever switch carriers or buy a new policy and the damage is found during the inspection, the carrier can refuse to insure the home or raise your rate considerably. You do not waant to be stuck without insurance or have to pay more to repair the original plus additional damage that could have been aavoided, so always make repairs or file a claim if necessary as soon as possible.



We agents need to do a better job of educating our clients about homeowners claims to avoid issues like this for our clients so they can get the most out of their insurance while minimizing their costs, maximizimg coverage & ensuring the best possible experience. Of course some won't listen and insist on filing claims for any amount no matter how small if they can avoid paying anything above thetheir deductable, but I explain to every client what their options are, what homeowners insurance is meant for, and what may happen if they file too many or small claims, that they can call me anytime to evaluate their options, that it is ultimately their decision to make and that I'll respect that decision & be there to help them through the claims process, no matter how large or small it is. Most understand and are thankful ffor taking the time to educate them & potentially save them from paying thousands more in premium and having their policy cancel. At the end of the day, they're better off and the agent avoids future angry phone calls, cancelled policies, and high loss ratios.

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PostPosted: Mon Jan 13, 2014 11:41 am   Post subject: Cancelled insurance after 20yrs since we made claims  

My family has been with the American Family Insurance for many years now. In the past 5 years, we made several homeowner’s claims in a row, because we had to suffer a heavy flood and so, a major pipe backup was done to recover from the damage. On top of that, we had to make 4 natural calamities and 1 flood claims, for events that were beyond anyone’s control.



Sadly enough, we’ve been now notified by the American Family Insurance that they'll cancel our insurance and that they’d no longer cover us because of the claims we were forced to make.



My question is: Aren’t these insurance policies meant to cover people during such perils? Is that only people who don’t make any claim will be accepted by the insurance providers? We were told that the only reason for our insurance coverage getting dropped is because of our consecutive claims. I had my family insured by the American Family Insurance for the past 20 years, and just because of our claims they’ve dropped us.



This is totally unfair and certainly not an acceptable business practice. The purpose of the whole insurance thing gets defeated as a result of it.


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PostPosted: Mon Jan 13, 2014 1:07 pm   Post subject:   

Quote:
This is totally unfair and certainly not an acceptable business practice.


Do the math... has AmFam paid out more then they collected from you over 20 years?



To an extend, a company has a choice to do business as they see fit. If a company makes a widget for $5 and ends up only being able to sell them for $4 do you think they should be required to sell them? Certainly insurance is different and it's regulated. But the situation is the same. They can't be forced to insure every risk.


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PostPosted: Tue Jan 21, 2014 4:27 pm   Post subject:   

Quote:
Aren’t these insurance policies meant to cover people during such perils?
Yes, they are, and you were.

Quote:
Is that only people who don’t make any claim will be accepted by the insurance providers?
No, that's not true.
Quote:
We were told that the only reason for our insurance coverage getting dropped is because of our consecutive claims.
That is a perfectly good reason to do so.



Just like McDonald's, insurance companies are in business to make money. McDonald's makes money by selling fried dead cow parts to people. Insurance companies make money by selling protection against certain losses.



In the late-1950s and early-1960s, I can remember that a McDonald's hamburger cost 10 cents, and a cheeseburger was 12 cents. Do they sell the same 1.6 ounce hamburger for 10 cents today? Of course not, their costs have increased and so has the price of the burger. If people think the cost is too high, they look for cheaper burgers somewhere else.



If an insurance company pays a claim for a covered loss, they absorb that on the basis that not everyone they insure suffers a similar loss on the same day. If they pay two or three similar losses for the same insured, they may be able to absorb those losses in the same manner. But what makes you think the insurance company has to continue covering a person who causes them to lose far more money than they have or will collect in premiums, past, present, or future?



Quote:
we had to make 4 natural calamities and 1 flood claims, for events that were beyond anyone’s control.
That may very well be true, and people all across the US have suffered cancellations/non-renewals for the same reason.



The law does not force any insurance company to take all risks, and they cannot discriminate against a person on the basis of race or religion or where they were born (among other things), but they can certainly reject any unacceptable risk.



In those cases, there is the FAIR Plan that apportions certain "uninsurable" or high risks among all the insurance companies doing business in the state.



If you work with a local agent/broker, you will find new coverage. You can also move to some other area where you are not subject to the same kinds of "natural calamities and floods"


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PostPosted: Tue Jan 21, 2014 4:53 pm   Post subject:   

Quote:
Tell me how can you say it's not counted against you in one sentence and then recant it in the next?


They never said it would not count aganist you... only that they would not increase the rates (if indeed it's as you mentioned).

Quote:
We pay for a service, but as soon as you use that service they drop you for using it! Tell me how this falls under that Duty of Good Faith and Fair Dealing Act?


First, I hear you and it sucks. No doubt about that. But also look at this from the insurance companies point of view... if a person starts having loss after loss should the insurance company be obligated to simply continue to take on the risk or should they be able to say, we no longer want to sell this policy? Even in Vegas the [betting locations] can ask you to leave if you start winning big. The other part of the issue is that state tells AmFam what they can charge. Since AmFam would normally need to increase your premium and they cannot... they need to non-renew the policy. Again, it would be better if this did not need to happen.



An example would be if it cost a company $5 to make a widget and they were only allowed to sell them for $3. If you owned that business what would you do?



But again, it s_does_ suck!

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PostPosted: Tue Oct 07, 2014 5:47 pm   Post subject:   

412i,419, lawsuits, IRS audits

________________________________________

April 24, 2012 By Lance Wallach, CLU, CHFC

________________________________________



419, 412i, plans are being audited by the IRS. Lawsuits are the result.

Dolan Media Newswires 01/22/

Small Business Retirement Plans Fuel Litigation

Small businesses facing audits and potentially huge tax penalties over certain types of retirement plans are filing lawsuits against those who marketed, designed and sold the plans. The 412(i) and 419(e) plans were marketed in the past several years as a way for small business owners to set up retirement or welfare benefits plans while leveraging huge tax savings, but the IRS put them on a list of abusive tax shelters and has more recently focused audits on them.

The penalties for such transactions are extremely high and can pile up quickly - $100,000 per individual and $200,000 per entity per tax year for each failure to disclose the transaction - often exceeding the disallowed taxes.

There are business owners who owe $6,000 in taxes but have been assessed $1.2 million in penalties. The existing cases involve many types of businesses, including doctors' offices, dental practices, grocery store owners, mortgage companies and restaurant owners. Some are trying to negotiate with the IRS. Others are not waiting. A class action has been filed and cases in several states are ongoing. The business owners claim that they were targeted by insurance companies; and their agents to purchase the plans without any disclosure that the IRS viewed the plans as abusive tax shelters. Other defendants include financial advisors who recommended the plans, accountants who failed to fill out required tax forms and law firms that drafted opinion letters legitimizing the plans, which were used as marketing tools.

A 412(i) plan is a form of defined benefit pension plan. A 419(e) plan is a similar type of health and benefits plan. Typically, these were sold to small, privately held businesses with fewer than 20 employees and several million dollars in gross revenues. What distinguished a legitimate plan from the plans at issue were the life insurance policies used to fund them. The employer would make large cash contributions in the form of insurance premiums, deducting the entire amounts. The insurance policy was designed to have a "springing cash value," meaning that for the first 5-7 years it would have a near-zero cash value, and then spring up in value.

Just before it sprung, the owner would purchase the policy from the trust at the low cash value, thus making a tax-free transaction. After the cash value shot up, the owner could take tax-free loans against it. Meanwhile, the insurance agents collected exorbitant commissions on the premiums - 80 to 110 percent of the first year's premium, which could exceed $1 million.

Technically, the IRS's problems with the plans were that the "springing cash" structure disqualified them from being 412(i) plans and that the premiums, which dwarfed any payout to a beneficiary, violated incidental death benefit rules.

Under §6707A of the Internal Revenue Code, once the IRS flags something as an abusive tax shelter, or "listed transaction," penalties are imposed per year for each failure to disclose it. Another allegation is that businesses weren't told that they had to file Form 8886, which discloses a listed transaction.

According to Lance Wallach of Plainview, N.Y. (516-938-5007), who testifies as an expert in cases involving the plans, the vast majority of accountants either did not file the forms for their clients or did not fill them out correctly.

Because the IRS did not begin to focus audits on these types of plans until some years after they became listed transactions, the penalties have already stacked up by the time of the audits.

Another reason plaintiffs are going to court is that there are few alternatives - the penalties are not appealable and must be paid before filing an administrative claim for a refund.



The suits allege misrepresentation, fraud and other consumer claims. "In street language, they lied," said Peter Losavio, a plaintiffs' attorney in Baton Rouge, La., who is investigating several cases. So far they have had mixed results. Losavio said that the strength of an individual case would depend on the disclosures made and what the sellers knew or should have known about the risks.

In 2004, the IRS issued notices and revenue rulings indicating that the plans were listed transactions. But plaintiffs' lawyers allege that there were earlier signs that the plans ran afoul of the tax laws, evidenced by the fact that the IRS is auditing plans that existed before 2004.

"Insurance companies were aware this was dancing a tightrope," said William Noll, a tax attorney in Malvern, Pa. "These plans were being scrutinized by the IRS at the same time they were being promoted, but there wasn't any disclosure of the scrutiny to unwitting customers."

A defense attorney, who represents benefits professionals in pending lawsuits, said the main defense is that the plans complied with the regulations at the time and that "nobody can predict the future."

An employee benefits attorney who has settled several cases against insurance companies, said that although the lost tax benefit is not recoverable, other damages include the hefty commissions - which in one of his cases amounted to $860,000 the first year - as well as the costs of handling the audit and filing amended tax returns.

Defying the individualized approach an attorney filed a class action in federal court against four insurance companies claiming that they were aware that since the 1980s the IRS had been calling the policies potentially abusive and that in 2002 the IRS gave lectures calling the plans not just abusive but "criminal." A judge dismissed the case against one of the insurers that sold 412(i) plans.

The court said that the plaintiffs failed to show the statements made by the insurance companies were fraudulent at the time they were made, because IRS statements prior to the revenue rulings indicated that the agency may or may not take the position that the plans were abusive. The attorney, whose suit also names law firm for its opinion letters approving the plans, will appeal the dismissal to the 5th Circuit.

In a case that survived a similar motion to dismiss, a small business owner is suing Hartford Insurance to recover a "seven-figure" sum in penalties and fees paid to the IRS. A trial is expected in August.

Last July, in response to a letter from members of Congress, the IRS put a moratorium on collection of §6707A penalties, but only in cases where the tax benefits were less than $100,000 per year for individuals and $200,000 for entities. That moratorium was recently extended until March 1, 2010.



But tax experts say the audits and penalties continue. "There's a bit of a disconnect between what members of Congress thought they meant by suspending collection and what is happening in practice. Clients are still getting bills and threats of liens," Wallach said.



"Thousands of business owners are being hit with million-dollar-plus fines. ... The audits are continuing and escalating. I just got four calls today," he said. A bill has been introduced in Congress to make the penalties less draconian, but nobody is expecting a magic bullet.



"From what we know, Congress is looking to make the penalties more proportionate to the tax benefit received instead of a fixed amount."





Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR and captive insurance plans. He speaks at more than ten conventions annually, writes for more than 50 publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Public Radio’s “All Things Considered” and others. Lance has written numerous books including “Protecting Clients from Fraud, Incompetence and Scams,” published by John Wiley and Sons, Bisk Education’s “CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation,” as well as the AICPA best-selling books, including “Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.” He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, or visit .taxadvisorexpert.com.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.


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PostPosted: Thu Oct 09, 2014 8:41 pm   Post subject: Settlement  

How long does it take for American Family to settle an auto clam. It has been over 30 days?


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