I am interested in advice about a current situation I am exp

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PostPosted: Tue Mar 22, 2011 3:23 pm   Post subject: I am interested in advice about a current situation I am exp  

I am interested in advice about a current situation I am experiencing with State Farm insurance. I have been a customer of SFI since 1988. I have had multiple homes since then, a few rental properties at times as well, all insured with SFI. My current home is in a good area, neither in a flood zone nor any other natural hazard location. I have made only a few claims through the years, most of those claims resulting in no more than a few thousand dollars in costs for the company.

I was just notified that SFI will not renew my policy once it elapses. Their reasoning was based on the last two of those claims came in within the past 5 years. The last claim was for $1300. I think it would be their responsibility to educate a consumer about the risks of being dropped for making two or more claims within a certain time frame. For a 23 year period, only a few claims were made. If I was told this may happen, giving me a chance to reconsider the small claim, I would have.

I am interested in advice about the realty or ability to sue State Farm for dropping my coverage; a situation that could have been avoided by direction from the company. Allstate will not cover us as well because of two claims within 5 years. Is this common knowledge for all consumers and I am naive?

gwatts
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PostPosted: Tue Mar 22, 2011 10:59 pm   Post subject:   

Although you have been insured with State Farm for a long time, insurance companies are concerned with only the most recent 5 years when looking at claims.



It is common for homeowners insurance to be non-renewed if there have been 2 claims in the last 5 years. You have no legal recourse unless State Farm is violating any rules or laws governing non-renewal. Many states have no regulations limiting non-renewal for claims.



A good agent would have advised you of the consequences of filing claims. However, many agents do not like to have this conversation because customers often get upset if they are advised not to file a claim.



I recommend contacting your agent and discussing the matter. Your agent can appeal the decision to non-renew your policy. You are a long term customer, and if you agree to a higher deductible, explain you now understand insurance is for large, catastrophic claims and not small ones, and say what you will do to prevent the type of claims you have had in the past -- e.g., get an alarm system if you have had a theft claim from your residence, State Farm may agree to keep the policy.



A lot of companies agree to keep policies they intended to non-renew. As long as State Farm changes its mind that you are not a greater risk for future claims, they will want to keep your business.



Worst case scenario: if State Farm sticks by the non-renewal, contact an independent agent for your best options. You will have a hard time getting home insurance until at least one of the claims is over 5 years, but an independent agent specializing in personal insurance should have the best options for you.



Good luck!



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Robert742
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PostPosted: Tue Mar 22, 2011 11:40 pm   Post subject:   

There is part of the catch... an insurance company can't tell someone making claims will result in a non-renewal of a policy. First, it's against state policies and also it's simply just not possible. An insurance is not allowed to "convince" someone not to file a claim because it may result in a non-renewal... this is against the Fair Claims Practice Act of any state. But on top of that... SF can't look 2,3,5, 10 years down the line and know what kind of claims an insured will have, the state of the economy, or what direction they will need to move in during those years. All of those things were considered when they choose not to renew your policy.



You can sue anyone you want... but you don't have a case against SF. They can choose not to accept a risk if they want. No one can force them to accept payment for their promise. You say they are "dropping" your coverage. This is actually incorrect. They are simply choosing not to issue the policy again. Your policy is for 12 months. There are no promises after that time frame.



I understand non-renewing a policy due to 2 claims is not a "nice" thing to do. But if those were two very minor claims I'm sure you'd be able to find coverage elsewhere.

tcope
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tcope
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PostPosted: Wed Mar 23, 2011 12:49 am   Post subject:   

Yeah, but it does give a policy holder a nice warm fuzzy good neighbor feeling doesn't it? It really speaks volumes when they spend buzillions to attract new customers instead of sticking with a known entity with a track record in longevity. It's all about what have you cost me lately!



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PostPosted: Wed Mar 23, 2011 2:03 am   Post subject:   

Quote:
It really speaks volumes when they spend buzillions to attract new customers instead of sticking with a known entity with a track record in longevity.
I suspect that this is not the whole story.
tcope
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