Property & Casualty Insurance/Non-renewal - American Family Homeowners Policy
Hi James - I just received what looks like a form letter with our names & address cut and pasted at the top from a district underwriter at American Family informing us that our homeowners policy will not be renewed effective our anniversary date in early August due to the following claims listed below:
3/5/2012 Freeze/Water $1,285
1/2/2012 Wind zero
8/8/2010 Wind $3,337
7/15/2009 Wind $21,844
1) The 2009 claim was not wind but hailstones (coding error?) that were the size of apples which damaged 16 sections of vinyl siding and ruined the roof as determined by Am Fam's appraiser. It was not classified as catastrophic because the damage was limited to my suburb. Everybody in my neighborhood received new siding and/or roofs.
2) The 2010 claim appears on my CLUE report as catastrophic, which it was, wind driven rain that got in through by bedroom window and ran down the wall into the two rooms below. Also wind-driven rain through a gable vent into window frame of bedroom below. Both window & gable were properly repaired to prevent this from ever happening again & insurance repaired the water damage.
3) The 1/2/12 was a non-event that I never should have called in. A section of my siding was laying in the yard after a winter blizzard. Turned out to be a leftover piece from original installation that was wedged up there somewhere and the high wind dislodged and blew down. Should never have called it in and no payment made.
4) The 3/5/12 claim is coded wrong. It was a garbage disposal back-up that went undetected and ruined a finished basement bathroom cabinet & laminate counter top. At the time, my mother and youngest son had been simultaneously been diagnosed with cancer; we were overwhelmed and called it in to AmFam without thinking.
James, I have a customer of AmFam's for over 24 years with a good claim record prior to above. The house has no mortgage, high FICO and insurance score, on-time payments & no risk or liability issues. Do I dispute with underwriter, my agent, or the state insurance commissioner and what about coding errors? If not, how do I seek another insurer without my premiums going up astronomically and my insurability taking a major hit? My naivete about homeowners showed in two of the above claims and in my way-too-low deductible of $250. Any and all advice would be greatly appreciated. Thanks!
Hi. Would prefer to address you by name, but I could not find it in the question.
So sorry to hear about the troubles with your homeowners policy. While it would be helpful to know where you live, I can tell you that along the eastern seaboard, insurance companies have become very intolerant of wind claims, and any property with proximity to the coast - that is how they measure exposure to hurricanes.
Even if you are not located in hurricane-prone areas, three claims in a five year period is above average. Remember, insurance companies are not public utilities, they are for-profit corporations. So keep that in the back of your mind, and here is how I would handle this.
But first, you should know that I am a big fan of using independent agents. If you are calling these directly into the company as claims, you have no professional, licensed, INDEPENDENT insurance agent advising you what your best course of action is. My advise is, for starters, never call in a claim until you know what your deductible is, and how big the claim looks to be.
Okay..first - Check to see what day the notice you received was mailed, and make sure it was done in accordance with the state law where you live governing non-renewal notices. For instance, in CT the Date of Mailing must be at least 60 days prior to the non-renewal date. You would be surprised at how many of these are done incorrectly and must be rescinded, resulting in the policy being renewed for another year.
Second - get the notice re-issued correctly, and cc your letter requesting correction to your State's Insurance Commissioner. When the new notice comes out (And hopefully it will), make sure this new notice is also in accordance with the appropriate law. Note: The 3/5/12 claim is probably coded correctly as a 'water damage' claim, but make the point it is incorrect in your letter anyway.
Third - If asked how many claims you have, your answer should be "I have had three paid claims. There was a fourth claim that was reported in error - there was no damage, and therefore the claim was withdrawn"
Fourth - the 'Catastrophic' claim refers to the event, not your specific claim. Because it was a 'Cat' claim, many insurers will not hold that against you.
Fifth - when applying for new insurance, tell the new insurer you are happy with a $5,000 deductible - that effectively eliminates the two smaller claims, and you get a pretty good credit for taking the higher deductible. You won't be putting in small claims anyway, so you might as well get a credit for the higher deductible.
I don't think you can simply argue this and win - hopefully the non-renewal notice you received did not comply with the law (or the new one won't, if they agree to re-issue a corrected one) or your new insurer will see the light and not kill you with a giant premium.
Let me know how things work out.