Insurance Companies Are Getting Ready To Cause Home Owners Breach Of Contract On Their Mortgages

• Insurance is by contract itself. Unless you are in arrears (as in don't pay), the insurance company is bound by their own contract which cannot be changed during the contract term without the consent of both parties. It can be changed at time of renewal by the insurance company without your consent (except that you consent by purchasing the policy).
  
  
• No insurance company is going to say that only they are doing it... in reality, they are probably just trying to raise the rates with bullied consent. Another poster suggested you call around for better rates, and I agree. Rates vary wildly between companies anyway. For instance, a lot of people have told me they get better rates with Geico... Geico wants over twice what I pay now for car insurance. Heck, my own company tries to raise my rates with a load of BS excuses every couple of years. I just go to my agent and ask what she's trying to pull and voila! the rates drop back down (and generally someone gets chewed out for making me come in).
  
  
• If you're still concerned call whoever regulates insurance in your state and explain that State Farm is attempting to violate their own contract by raising a deductible in the middle of a term. That's breach of contract. If necessary and you can afford it, talk to an attorney.

TheRedneck

reply to post by SwissMarked


Think what you may and generalize if you wish. But to believe some stranger without verifying only reiks of ignorance.

Try using ATS's tag line and quit practicing it.

When you purchase insurance, you enter a BINDING CONTRACT.

Customers cry foul as homeowner insurance costs jump, especially in hurricane areas

GULF SHORES, Ala. — When Stan Virden moved into his 2,400-square-foot house overlooking a rock-lined canal in 1996, he paid less than $1,000 a year for homeowners insurance.

Now, as he seeks to move to Atlanta to be near family, Virden says potential buyers for the house are being scared off by the annual premium, which has skyrocketed to $5,000.
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Source


State Farm charges far more than rivals to cover Dallas area homes

AUSTIN — State Farm Insurance is charging by far the highest premiums among the 32 insurance companies selling homeowners policies in the Dallas area, even as Texas’ largest property insurer continues to battle state allegations that its rates are excessive.

The prices are not even close. New rate figures submitted to the Texas Department of Insurance this summer show that State Farm’s premiums are well above average in most areas of North Texas. The company’s rates are up about 35 percent from one year ago.
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Source

And one more thing. Ive never heard of a bank demanding that insurance is purchased with a certain deductible. This whole thread is uninformed.

reply to post by Julie Washington


Some insurance companies are competitive, some are not.
interesting to read that State Farm is 35% higher for HO3 coverage though. HO insurance is exactly what their appetite calls for.

reply to post by DIDtm


I really hope that your deductible increases.

You had better check the language on your mortgage. The president at the bank I have said that most banks impose a minimum detuctible on mortgages and auto loans to protect their investments.

Better go check with your bank to make sure that you didn't sign something you didn't read.

You are the one that seems to be in danger of being ignorant.

reply to post by DIDtm


Pay attenttion to the articles that are being posted by Julie Washington. Maybe they will bring you up to speed.

Just so everyone knows.

I have had the same insurance company for 15 years. I have had $40,000 in claims and my rates have NEVER increased.

I have called to compare rates with other companies before and my current insurance company was Always the lowest.

Insurance companies suck!!! They are immoral, corrupt, money grabbing lobbyist groups, who made car insurance mandatory nation wide, put a symbolic gun to the prez's head to start obamacare which is mandatory health insurance, and you cannot get a mortgage unless you have x-amount of home insurance.

They rake in Billions by manipulating US law to work for them and against the small guy......

BEst thing to do. buy some acreage, build some small cob houses that you can maintain yourself, and a big middle finger to a mortgage and insurance co

reply to post by Julie Washington

Insurance rates are usually regulated by the Insurance Commission in your State.

This is not correct. Rates ae determined by proprietary(secret) algorithimsowned by insuranve companies. The state. Has no clue how they are determined and they have no control..over their cost.

Originally posted by ShadellacZumbrum
reply to post by DIDtm

 

Pay attenttion to the articles that are being posted by Julie Washington. Maybe they will bring you up to speed.

edit on 4-8-2013 by ShadellacZumbrum because: (no reason given)

That's funny.

There is nothing she posted that pertains to what you are stating.

1. An insurance policy is a binding contract. Nothing can be changed to it while it is in force. Unless agreed upon by both the insured and insurer.
Google....contract of adhesion. this will better help you understand how the courts favor insureds over insurers.

2. The difference in premium between a 500 and a 1000 dollar deductible is not anywhere near 432 (or whatever amount you stated. And if SF is doing that in your state, seek other quotes.


3. Show me one mortgage that specifically states that a homeowners insurance must have a 500$ deductible. You do realize that there are options (in a lot of cases) for a 250 or a 0 deductible. There are also higher deductibles, that are generally used for high dollar homes. Or for those of who may wish to self retain a large chunk.


we go through extensive training. And have to take continuing education. Although I don't everything, no one possibly could, what your stating would cost insurance companies way too much money to try to pull off.The insured would win every time incourt , fighting this.


I'm on a tablet or I would give you links to laws regarding this. and I will tomorrow when I'm front of a computer.

reply to post by DIDtm


I am very well aware of how contracts work. I just checked my policy and it renewed July 22.

I had just received the notice of their intent on Friday. In addtion the increase would be $436 to maintain the deductible.

I suggest you call your bank and ask them if they impossed that into your mortgage contract. Mine did.

reply to post by DIDtm


Here is an article that was published on July 29, 2013.

Ohio insurance companies adding wind and hail deductibles

It deos not specifically say "Natural Disaster", but it does say wind and hail which could be construed as the same.

reply to post by ShadellacZumbrum

If your policy was renewed as a $500 deductible July 22, then the insurer cannot change the deductible without your consent until that policy is up for renewal again. Their letter of intent is nothing more than a bluff and not worth the paper it is printed on... unless you allow it to happen. I would immediately send a copy of that letter to the state regulatory agency (along with a copy of your policy) and send State Farm back a letter stating that you do not agree to a change in deductible and will not accept a change to your policy while it is in effect.

If the policy has not yet been paid or officially renewed, then they do have the ability to raise the deductible. You might want to check the fine print for effective dates, but generally once payment is accepted the contract becomes binding.

Right now I'm very glad I do not have State Farm.

TheRedneck

After reading through 15 pages of fine print on my policy renewal, I found this ...

Your Policy Deductible has been changed to 1/2% ( $1000 Minimum ) of your coverage limit. Returning your deductible to $500 will increase your premium by $436.82 for a new premium of $1267.82. To make this change, return this notice and your SFPP account will be adjusted.

That fine print can't even be read without a magnifier.

So basically, they had changed it when the renewal was done. They never mentioned it until after I paid the premium and the letter was just to verify what they had already done.

That is honestly the first time I have read the policy. So what they have done is NOT illegal.

But, it is still causing issue with the bank because I had to have the language adjusted on the mortgage and auto loan contracts.

Which is really the point of this post.

It looks like people do not even have a clue that their mortgage contract requires them to maintain a minimum deductible on their insurance policies.

Either way, I hope that everyone will call their banks and check to see if any specific deductibles have been imposed.

Apparently according to the article I posted, ALL insurance companies in the state of Ohio are doing the same thing.


ETA:

Take it for whats its worth. I just thought I would be the nice guy and give a Warning before half the country went into breach of contract.

Basically Everything is Just as I said it was.

Originally posted by DIDtm
reply to post by SwissMarked

 

Think what you may and generalize if you wish. But to believe some stranger without verifying only reiks of ignorance.

Try using ATS's tag line and quit practicing it.

When you purchase insurance, you enter a BINDING CONTRACT.

They're stating that's what they were told... I'm stating I'd believe they were told that over anything any insurance agent ever tells me...

So far as "contracts" go... if this was still America I'd say sure they have relevance... but if you have the money for fancy lawyers contracts don't mean squat in this country... if you don't there's only one end of the stick you're going to be grabbing...

Originally posted by Julie Washington
What State do you live in and what is the name of the insurance company?

I've not received any notice from my insurance company.

Insurance rates are usually regulated by the Insurance Commission in your State.

I would contact the attorney general to find out if this is legit.

Also, call another competing insurance company and ask them to give you a quote, without disclosing what you have heard from your current carrier and see if the quote you a $500.00 deductible policy.

Something smells fishy here.

Hi Julie. I used to be an insurance agent for property&casualty (home&auto) insurance. This is pretty standard practice for insurance companies in an effort to recoup their losses on claims paid out. The company I worked for had to file a year ahead of time with the insurance commissioner in order to be able to change their minimum deductible raised to $1000, they have to make sure they do it by the books for they can get into big trouble with the insurance commissioner in their respective state and could possibly be fined or lose their appointments to write business in that state. It sucks when it happens but being on the other side from the business point of view I can understand why they do it. The loss ratios for most of the major mutual companies the last few years has been enormous, I worked in Oregon but looked at the loss ration for Colorado last year after the fires and they ended up paying out almost $1.75 for every $1 they took in on homeowners premiums. The insurance companies make most of their money off of life insurance policies these days and annuities (if they offer them). It's a rough business and insurance companies get a bad rap but they really are paying out on claims and helping people who have had losses from small to catastrophic get back on their feet.

reply to post by kdyam


Thanks for adding that info.

That is pretty much what my agent said.

Originally posted by DIDtm
reply to post by SwissMarked

 

Think what you may and generalize if you wish. But to believe some stranger without verifying only reiks of ignorance.

Try using ATS's tag line and quit practicing it.

When you purchase insurance, you enter a BINDING CONTRACT.

The contract is only binding on the side of the insurance company, insurance companies contracts are called unilateral contracts because the insured can cancel at any time for any reason and can make changes at any time during the term being insured for. The insurance company has to pay claims for the hazards specified in the policy as long as the premiums are being met and the insured has not misrepresented the information used during the rating and discovery period and the time the policy was signed and as long as they are not committing insurance fraud when filing a claim.
Insurance companies are so heavily regulated by the state insurance commissions that it is not even funny, any time they need to put in for a rate increase or policy declarations change they generally have to submit the information including the reason up to a year in advance to be able to get it approved.

reply to post by ShadellacZumbrum



Your agent should have done a comprehensive insurance review with you to see if you may be paying for things on your homeowners policy that you may not need. A $400+ increase on a difference of $500 worth of deductible is a little crazy in my experience. Depending on how long you have had your homeowners insurance you could ask your agent to do a new reconstruction cost estimate on the amount your home in insured for, almost every company has an endorsement on their policies that is an inflation guard and causes your amount insured for on your structure to increase annually by roughly %6 so if it has been a few years you are probably over insured. There are actually quite a few ways to see if you can save money but they all involve your agent, if your agent wont help then I would get rid of them and find someone else. There are still some companies out there who will give you a $500 deductible on homeowners, they are usually fairly conservative and to get the best rate you just need to have a good insurance credit score.