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

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

In my experience I haven't had any bank that I have sent declarations of insurance to requiring the homeowner to have any specific deductibles but there are some type of modified loans that may put stipulations on the deductible and sometimes the underwrites can put stipulations on loans before they approve them. Kind of like when you lease a car they require your BI and PD limits to be at least 100/300 and usually require you to carry a maximum deductible of $500.

Originally posted by dominicus
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

OK.. so when you have your land and your cob houses and someone wanders onto your land and injures themselves or someone you invite over gets injured in your home and sues you for $100000 in liability are fine with paying for your lawyer, and paying that money out of pocket? I bet you would have wished you had insurance then. If insurance companies weren't defrauded to the tune of billions every year then everyone would have better rates.

Originally posted by BadNinja68

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.

It's true that insurance companies use the law of "large numbers" to determine their rates and it is by far the most fair method of determining a base rate or premium. It's the actuaries that determine the rates based on past loss history and speculate on future trends, however the insurance commission does regulate the rates in each state for every insurer doing business in that state and have to approve rate changes even if it is a decrease in rating due to favorable loss ratio. The state has every clue and control over the cost of insurance by declining rate increases if they are not based on actual data provided to them by the insurance companies actuaries. The insurance companies have to provide the base rates of their products and then justify the surcharges they impose to the commission before they can be approved to make changes or even do business in a state. It's basic info that anyone who has had to pass a test for an insurance producers license should know.

reply to post by kdyam

A $400+ increase on a difference of $500 worth of deductible is a little crazy in my experience.

I agree. I'm assuming the insurance company based that increase on the fact that the OP has had $40,000 in claims over the years.

Originally posted by TheRedneck
Right now I'm very glad I do not have State Farm.

I had them on a car years ago (when I was still living with my parents), and got a letter from them that they were cancelling my insurance, because my father, who was not on my policy, and had had his own insurance through Geico for probably longer than I had been alive, had an accident the year before. Since he lived in the same household, he was considered a risk for another accident, so my insurance got cancelled.

I had to have flood insurance and it cost $500 a year but has never been used. The bank said they were going to handle my insurance then it went to $2400 a year I refused to pay they forclosed we went to court and they got nothing

Originally posted by Zaphod58

Originally posted by TheRedneck
Right now I'm very glad I do not have State Farm.

I had them on a car years ago (when I was still living with my parents), and got a letter from them that they were cancelling my insurance, because my father, who was not on my policy, and had had his own insurance through Geico for probably longer than I had been alive, had an accident the year before. Since he lived in the same household, he was considered a risk for another accident, so my insurance got cancelled.

I'm guessing it had more to do with your father's name being on the title of the car and not just because he lived in the same household?

reply to post by mikell


What exactly was the situation with your mortgage that the bank insisted on handling your insurance for you?

reply to post by Deetermined


According to the letter from the company, and the agent I spoke to, it was because he lived in the household with me. They never said anything about his name being on a title, or anything but "because he lives in the same household with you".

reply to post by Zaphod58


In the meanwhile, what do you know about the title of the car? Is it in his name or yours?

reply to post by Deetermined


I don't remember if his name was on that one or not. I know it had been on the earlier ones I had, because I needed a base sticker, but I didn't need one at that point, so I don't remember if it was in mine or his.

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

That part is completely true. Car loans and home loans where I live require certain guidelines be met. Some of these guidelines are the deductable.

My Mortgage states the property has to be insured. I suppose the mortgage companies could get pissed if a bunch of thousand dollar unfixed problems severely lower the property values. I presently keep a 250 deductible, I wouldn't want it much higher than that. I suppose if I had to raise the deductible, I would put a grand into the banks escrow to have my own deductible reserve. With the present stupid law of the government limiting escrow accumulations, it would be a little difficult, but not impossible. It would be like a deductible savings account for emergencies. I am sure the law could be "loopholed" using rational thinking. You don't get much money in interest nowadays anyway, if it saves insurance money, than that would be rational, if nothing happens, you lose nothing.

reply to post by ShadellacZumbrum


I'm wondering if your deductable / rates are changing because of your location? Such as, you're in a historical flood / natural disaster area.

I have see insurance companies change rates and deductables based on historical location data that is new to them. Example, there was a flood that killed x amount of people 200 years ago and this information was recently discovered by the insurance company.

It's a real crappy way of doing business, but insurance companies spend so much money on claims they look for every way possible to make it back 100 fold.

Do a little research to see if there is any historical data on natural disaters in your area.

reply to post by Zaphod58

I actually had AIG on my car when they got bailed out, and quickly put out a call for rates. I wound up switching, but I also learned that the only way to get a good rate is to compare. Now I pay $85 every six months for the state-required liability. I had some companies price it as much as $400 for the exact same insurance; I laughed in their face.

Insurance is a gamble. I might need it or I might not. I haven't had a auto insurance claim in 30 years and racked up 1,000,000 miles preventable-free and ticket-free when I was driving a truck. It's a pretty safe bet I won't ever need an insurance company, but the state requires it. So I get the minimum required by law, and I absolutely, unconditionally refuse under any circumstances to pay for "uninsured motorist"... the way I look at it, the politicians have declared that all motorists are insured, so buying that is simply giving money away for nothing.

TheRedneck

Insurance costs so much because of relentless advertising, imho.

Thanks for the heads-up OP.

reply to post by Deetermined


After 10 years they decided everything needed escrowed. Payment went up over $300 a month so instead of paying everything in the spring with tax and bonus it was every month and a lot more than paying it every year

My home owners on my current place have paid out over $20k in the last 3 years because of a lightning strike and a storage unit fire started by someone else. I expect to be cancelled soon so were looking to switch

reply to post by TheRedneck


It's interesting that you say this about Geiko, I may have to change my insurance. I would be curious who you are going through that provides the same insurance at half of what they charge? (Pm me perhaps? *nudge*)

As for the OP thanks for bringing this up. I don't have a mortgage, but I do have an auto loan with a $500 deductible requirement. As far as I have ever known, this is the standard requirement. I've never had a car loan that didn't have this requirement. To anyone trying to call the OP out on this, and you have an auto loan, I would suggest you check your loan paperwork because chances are it's in there.

Again, thanks for the heads up, OP.

I greatly appreciate Everyone that has Chimed in with information that supports what I am saying.

I was really starting to fell like I was a Damn Liar.

In any event, I called my insurance company again today and found out some interesting information.

To start off with they are COMPLETELY Eliminating the $500 deductible. I will be a thing of the past forever and ever. It will Not be offered to Anyone on any future policies. Now the minimum deductible they offer is $1000.

They were being kind enough to "GrandFather" mine in for a price. So I can keep the deductible, But because they are trying to discourage maintaining it they are raising the premium if I choose to keep it.

I did ask them to explain the "Natural Disaster" issues that has caused this to happen.

She said that over the last 5 years claims have drastically increased on Wind (to include Tornado), Hail, Flood, and Lightning Strike. Their payouts on claims have gone into the Billions. She also reiterated that this is Industry wide and Not just them.

After that call, I called 3 other insurance companies to get quotes on Identical coverage with $1000 deductible. I gave all of the exact information that my current policy has so they could quote Identical coverage.

Here is what I was quoted.

All State came in at $1182.68/year
Liberty Mutual came in at $1138.46/year
Nationwide came in at $1267.22/Year

My current premium with State Farm is $831.00/year With $1000 deductible.

Now, if I were shopping insurance I would call that a "No Brainer".

State Farm has treated me well over the last decade and a half. I will more than likely keep them as my insurance provider.

I hope this information has something to offer those who stumble across this thread.