Homeowners insurance. I called around and got a favorable quote from a couple of different companies. The difference was a couple hundred dollars, so I went with the one with the lowest quote, and paid for coverage effective for a year.
This was in June.
In July, I got a bill for $190, for a coverage “adjustment.”
I called, someone said she would check it out and get back to me within 24 hours, and she never got back.
So I got another bill. Due Jan. 30, which is fast approaching.
Now, I think this is completely outrageous. I agreed to pay one sum for insurance coverage for 12 months, and I paid that sum, in full.
(I should also add that in 30+ years of homeownership I have made ONE claim, in 1990, when hail broke out all my upstairs windows and rain blew in. So really I am a pretty good risk.)
Insurance in the USA is regulated by state. Assuming you’re a USAian, without knowing which state you’re in there’s no way for any of us to to know whether it’s legal.
The contract you signed when you got the insurance would be the controlling document. Readingthat mightgive you a better answer than asking us.
I don’t have an insurance contract, I have a policy. It has the original price on it, and then lists all the things that are covered, and the conditions under which they are covered.
Which I don’t care about. If my mortgage co. didn’t demand that I buy homeowners ins. I wouldn’t. I only buy insurance when I have to, as it’s basically just throwing money away. I would like to throw away as little as possible.
The reason for this, supposedly, is that the agent who sold it cut the price on policies in order to get more business, and falsified things, for instance, like the kind of roof I have. Oddly, the people who inspected did not notice this until after I’d paid.
Yeah, I think I will try to track down the appropriate person at the state AG’s office. I used to know somebody on the Colo. insurance commission–maybe she’s still there. (The ex-wife of a former coworker, so it’s kind of a stretch that she’d remember me, but she’s a political type, and they tend to have pretty good memories.)
Wow. I don’t have much to say on your OP other than I agree completely with you that it’s outrageous. But you really wouldn’t insure the one possession that, to a lot of people, is the one largest purchase of your life?
I’ve paid somewhere around $1K/year for homeowner’s insurance as long as I’ve owned a home, a little over 15 years now. So let’s say $15K, give or take.
We had a hail storm 2 years ago that did $30K in damage in 10 minutes. New roof, new siding, various other little things all needed replacement.
Insurance paid 100% of everything, minus a $500 deductible.
Well I am not much of a gambler. After all these years I’ve probably paid $30K to insurance over the years, and I got back a quick $2400 after the hailstorm (and my $1000 deductible). Not a great return, for me. Very good for the insurance co.
First, the odds of losing the house in a fire are very small.
But the land by itself is worth more than I owe on the house. And I could sell it. So I wouldn’t be losing 100% of the value of the house.
The things I don’t want to lose are not things with a replacement value; they are irreplaceable.
If I actually GOT something for the insurance it would be different. But the whole insurance model counts on most people not needing to make claims, or making only small ones. And that’s me–no claims at all for 29 of 30 years, and one relatively small one.
I’m reading it as the insurance agent who lied, putting in correct info into their computer to get a lower quote.
If that’s the case, I’m thinking best case scenario is that they’ll waive the $190, but they won’t renew the policy at that rate, you’ll have to pay the correct rate next year. It’s not your fault THEIR employee screwed up, they should collect the money from him. If it was the realty agent that lied, then I think your SOL.
I think, right now, your best bet is to go insurance shopping again, take the best quote and ask your current company to match it, if they don’t that switch companies.
For what it’s worth, I’ve had this happen any number of times with car insurance when I was younger. When you’re 19 or 20 and living in a city, car insurance isn’t cheap, so I’d call around and get quotes. Inevitably I’d get one or two really low quotes. After I went with a low quote once, I realized that the agents were lying to me - I’d get the quote, pay for the insurance, then a month later get a notice that my insurance was being raised because I was not 29, as the agent wrote on the quote, but actually 19.
Thus began my lifelong hatred of insurance brokers.
I’d go with this. If it’s the insurance company’s agent that mistyped or lied, I’d push hard to have them waive the adder, all the while preparing to chance insurance companies when it comes time to renew, and your rates go up.
As for having insurance at all? A house fire wiped out my parents this summer. The closest thing to salvagable was some dried pasta that seemed to have darkened a bit, but was still intact. Everything else was reduced to a 12" deep bed of ashes and stray metal bits. The close to $250k that they will be getting from the insurance company way more then covers what they ever have or ever will pay in premiums. Sure, not everyone will have a fire. But the thought of having a fire, and no insurance to replace house and possessions, is downright terrifying.
The question is - if you don’t insure, what did you do with the money?
Just because you get back more than you owe does not mean you come out ahead. You lose everything and have a few thousand in pocket - hmmm… The land value must also include “subtract the cost of clean-up”. Worse yet, what if it’s a partial disaster? The kitchen is gone, the house is condemned as unlivable, but it will cost tens of thousands to restore the building? (I don’t know, what does a mostly intact building cost to demolish and haul away nowadays? How many months will the municipality give you to correct the problem?)
If you lived life to the fuller (?) with the extra $1000/year, great. If you saved it, and now have a form of self-insurance in the pile of nest eggs in your investment acccount, better. If you simply lived the life you always would, but without a recourse if some bozo torches your house - not good.
In terms of insurance, it never occurred to me when I was younger that I drove across the USA, many times, on a motorcycle, without a bit of health insurance. When I passed a tire lying in the other side of the same lane on the New York State Thruway doing 90mph in the pitch darkness, I sure woke up in a hurry - but health insurance never occurred to me until years later…
I would argue that you are very much a gambler, and that purchasing insurance is the non-gambling mentality. That isn’t in itself a bad thing, and if you’ve analyzed the cost and risk and decided that you can afford it if your property is destroyed you may have made the right choice. You’re gambling that nothing bad will happen to your stuff.
But rational buyers of insurance aren’t gambling that they will get their money back, which is what your statement implies. Just because I have auto and health insurance doesn’t mean that I hope I get into a crash and break my legs so I can make a profit. Honestly, I hope I never get a cent back from my premiums. I only have insurance to prevent against catastrophic loss: I really don’t want to pay $50k out of my savings if I write off someone’s BMW, and I would be bankrupted if the condo that I own burned to the ground without insurance. But even with insurance, I don’t want these things to happen. I’m just protected if they do.
I’ve chosen your approach with smaller items, for example by never accepting the extended warranty. I am gambling that the lifetime total of my out of pocket repair bills will be smaller than the total cost of many extended warranties. Over a lifetime this is almost certainly going to be true. But one big medical emergency could ruin me, and merits insurance.
I was very happy to have homeowner’s insurance when a delivery driver (major parcel delivery service) “claimed” to have slipped and fell on an “unmarked” hazard in my yard.
After workers comp rejected the claim, as did the company investigators, they came after us in a civil suit. The insurance company represented our interest, and settled the case for $30K, which just covered his claimed medical expenses, and lawyer’s cut.
If we had to defend this ourselves, we would have been out at least our legal fees, and potentially a whole lot more if it had gone to trial. We didn’t have the money to settle the way the insurance company did, so it would have had to go to trial, and we probably would have had to sell our house to cover any judgement (if it went against us). At a minimum, we’d not have been able to afford the legal fees.