Renter's insurance question - 1 small claim & premium increase 3-fold

[michl43]

What is the name of your state?: California

My husband has bend paying renter's insurance for 15 years to a well known insurance company "F_ _ _ _ _'S. We rent an apartment. About 6 months ago his car was broken into and some personal items were stolen, which total about 400.00. My husband paid the 250. deductible and they only paid about 150.00 approximately. This is the only claim my husband ever made. Now they are raising the premium $10 a month for 3 years, which will more than triple the amount of the $150. (i think it was even less than that). Is that legal for them to do that? It does not seem ethical to me. My husband is thinking about reporting it to the natl. insurance department (or whatever it is called). He called the ins.co. to complain and the guy said he didn't know if he could change it, but would check into it. Any advice? Any recommendations for a better source to buy renter's insurance from? Thanks, Michelle

 

[claimlaw]

Respectfully:

Insurance should be used for catastrophic losses. Although catastrophic is a relative term I suppose, you should value your insurance "rating" as much as you do your credit rating.

If you had a $1000 deductible you wouldn't be in this mess. You also wouldn't have risked $400 worth of stuff left in the car.

An unsavory but inexpensive lesson.

Claimlaw

 

[michl43]

renter's insurance claim

So... 15 years of paying the premium, and one very small claim and they raise the premium for 3 years? Even with auto insurance, if you have no accidents in 10 years they "forgive" the first minor accident. And if another car caused an accident, I believe you are only liable for the deductible and your insurance premium doesn't go up. So, please explain why after all these years his car gets broken into and he makes a small "renter's insurance" claim, they can raise the premium? Is that standard policy? If so, would the insurance co. give us a copy I wonder?

 

[tammy8]

Most companies are now rating claims with a huge surcharge for your major claims---fire, THEFT and liablity. This is normal practice now to keep insurance rates as a whole down.

Also it is VERY unlikely that any other insurance company would touch you with a theft claim. You should have discussed this lose with your agent and if your agent was worth a grain of salt, he would have told you to eat this lose.

 

[claimlaw]

Technically speaking, what you describe is not proper. An insurer cannot raise a premium or cancel you with out a new risk realization/exposure.

However, the police shouldn't arrest you for farting in public but if you piss off a cop, you can be arrested for a good reason, a bad reason or no reason at all. Sure it may get dismissed, but at what expense to you?

You can fight the insurer but at what expense of time, money and effort?

BTW: A person that turns in a claim on a broken storm door is going to turn in a claim on everything. They don't deserve insurance.

Claimlaw

 

[michl43]

Thanks for your responses. When my husband's car was broken into and things stolen, he did a police report, and was upset, and called the insurance agent. This was his first claim, and first time being robbed. 20/20 he should have asked about premium going up, but obviously that did not come to mind.. After paying them 15 years or more you'd think their would have some loyalty, or a small amount of trust, to a good customer. It is not expensive sure, but it's also like he's being robbed twice, the second time is their increasing the premium. It doesn't seem ethical. Sure there are people out there that are frauds, but probably a small percentage. Sure we will probably stay with this ins. co, but now have to raise the ded. to 1K,to have previous premium. It is the principle of the thing.

 

[claimlaw]

I would raise the deductible. I would withdraw your claim and give the insurance company the money back. I would get a copy of your CLUE report from your agent and appeal any inaccurate information. I would shop for another insurer PRIOR to canceling your current policy.

I have a $10,000 deductible on my home. I carry only liability coverage on my vehicles over 5 years old or 100K miles. I pay a "ghost premium" into a savings account with my name on it. I am careful. I don't park next to cars with big doors or in crowded spots. I have a reporting alarm system and I keep[really] a 12 Ga. shotgun leaning behind my front door. It's not loaded[kids] but every person that visits my home will think twice about screwing with me, my family and my property. Not a stitch of trouble in 15 years. If I suffer a large loss such as house fire, I'm covered and have the skills to get my full moneys worth even after the deductible. My premium is $580+- year for HO on a $680k[Midwest] home.

Claimlaw

 

[newlywed03]

#1 - All insurance rates in California have increased. The claim may have nothing to do with the increase.
#2 - the insurance carrier can increase your rate at renewal. In CA, if the increase is 25% or more, they must notify you in writing at least 30 days in advance (may be more than 30 days, can't remember). So they are increasing the premium by another $120 a year? If he was only paying $150 a year originally, then they should have notified you. $270 a year sounds pretty reasonable for renters insurance. I'm in the Bay Area and was paying around that with a $250 ded. (please correct me if I'm misunderstanding the premiums).
#3 - $400 in loss, minus the $250 deductible, leaves $150 for them to pay. That's why Tammy 8 is right, a good agent probably would have suggested you not to report the loss. Be lucky you got that - most likely the policy uses an "actual cash value" valuation - that means the replacement cost of your item LESS depreciation.

Yes, there are other carriers. The claim might not help you, but it doesn't cost anything to call up another agent (your insurance carrier is their own agent and may not want to shop around for you) in your area to "market" your policy. Additionally, you can get a multi line discount if you place coverage for your autos and renters with the same carrier.