Monday, August 16, 2004

Homeowner's Insurance Silliness

About 4 years ago, I made the mistake of following the advice of relatives to file a claim on minor water damage in the front of our home so that we could get some money for new carpet. Farmer's subsequently doubled our yearly rate making our yearly rate higher than what they paid out once in the 6 years we've been in our house As it's renewal time, I decided to check into some alternatives to reduce our monthly payments to a reasonable level.

At American Express, I found good prices and a very odd pricing practice. They would quote and even sell you at your home's existing insured value with whatever company you currently use. Oddly enough, though, they wouldn't pay out more than the appraised value minus the value of the land. Given that there's almost a $75,000 disparity between Farmer's insured value and the appraised value of home minus property, it would seem that American Express would be collecting a lot of monthly premiums that they shouldn't collect.

Aside from the odd pricing practice, Amex would have to send our policy through underwriting because we own a Chow-mix dog. It wasn't an outright rejection, but a rejection was possible.

At Amica, I was outright rejected...not for the Chow...but for my German Shepherd. Given that I have had good experiences with Amica and already have my auto insurance with them, I offered to waive liability coverage for the dogs. No dice...they still rejected our policy.

What's humorous is that one company is scared of Chow's and the other German Shepherd's. Has any of them ever been around some of the different breeds? I doubt it because if they had, they would understand that the inherent risk is really with the owners, not the breeds. Any dog can be raised to be aggressive and dangerous just like any dog can be raised to be mild mannered and submissive.

Amica passed on a profitable customer and may have lost my auto-policy (no claims for the life of the policy). I hope they're happy.



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