I can’t believe it. I’ve been a good client of (company name withheld) for at least 10 years. In that time, I’ve always paid my premiums on time and I’ve never given my insurer any cause for concern. In fact, I must have made my insurance agent very happy – I kept increasing my coverage, as my family got bigger and the cost of the “toys” got bigger too.

 

I live in a fairly quiet neighbourhood. So, it was a HUGE surprise when I came home one night to discover that my home had been broken into. They’d come in through a window at the back. I told myself it was time to get a home security system, and was thankful that I had good insurance coverage. Nothing more was lost than some stereo equipment and a big screen TV – but nothing that couldn’t be replaced.

 

The next day, I called my agent. He’s a great guy – he also tells it like it is.

 

Well, he said he’d be happy to take down my claim information but that I might like to think twice about it, because I could lose my house. Lose my house? He went on to explain that the company he worked for was trying to reduce its risk. The best way to reduce its risk is to get rid of people who make claims. Once I made a claim, I became a liability – regardless of the fact that I’d been paying for insurance for all this time! So, they would pay my claim, and then they would refuse to renew my insurance when my policy came due.

 

I still didn’t understand how this could result in my losing my house.

My agent went on to tell me that once one insurer decides you are “high risk”, other insurers will also treat you as high risk. In fact, I’d probably be unable to get insurance from anyone, once I’d been deemed uninsurable by one.

 

As soon as that happened, my mortgage would become a problem. After all, if the asset that is mortgaged is not insured, the bank no longer has its “security” against my loan! So, they’d be requesting that I pay off the mortgage immediately – which, of course, I wouldn’t be able to do.

 

They’d foreclose and I’d lose my house.

 

I couldn’t believe it! It was like something out of a bad soap opera. How can you be a good client and end up losing your home for your trouble? I paid for my own new stereo and big screen TV and I switched to another insurer. I’m just keeping my fingers crossed that I don’t end up with the same problem if I ever have to make a claim again.

I am unsure if you will even get my reply BUT I experienced a similar situation in that I needed to submit a claim to my insurance company of long term relationship. 

My dog bit a mailman that was filling in for the day.  My normal maillady was off that day but she always pulls into my driveway and honks as she knows of my dog.  (My dog (mutt collie) of 11 years has never went outside of our fenced-in yard (approx .25 of an acre) in her whole life so we do not close our gate at the end of the driveway and have not done so in many years.)  He pulled into my driveway behind my car, got out of his truck and headed to my door with a box that was too large to put in my mailbox.  She is an old dog and her hearing is not so good anymore so she didn't hear him pull in, get out of his truck but did see him when he was about 15 foot away.  My mailbox is actually outside of my fenced-in yard across the street from my house.  I live in an older neighborhood which at one time was considered rural but with the growth of my city is now city limits with rural atmosphere.  I have lived in my house 11 years. 

It was not a bad bite, in fact they treated it on the scene with neosporin and a bandaid but being a mail carrier he was required to report it or he would lose his job.  I had no problem with him reporting it and was actually shocked that my mutt collie actually bit him since she had never bit anyone her whole life.

Well, long story short, my insurance company cancelled me yet told me in their letter that I was not 'uninsurable' but to keep their standards up they had to let me go.  After many years at this company (car, life, and two homes later over 20 years) they cancelled me.  I looked for other insurance and it was outrageous  because of it being a dog bite (so many bad dogs in this world I know) and it didn't matter that she had NEVER bit anyone and was an inside dog except when she needed out to potty.  I could not find insurance that I could afford in the time frame required so my mortgage company actually insured my house cheaper than I was being quoted.  Yes, it is still high and my payment went up due to this fact but end results..... they did not foreclose on me.

I doubt your mortgage company would have foreclosed on you either but your agent is right in that now days no matter what type of insurance we are talking about, it doesn't matter how long you are with a company, even a very small claim will result in cancellation and trying to get new insurance is very difficult.

I just wanted to share this in case something in the future happens to you and you must submit a claim.  Something needs to be done with the insurance companies but with so much insurance fraud, it would be hard to keep them from cancelling us even if we are a long-term good customer.

 

It's hard to believe but this is really how insurance companies operate these days. There is no relationship-building nor the recognition of a good customer. It's all about risk and there are no second chances.

I suspect this has a lot to do with the fact that many insurers are "going public". This means that they become all about profit, and responsibility to the shareholder. There's no responsibility to the customer.

My goodness! Thank you so much, Monique, for sharing this story! It is important to know the worst-case scenario. It helps us to be more careful and more humble! As a woman professional, I have always been insulted that they ask my marital status. I wondered if they would ask Margaret Thatcher if she is married to determine how to underwrite her risk. It just should not matter. I am a self-made woman. Even worse, 30 years ago, when I divorced my alcoholic husband, they INCREASED my premiums. Clearly such a careful, straight-A, responsible and sober person as I, was a lesser risk to them than I had been married to an alcoholic. The agent tried to explain by saying that I would be more distracted driving because I would be worrying about things like finances more. Well I left THAT insurance company then and never went back.

Truly, however, they all operate like that. They estimate risk based on statistics. Medicine is increasingly going in that direction as well. Evidence-based medicine is a whole movement and docs are actually put-down in great medical schools when they do not follow it (in the way other docs may think they should). The truth is that clinical trials (the source of evidence-based medicine) are important both to guide bench-based traditional lab science as well as to help guide medical care in areas of uncertainty (i.e. evidence-based medicine). No statistic, however, can ever give a reliable prediction of the outcome for any individual. Statistics, by definition, are based on groups of individuals. Thank goodness that I do not automatically prescribe a drug for you because you are married or not married and therefore may have more statistical probability of being emotionally less stable or I do not prescribe some chemo drug because you have fair skin and therfore may have more chance of skin cancer or I do not prescribe high blood pressure medicine based on your race rather than on your blood pressure!!!!!!!!! At least in medicine, we still differentiate between risk factors, which may be completely mitigated in any individual's case, and actual disease.

I couldn't agree more, specdoc... Being treated like a statistic is not going to get customers over the long term for any insurance company. It brings home the point (which I didn't know in the days when this story took place) that you need to really research the number of complaints about an insurer before you sign up with them. It's not the lowest premium that should "win", but the best customer service. After all, the last thing you want (when you actually need to submit is a claim) is to find out that your insurer makes money for shareholders by automatically refusing a claim the first time. Nor do you want to discover that the company you bought a service from has become your adversary. One other comment that your posting has prompted: I am amazed by the amount of sexism and bias that is allowed to operate in this industry under the guise of "statistics".