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Homeowner's insurance buying decision - price vs reputation
Old 05-06-2018, 10:18 AM   #1
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Homeowner's insurance buying decision - price vs reputation

I'm shopping around for a new HO insurance policy, since my current/previous company decided to switch to a different underwriter and my premium is going up by more than 60%.

I've gotten a variety of online quotes from various companies, and most of them are within about $100-200 of each other for the annual premium. But one is noticeably lower, much closer to what I've been paying for the past few years. However, I heard from someone in my neighborhood that this particular insurance company has a not-so-good reputation when it comes to paying out claims. The one claim I had a couple years ago (the only HO insurance claim I've ever made in nearly 20 years of being a homeowner) was paid pretty quickly with no issues.

So my question is, would you go with a company offering a substantially lower premium than the others, or would you prioritize the company's reputation for how quickly and smoothly they handle claims payments? I'm tempted to make the decision based mostly on price, since I only have anecdotal evidence of how customer-friendly these companies are when it comes to handling claims. FYI, the company I'm considering going with is Allstate.
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Old 05-06-2018, 10:23 AM   #2
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Does Allstate have a bad reputation for claims payment? I’ve had Allstate for many years. Never had a claim on homeowners policy but have on auto and claim was processed quickly with no issues.

Having said that, for me it would depend on the price difference. I wouldn’t change from a carrier I’ve had good experience with for a minor savings, but if the savings were meaningful enough to me, I’d probably switch, especially since homeowners claims are few and far between.
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Old 05-06-2018, 11:37 AM   #3
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I wouldn’t change from a carrier I’ve had good experience with for a minor savings, but if the savings were meaningful enough to me, I’d probably switch, especially since homeowners claims are few and far between.
This is basically how I'm looking at it, too. If the likelihood of filing a HO insurance claim in any given year is, say, 7%, and the likelihood of a particular insurance company having a very customer-unfriendly claims process is, say, 30%, then that's equivalent to a mere 2% chance I'd have to deal with such a thing over the next year. Seems worth the small risk to save several hundred dollars. But I'm still curious how others tend to view this when making a decision about insurance coverage.
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Old 05-06-2018, 12:02 PM   #4
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would you go with a company offering a substantially lower premium than the others
I would go with a lower premium, if I could convince myself that their customer satisfaction was decent enough for my needs. Cost is not always an indicator of quality.

This might help: 2017 U.S. Home Insurance Study - Homeowners Insurance: | J.D. Power

(My insurance company is rated "about average" in pretty much every category. The premiums have been reasonable, and I've never had a problem getting a claim approved.)
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Old 05-06-2018, 12:09 PM   #5
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This is basically how I'm looking at it, too. If the likelihood of filing a HO insurance claim in any given year is, say, 7%, and the likelihood of a particular insurance company having a very customer-unfriendly claims process is, say, 30%, then that's equivalent to a mere 2% chance I'd have to deal with such a thing over the next year. Seems worth the small risk to save several hundred dollars. But I'm still curious how others tend to view this when making a decision about insurance coverage.
That's a good analysis. For me, I don't mind paying a little more for coverage that is more than adequate and that has a reputation for handling claims in a most excellent manner. I am not trying to be blase about spending money willy nilly, but I would prefer to save money in other areas and spend more money for a product that would help mitigate extreme strife in the off chance that a disaster (quite literally) strikes.

Nonetheless, I appreciate the conundrum. I have been going back and forth on having full coverage on my car. I know I can afford the loss, but I can't help but think that Murphy's Law would kick me in the arse the day after I cancelled the full coverage.

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I would go with a lower premium, if I could convince myself that their customer satisfaction was decent enough for my needs. Cost is not always an indicator of quality.

This might help: 2017 U.S. Home Insurance Study - Homeowners Insurance: | J.D. Power

(My insurance company is rated "about average" in pretty much every category. The premiums have been reasonable, and I've never had a problem getting a claim approved.)
It doesn't surprise me that my insurer was the award recipient in your link. I haven't been super thrilled with the premiums, but the accolades come with the increased costs, and I am OK with that.
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Old 05-06-2018, 12:16 PM   #6
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I was with State Farm for 20 years. When we moved to NC, I ended up with an buffoon disguised as an agent as well as a new "chintzy" SF. I dropped them and went with USAA based on JD Power survey several years ago. It's all positive - wish I'd done it years earlier.
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Old 05-06-2018, 12:18 PM   #7
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I have used State Farm for 40 years. Never a problem with a claim. They were very rare and all except two were automobile. One was a roof claim for hail damage. I was pretty late to file as no one told me about the damage initially and the roof was older. In the end, the roof was replaced. One of my tenants hit the wall of the garage with his SUV in a rage. Totally his fault. That was repaired quickly and State Farm went after the tenant.

I value customer service when it comes to insurance. The agents grumble that State Farm is becoming more like Geico and the other low cost providers, but I haven't seen it yet. Maybe I will the next time I have to file a claim.
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Homeowner's insurance buying decision - price vs reputation
Old 05-06-2018, 12:53 PM   #8
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Homeowner's insurance buying decision - price vs reputation

First and foremost, look at the policy details and compare. What is the roof coverage? Some of this varies by state I would think.

Would you go with the company that offers the lowest premium? Yes, my rates jumped up two months ago. Maybe these rates are determined by state and zip code?

How do you factor in company reputation? Need to be careful taking the advice of neighbors and others. I would think JD Power and other ratings agency is a better way to gauge a companies service.

Consider bundling home, umbrella, auto, etc

Independent Agent? One that can recommend several insurance companies.

What is the companies online presence? The Liberty Mutual app allows me to make coverage changes like adding coverage on a new outbuilding or removing a car, etc. You can also Initiate a claim. I give them extra credit for the good app.

Sometimes I wonder if I am paying for all those Liberty Mutual ads. I also wonder if insurance companies make the long term custmers subsidize getting new clients “in the door”. Maybe this is not true?

I have a hail damage claim from last year. Once this is over I will get three quotes. One will be from Liberty Mutual - I have no complaints with them other than the recent price hike. A second quote will be with an indepenent agent. The third might be a company like USAA or another company that one of you gentlmen and ladies mention in this thread.

Over the years I have had a few claims. It is rare. We had tornado damage to our first house in 1998. House suffered medium damage. Hole in roof. Water damage and garage door pushed in and garage walk pushed out. In 2008 another tornado that passed overhead missed out neighborhood buy hit hard with hail. Last year, 2017 (thought we were safe for one more year). Small amount of very big hail. Not many, but big dents in roof, siding, gutters.

On another note. We have had a cabin in the family built in 1986. We have owned since 2003. No owner has ever had a claim. Go figure.

Swanee

PS - check how they treat the roof. Do you owe a percentage of the replacement based on 30 year roof life and are you comortable taking that on? Same for siding. Meaning if the roof is 15 years old, are you comfortable paying for 1/2 the replacement cost? Make sure your coverages and details match.
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Old 05-06-2018, 01:00 PM   #9
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Have made 3 H.O. claims over the past 35 years. One each with Hartford, State Farm and Met Life. All claims were handled efficiently.

Currently with Farmers as they had the best overall bundled pricing for our needs.
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Old 05-06-2018, 01:07 PM   #10
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PS - check how they treat the roof. Do you owe a percentage of the replacement based on 30 year roof life and are you comfortable taking that on? Same for siding. Meaning if the roof is 15 years old, are you comfortable paying for 1/2 the replacement cost? Make sure your coverages and details match.
Yes- definitely compare coverages. In areas such as TX, windstorm losses are a big % of the premium because they happen so often and the roofers swarm into the affected places like worms after a rainstorm, offering "Free Roof!* *(Must have insurance)". Whether you want to pay for coverage for a new roof after some hail damage to a 2-year old roof is up to you, but it will cost more.

To answer your question: I pay for better coverage and a better reputation. I've never had a Homeowners claim so can't recommend specific companies. Remember, too, that no insurer will ever have 100% satisfaction unless they're writing a blank check to everyone who files a claim. There will always be claimants unhappy with a settlement even if it's exactly the coverage they paid for.
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Old 05-06-2018, 01:14 PM   #11
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We had Allstate for years and never had a problem with any claims we made. That said, over the years, they steadily increased premiums over the years, mostly after the major hurricanes and we don’t live in a hurricane area. I managed to keep the cost increases down by upping deductibles. After the last increase, I checked around and was able to find an insurer that provided a 60% decrease in cost for both auto and HO. I don’t know how the new company handles claims since we haven’t had any in the last 10 years (5 with new company).
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Old 05-06-2018, 01:30 PM   #12
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One issue to be concerned with is it is better to move all insurace (car, home,umbrella) at one time as you need to look at the combined cost. (Plus there are often multiple line discounts) in addition for some things you make have to shop for a new umbrella policy if the company requires the underlying coverage to be with them.
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Old 05-06-2018, 01:33 PM   #13
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Yes- definitely compare coverages. In areas such as TX, windstorm losses are a big % of the premium because they happen so often and the roofers swarm into the affected places like worms after a rainstorm, offering "Free Roof!* *(Must have insurance)". Whether you want to pay for coverage for a new roof after some hail damage to a 2-year old roof is up to you, but it will cost more.

To answer your question: I pay for better coverage and a better reputation. I've never had a Homeowners claim so can't recommend specific companies. Remember, too, that no insurer will ever have 100% satisfaction unless they're writing a blank check to everyone who files a claim. There will always be claimants unhappy with a settlement even if it's exactly the coverage they paid for.
Of course for hail you need to consider paying for a hail resistant roof. (can pay for itself with 2 hail storms) In particular with 1% deductables which are now required. Since my father put a metal roof on the house I inherited, the neighbors have replaced roofs 2 times, and in the 16 years before that the roof got damaged to the point of replacement twice (the second time he went to metal). In addition if your willing to accept cosmetic damage (i.e. dings in the roof), you get a discount.
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Old 05-06-2018, 05:01 PM   #14
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OP here. Thanks for the responses so far. As I mentioned, I'm leaning towards going with Allstate due to the lower premium, especially since I recently had my roof replaced and am not expecting any major HO claims over the next few years. Of course, you never know—there could always be something that happens out of the blue. But even if it does, I would suspect that Allstate's claims process couldn't be too awful. They scored among the top third of all insurance companies in the 2017 J.D. Power rankings (linked to in post #4 above).
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Old 05-06-2018, 06:58 PM   #15
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We had Allstate for 17 years for home and 2 autos. We never made a claim or any claim inquiries. Yet, for the last 5 years we were clients, they raised our HO insurance 10% each year. So DH, who worked in construction, would call, have a lengthy conversation with the Allstate agent, and finally get a reduced increase in premium. It got tiresome. Finally 5 years ago, we switched to AAA and insured our home and now 3 vehicles. Allstate called us 3 times to try to get us to come back. So your reduced premium may be short-lived unless you’re willing to dispute the yearly increase in premiums every year.
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Old 05-06-2018, 07:26 PM   #16
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We had Allstate for 17 years for home and 2 autos. We never made a claim or any claim inquiries. Yet, for the last 5 years we were clients, they raised our HO insurance 10% each year. So DH, who worked in construction, would call, have a lengthy conversation with the Allstate agent, and finally get a reduced increase in premium. It got tiresome. Finally 5 years ago, we switched to AAA and insured our home and now 3 vehicles. Allstate called us 3 times to try to get us to come back. So your reduced premium may be short-lived unless you’re willing to dispute the yearly increase in premiums every year.
One question how much of the increase was due to increase in construction costs? Often a good piece may be due to that, check the limits on the policy from year to year and compare their increase to the increase in premiums. This automatic increase is designed to keep your limit above the limit where the coverage changes to an actual depreciated value from replacement cost (read policies to see differences)
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Old 05-06-2018, 09:37 PM   #17
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The last thing I would want is bad claims service on top of a loss. It would be stressful enough to have your house burn down without having to argue every step of the way while you are fighting to rebuild and living in a hotel room. . . .
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Old 05-06-2018, 10:34 PM   #18
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One question how much of the increase was due to increase in construction costs? Often a good piece may be due to that, check the limits on the policy from year to year and compare their increase to the increase in premiums. This automatic increase is designed to keep your limit above the limit where the coverage changes to an actual depreciated value from replacement cost (read policies to see differences)
Note that every so often you read about a person whose house burned down but had 20 year old limits on their policy, so that they did not get enough to rebuild. There was a story about a Serbian orthodox cathedral in Manhattan that burned down and would cost about $60 million to rebuild but the insurance company would only pay $12.5 million. The article did not say what the limits on the insurance policy were. (The fire is actually in a video on youtube).
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Old 05-06-2018, 11:08 PM   #19
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We too have Allstate and have been with them for many years (15-20). The agent we deal with has a bricks & mortar location in our neighborhood, and we can actually talk directly with him when questions or issues come up. However, premiums have increased in particular on our homeowners so I am considering doing a competitive bid on the bundle (homeowners, auto, umbrella) to see whether our pricing is in line or not with competitive offerings.

What is the easiest/best way to get competitive quotes and to make sure the quotes are for comparable coverage/deductibles/etc.?
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Old 05-06-2018, 11:15 PM   #20
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We too have Allstate and have been with them for many years (15-20). The agent we deal with has a bricks & mortar location in our neighborhood, and we can actually talk directly with him when questions or issues come up. However, premiums have increased in particular on our homeowners so I am considering doing a competitive bid on the bundle (homeowners, auto, umbrella) to see whether our pricing is in line or not with competitive offerings.

What is the easiest/best way to get competitive quotes and to make sure the quotes are for comparable coverage/deductibles/etc.?
Assuming your current limits are more or less up to date, you could then ask for the same limits adjusted for their inflation adjustments for the year from each. Find your current policy and note its limits. If they have not been adjusted recently they the best bet would be to discuss the issue with each agent. Ask for the quote to include the limits. Also decide if its time to increase deductibles on both the auto and home damages section.
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