BEWARE of State Farm Insurance

[Hkindiana]

I went in to State Farm yesterday to make my first ever homeowners claim (In over 40 years of home ownership). I found out that State Farm has done away with standard deductibles. They now use 1/2 of 1% of the houses insured value. So, homeowner #1 insures his house for $100,000 and has a tree go through a $2500 window, his deductible is $500, and State Farm pays $2000. Homeowner #2 insures his home for $400,000 (and his insurance costs MUCH MORE than homeowner #1). A tree goes through #2’s $2500 window, and HIS deductible is $2000, and State Farm only pays $500. How is this fair? Do they figure that even though you pay higher premiums for an expensive house, you can AFFORD to pay more for a loss? It sure sounds like a WOKE policy to me. Do ALL insurance companies do this?

 

[SheepDog4Life]

It might be the new "norm". I encountered that same thing with AAA Homeowners on a hail damage claim 3 years ago, deductible was % of covered amount. Not sure when it changed since the original policy was 12-13 years prior and I'm pretty sure it wasn't percentage based then... whenever it changed, I'm guessing that was "buried" in the pages of **** I didn't read.

Thankfully, the roofer "covered" the deductible... so it was a non-issue.

 

[HoughMade]

Fair? Darned if I even know what that it.

There are other insurers.

 

[Pepi]

"There are other insurers."

Most of them are thief's

 

[HHollow]

The OP has great info. Now to ask my carrier if they do the same. Please, if any members find other carrier doing this then please report.

 

[Shadow01]

I went in to State Farm yesterday to make my first ever homeowners claim (In over 40 years of home ownership). I found out that State Farm has done away with standard deductibles. They now use 1/2 of 1% of the houses insured value. So, homeowner #1 insures his house for $100,000 and has a tree go through a $2500 window, his deductible is $500, and State Farm pays $2000. Homeowner #2 insures his home for $400,000 (and his insurance costs MUCH MORE than homeowner #1). A tree goes through #2’s $2500 window, and HIS deductible is $2000, and State Farm only pays $500. How is this fair? Do they figure that even though you pay higher premiums for an expensive house, you can AFFORD to pay more for a loss? It sure sounds like a WOKE policy to me. Do ALL insurance companies do this?

SIL works at the bloomington HQ and says she wouldn’t have their coverage even if it was free.

 

[HoughMade]

How do you know the premium isn't lower than it otherwise would be with a lower deductible?

 

[Hkindiana]

How do you know the premium isn't lower than it otherwise would be with a lower deductible?

What does that have to do with the different deductibles they charge on two identical claims based solely on the homes value?

 

[HoughMade]

What does that have to do with the different deductibles they charge on two identical claims based solely on the homes value?

The risk on the more expensive house is much higher. The claims may be the same here, but how many windows are there in a larger, more expensive house with, usually, more expensive components and finishes. More obviously, what is the risk when a $200k house burns down versus a $500k house? This goes for deductibles as well. As I stated above, a more expensive house generally has more expensive losses. In a given case, perhaps not, but they have to set premiums and determine deductible based upon anticipated risk, not after-the-fact knowing what the claim was.

In any event, when policies allow the deductible to be chosen, a higher deductible results in a lower premium. How do you know that with the $500k house in this scenario, the premium would not be higher if the deductible is lower, at the same level as a $200k house?



...but like I said before, what is fair? An insurance policy is a contract. It's all in the contract/policy. They cannot change the terms without notice.

 

[marvin02]

I went in to State Farm yesterday to make my first ever homeowners claim (In over 40 years of home ownership). I found out that State Farm has done away with standard deductibles. They now use 1/2 of 1% of the houses insured value. So, homeowner #1 insures his house for $100,000 and has a tree go through a $2500 window, his deductible is $500, and State Farm pays $2000. Homeowner #2 insures his home for $400,000 (and his insurance costs MUCH MORE than homeowner #1). A tree goes through #2’s $2500 window, and HIS deductible is $2000, and State Farm only pays $500. How is this fair? Do they figure that even though you pay higher premiums for an expensive house, you can AFFORD to pay more for a loss? It sure sounds like a WOKE policy to me. Do ALL insurance companies do this?

I have been a State Farm customer for 30+ years.

Every time State Farm makes a change to my policy I get a notice. It's easy to just toss them aside or file them without looking closely at them.

I remember when they changed the way they do deductibles. I got at least 3 notices before the change was made.

I've been happy, in the end, with every claim I have made through State Farm.

Shop around for another insurance provider if you aren't happy. State Farm is not the only home insurance provider who uses this method.

 

[KLB]

We use an independent agent. They make sure to inform of us anything like that, and they will shop around for us. We've been really happy with them.

 

[Cavman]

Only had state farm once. My rates got raised, so I went to see my agent. They said it was because of all the tornadoes at the time way down south. I said that has nothing to do with me so I promptly dropped them and changed.

 

[marvin02]

Only had state farm once. My rates got raised, so I went to see my agent. They said it was because of all the tornadoes at the time way down south. I said that has nothing to do with me so I promptly dropped them and changed.

No matter who your insurer is their total costs figure into your rate. So you may not be told about it but the more they have to pay out for policy holder losses the more everyone pays for insurance.

 

[spencer rifle]

Read the crappy fine print. When our American Family-insured rental property had a claim (tenant became a druggie after several years of good tenancy, wife took off for a battered women's shelter, husband stole all our appliances, we reported to the local police while the theft was underway, they couldn't be bothered until 2 days later), we discovered that if anyone but the tenants stole the appliances, it would be covered. So we were out $6000 plus lost rent. Dropped them like a hot rock.

 

[Expat]

Insurance companies are losing money right now. There are more storms, more severe storms, inflation, more lawsuits, crazy jury verdicts, vehicles more expensive, cost to repair them has gone crazy. . They are looking for ways to reduce loss costs. Going to these deductible schemes is just one way they are trying without just jacking up premiums. Stay tuned there will be more to come.

 

[bwframe]

Insurance companies are losing money right now. There are more storms, more severe storms, inflation, more lawsuits, crazy jury verdicts, vehicles more expensive, cost to repair them has gone crazy. . They are looking for ways to reduce loss costs. Going to these deductible schemes is just one way they are trying without just jacking up premiums. Stay tuned there will be more to come.

Don't forget the chasers...

..."if you have been injured..."

 

[Alamo]

On the bright side, State Farm is one of the very few auto insurers who will insure the UHaul truck you just rented. At least in Texas. Most will just provide liability, if that. So most of the time you need to buy the UHaul damage protection if you don’t want to be on the hook for the entire rental truck (or trailer).

And while we’re talking about stuff you didnt know about insurance, if your homeowner‘s covers off premises stuff, for example, the contents of your storage rental unit, it’s often a percentage of the insured value, usually 10% from what I’ve seen.

Take a copy of your homeowner’s (or renter’s) insurance with you, if it covers off premises storage, when you go to rent a storage unit. It may save you having to buy the rather expensive and not very useful insurance offered by the storage facility. I’m pretty sure that all the big corporate storage facility chains will require you to ensure the contents of the storage unit. Mom & pop storage facilities are often more flexible on this.

Sometimes State Farm or other big insurance companies will provide you with a statement that says rental unit is covered up to a certain amount, otherwise the storage facility will want to see the declarations page proving you have off-premises coverage, and make a copy of it.

(Your storage lease likely has a clause that absolves the storage facility for any loss you suffer while storing at their facility, and limiting the value of what you can put in there to some low number, like $2000. All the storage facility is really doing is renting you space. That’s it. No promise of any level of security. So think about the value of what you are storing in there and whether you have it adequately insured. Most people don’t actually care about having their stuff insured anyway.)

 

[ghuns]

About to go through the same thing with State Farm. Hail damage to the roof and siding.

Can't wait.

 

[Dr.Midnight]

I had State Farm auto insurance for years, even when I had a company car. I got lazy and let my personal vehicle insurance expire for a couple of months and when I went to renew, State Farm wouldn't touch me, even after being a pretty darn good customer for years. It was easy to find another insurer, but what makes me scratch my head are the year later invitations to come back after they gave me the boot. After the second one, I told them never contact me again.

 

[Ingomike]

Why does anyone want an agent that ONLY represents the company, not you? SF agents are employees of SF, I object to calling them agents as they cannot do anything to help an insured. Get an independent agent, an agent that represents you.

SF is notorious for giving low rates by gutting coverages and deductible schemes. Read the policy close.