BEWARE of State Farm Insurance

[Ingomike]

Big hail came through our neighborhood about 20 years ago. EVERYBODY got a new roof, except for our neighbor who had SF.

Heard that story dozens of times.

Also heard this, then an agent explained why this happens.

“When the mega hail storm hit SF treated us like gold.”

The truth. SF (and most insurance companies) buy insurance to protect themselves against big catastrophes. I was told that right away SF knew they were beyond the deductible of their reinsurance, so they paid the early claims, spending like a drunken sailor. Then when the reinsurance kicked in the reinsurance company made them hold claims to the minimum so they became super stingy leading to seemingly disparate outcomes depending on how quick the insured got their claim started and finalized.

 

[Peacekeeper3073]

State Farm is a joke. Several years ago woman ran red light and T-boned my wife. Long story short the other driver had State Farm too and we had to go to court just to get bills paid and car replaced. My "agent" even said to get what we were owed we would have to sue them. They spent more money on attorneys and court costs just to pay what they owed us according to our policy.

 

[manifest destiny]

To my fallible memory, I've never purchased insurance from State Farm. But I must say, SF is, without a doubt, the most heavily advertised, solicited insurance companies I can think of. Way over the top in attempts to procure new customers. That level of marketing isn't cheap.

 

[rhamersley]

YMMV...I switched TO State Farm last year after being with American Family for 26 or more years. I'm now paying for two cars and my home the same amount I was paying for just my house with Am Fam, and I have full coverage on both vehicles and comparable coverage on the home. When they start raising the premiums, I'll search around again...was just too complacent to check up on Am Fam for all those years.

 

[firecadet613]

State Farm paid out on a pipe burst claim I had years ago with no issues. Ten years later, on a different house, they put a new roof on due to wind damage, again no issues.

We switched to American Family a few years ago when SFs' rate on my new truck was outrageous.

Planning on switching to Erie (through a local independent agent) once we sell one of the homes. Am Fam has been creeping up, but it didn't make sense to switch everything and then cancel one of the policies shortly thereafter.

 

[dudley0]

I have Sf on a LOT of policies. Actually the only thing I do not have with them is my contractor's policy. That is because they stopped doing that years back.

I had a claim a few years back. Someone stole my commercial mower, trailer, and bed box full of tools.

Turns out the trailer wasn't covered, but everything else was. My agent explained that trailers need their own policy unless hooked to your truck. Playing the long game I saved more than the trailer cost by not having it. I did get a new mower and most of the tools that I remembered at the time replaced. I really miss my old trailer tho.

As far as properties go we meet with the agent maybe once a year to go over all the policies we have. I have opted to go with higher deductibles to save money. We use the percentage plan as well which saves a little more.

I know a few people that self insure. I'm too chicken for that on properties.

 

[Ingomike]

YMMV...I switched TO State Farm last year after being with American Family for 26 or more years. I'm now paying for two cars and my home the same amount I was paying for just my house with Am Fam, and I have full coverage on both vehicles and comparable coverage on the home. When they start raising the premiums, I'll search around again...was just too complacent to check up on Am Fam for all those years.

That is their MO. They get new accounts in the door with low rates, then when you have claims that make it difficult to get new insurance they jack you way up.

 

[CHCRandy]

Man, I hate working with insurance companies on homeowners claims anymore. We have so many crooked contractors and so many crooked adjusters and crooked insurance companies.....that it is just always a fight with someone. Most adjusters no longer even inspect the roof.....they send other companies out to inspect or they use drones. Just worthless really!

I will list the 3 biggest issues I find with claims that "surprise" homeowners.

1. Deductibles. Most people have no idea what their deductible is. Some people still have $100 deductible, others have 1% of insured amount, $400,000 coverage, $4000 deductible. In Texas, some people pay 10% deductible for hail damage......so 1% may look like a steal someday.

2. Policy type. I cannot tell you how many people have no idea if they have RCV or ACV coverage. I just done a hail job. Home was maybe $150,000 home, insured for $200,000. Insurance paid almost $9000 for claim, but the people had ACV policy. So they got $9000 and insurance deducted $2000 deductible (1% of 200K) and then depreciated the shingles $2500, since they were 13 years old. So homeowners got 9000 minus 4500, $4500....or about half of replacement cost. If they would have had RCV policy, which is about $100 a year more........they would have been able to recover the depreciation.

3. Detached structure coverage. People are always shocked to find out a detached garage is insured at 10% of home insurance coverage. So if you have a $200,000 coverage on home, you will have $20,000 coverage on a barn or garage......now days, you probably wouldnt get enough to rebuild the garage or barn. SO I suggest people make sure to raise coverage on detached structures, or at least check your coverage.

To me, the best deal is flat deductible $ amount, RCV policy only.......dont even think about saving a few dollars with an ACV policy and always check your detached structure coverage.

 

[Ingomike]

Man, I hate working with insurance companies on homeowners claims anymore. We have so many crooked contractors and so many crooked adjusters and crooked insurance companies.....that it is just always a fight with someone. Most adjusters no longer even inspect the roof.....they send other companies out to inspect or they use drones. Just worthless really!

I will list the 3 biggest issues I find with claims that "surprise" homeowners.

1. Deductibles. Most people have no idea what their deductible is. Some people still have $100 deductible, others have 1% of insured amount, $400,000 coverage, $4000 deductible. In Texas, some people pay 10% deductible for hail damage......so 1% may look like a steal someday.

2. Policy type. I cannot tell you how many people have no idea if they have RCV or ACV coverage. I just done a hail job. Home was maybe $150,000 home, insured for $200,000. Insurance paid almost $9000 for claim, but the people had ACV policy. So they got $9000 and insurance deducted $2000 deductible (1% of 200K) and then depreciated the shingles $2500, since they were 13 years old. So homeowners got 9000 minus 4500, $4500....or about half of replacement cost. If they would have had RCV policy, which is about $100 a year more........they would have been able to recover the depreciation.

3. Detached structure coverage. People are always shocked to find out a detached garage is insured at 10% of home insurance coverage. So if you have a $200,000 coverage on home, you will have $20,000 coverage on a barn or garage......now days, you probably wouldnt get enough to rebuild the garage or barn. SO I suggest people make sure to raise coverage on detached structures, or at least check your coverage.

To me, the best deal is flat deductible $ amount, RCV policy only.......dont even think about saving a few dollars with an ACV policy and always check your detached structure coverage.

Well explained post.