YOUR LEGAL RIGHTS | Here’s some advice on homeowners insurance
This week, I am going to offer some advice and commentary regarding one of my favorite topics: the insurance industry. Specifically, homeowners insurance.
This discussion has been precipitated by the incredible amount of precipitation that fell on the area earlier this month. The combination of the deluge, which would have motivated Noah to build another boat and the untimely demise of my sump pump gave me the opportunity to forge a close relationship with the fine folks from Servpro who sucked the water out of my basement and cleaned up the mess.
Thanks, guys.
The flood also forced me to evaluate the sewer backup and water damage coverage provided by my homeowner’s policy. The result of that evaluation: I needed to up the dollar amount. So after I finished paying my share of Servpro’s charges, I called my agent and doubled it.
I can hear my fellow homeowners screaming, “You did what? You filed a claim and increased your coverage? You can’t do that. The Geico lizard will cancel your policy, raise your rates, or do both. It’s going to be just horrible.”
Uh, no it is not. And that Geico lizard and his buddies Flo, Mr. Mayhem, Major League’s Pedro Cerano who gave up baseball to become the Allstate guy, Aaron Rodgers who now pitches insurance as well as footballs, the annoying Aflac duck and the other characters who front for insurance companies are the reason why. As I have said before, insurers do not spend billions and billions of dollars on advertising each year because they do not want your business. They shell out the big bucks because they do.
And I am happy to oblige. Every year I call my insurance agent and tell him to find me the best homeowners coverage at the absolute best price. After we talk, he puts down his putter, fires up his computer and comes up with a quote. If the company I have at the time is offering the lowest premium, I stand pat. If not, I switch. Simple as that. Oh, and it usually saves me hundreds of dollars.
Seriously, if you own a home and you do not do this, you are making a costly mistake. Changing your insurance company is not like getting a divorce. Flo is not going to cry if you toss her over the side and run into the arms of the Geico gecko who is waiting to welcome you with open arms or legs or whatever lizards have.
I talk to some people who say they stay with the same company year after year — even if their premiums go up — out of loyalty. These are the same people, by the way, who refuse to file a claim because they are afraid their insurer will immediately cancel their policy. It is a fear that Allstate and the gang stoke because it makes property and casualty insurance the most expensive product people buy and are terrified to use.
I will conclude with these two pieces of advice: First, shop your car and homeowners insurance annually. If you find a better deal, grab it. Believe me, Aflac CEO Daniel Amos, who made $15.7 million last year, will not notice that you have flown the coop.
Second, if you suffer, do not hesitate to file a claim. If your insurer cancels you, uncancel yourself and find another company. If your premium goes up, start shopping, find a lower rate and wave bye-bye.
