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I just bought a house and I started making calls for home owners insurance quotes. My first call was to Liberty Mutual. They said they cannot insure me because I live near a body of water. Uh, I live on a frickin island! Should I expect to get more of this when I call Allstate, farmers, nationwide, state farm, etc?
Oh I will be living in Deer Park.
The closest body of water is a lake about 2/3 mile away. The ocean is about 4 miles away.
Last edited by VoyagerMan; 09-13-2009 at 02:11 AM..
how funny is this, im in a high rise building in bayside queens on bell blvd. that little bay never ever flooded yet geico said we are in a flood zone and couldnt write the policy. geico uses travelers as its home insurance arm .
i called travelers direct and they said sure no problem writing a policy for your area,.
how funny is this, im in a high rise building in bayside queens on bell blvd. that little bay never ever flooded yet geico said we are in a flood zone and couldnt write the policy. geico uses travelers as its home insurance arm .
i called travelers direct and they said sure no problem writing a policy for your area,.
lol. Geico said they don't insure my area. But maybe if I call travelers direct like you did I'll get a different answer.
Boy does this thread strike a chord. I got nonrenewed last month by Liberty for the same reason. Here's 2 pieces of info that might help others in the same boat.
1. If you can't get or replace insurance from a 'regular' company like Liberty, State Farm, Travellers, etc, you can go to an independent insurance agent and ask them to get quotes for you from other companies. Here's the catch. Those other companies are what's called EXCESS LINE insurers. They're the Assigned Risk of the homeowners insurance world. Many of these excess line companies are NOT licensed in all states. Some of them, like Lantana Insurance Ltd, are not licensed in ANY state and are owned by an offshore (literally) corporation. But they're allowed to sell policies to people who have been denied by at least 3 'regular' insurers.
Here's the catch. If you buy homeowners insurance from an Excess Line company that is NOT licensed in your state, you have no protection if the company goes bankrupt. Suppose your area gets hit by a major hurricane or an earthquake or a California forest fire and there's so much damage that the insurance company that insures your house can't pay the claims. If that company IS licensed in your state, you are protected by that state's Insurance Security Fund and so even if the company declares bankruptcy, that Fund will pay your claim. It's like the FDIC does for banks but this is on the State level.
But if your home is insured by an Excess Lines company that is NOT licensed in your state, and that happens, guess what, you have no recourse and you will not get a dime.
So anyone who loses or can't get regular insurance and has to go with an alternative company should find out whether that other company is licensed in their state or not.
Also an excess line company is allowed to charge much more for a premium than state laws allow regular companies to do. You will get less coverage for your money. Just like Assigned Risk. And their policies don't have to conform to the regulations of any state in which the company isn't licensed. So it's Buyer Beware.
2. Most states offer homeowners insurance to people who have been denied by regular companies or can't afford the high premiums charged by excess companies. It's usually very basic coverage and liability insurance usually ISN'T included. But you can get around that by taking a state policy out that insures only the house ("dwelling") and then taking out a separate Renters Policy from a regular insurance company. A renters policy will give you Liability and Personal Property/Contents insurance and is relatively cheap, usually only a couple hundred dollars a year.
p.s. Here's another trick the excess line companies pull. On a normal homeowners policy you'll have a standard deductible and then if you're in a hurricane risk area you'll have a much bigger separate hurricane deductible. On normal policies the standard deductible covers Wind and Hail damage, in other words if a big tree limb falls through your roof in a windstorm (not a hurricane) only your normal deductible will apply. Lets say it's $2000. But these excess lines companies COMBINE Wind, Hail and Hurricane in a bigger deductible, usually either 2% or 5%. Lets say your house is insured for 500K and a big tree limb falls through your roof during a nor-easter. On a normal policy you'd have to pay the first $2000. But if you have an excess lines policy you'll be responsible for the first $10,000 (if it's 2%) or the first $25,000 (if it's 5%) for ANY damage caused by ANY wind, hurricane or not.
This is one of those things the agents probably won't explain to customers, along with the "not licensed in your state" thing.
Last edited by A_Cooler_Head; 09-13-2009 at 08:22 AM..
I just bought a house and I started making calls for home owners insurance quotes. My first call was to Liberty Mutual. They said they cannot insure me because I live near a body of water. Uh, I live on a frickin island! Should I expect to get more of this when I call Allstate, farmers, nationwide, state farm, etc?
Oh I will be living in Deer Park.
The closest body of water is a lake about 2/3 mile away. The ocean is about 4 miles away.
I live a block away from the water and I use farmers.
Please read your Homeowners policies. Flood is NOT covered. If you up on a bluff or in an apartment building on the 20th floor, they aren't scared of your property flooding. They are scared of wind damage. Take note of your wind deductible. Lets say you have $500,000 in dwelling coverage. You probably have a 5% wind or hurricane deductible(this is a company by company thing) take 5% of $500,000 = $25,000 and that is your deductible if you suffer this type of damage.
Call an independant insurance agency. There are tons of other companies out there besides Allstate, State Farm, GEICO, and Liberty Mutual. Just becuase they advertise doesn't make them good. They advertise because that is how they attract customers. Companies that don't advertise pay commissions instead to Independant Agents that look out for your best interests.
Call an independant insurance agency. There are tons of other companies out there besides Allstate, State Farm, GEICO, and Liberty Mutual. Just becuase they advertise doesn't make them good. They advertise because that is how they attract customers. Companies that don't advertise pay commissions instead to Independant Agents that look out for your best interests.
And many of those companies are Excess Lines companies as I described above, with the pitfalls those entail.
By the way, the typical commission paid by an Excess Lines company to an independent agent is 10% of the yearly premium. And anyone who thinks that an independent agent won't, if all other things are equal, steer a customer toward a company that pays a 10% or 15% commission rather than one that only offers an 8% commission is fooling themselves.
The lack of advertising by excess lines companies isn't out of the goodness of their hearts, it's because they serve a niche market: People who are having trouble getting insurance through standard companies. In fact in order to get an excess policy a customer has to sign an affidavit saying they've been rejected by at least 3 regular companies (whether that fact is true or not; I had one independent agent tell me 'don't worry about it, I'll just put down that I tried 2 other companies and they said no').
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