It is our obligation to insure our clients by coverage not price. Unfortunately if your pricing is inferior than having the correct replacement cost means another cancellation. Farmer’s in California is not even close, neither was Allstate so they stopped writing their home policy.
This is no big surprise, when companies like Farmer’s and Statefarm are using less than $200 a foot to rebuild on their cost estimators.. Their problem is that their rate is already higher than the market. Many of these agents are telling their client not to worry that the extended replacement will pay the difference. These agents are either not telling the truth, or they do not understand the endorsement. This endorsement clearly states that their will be no extension, unless the home is insured to value at the time of loss. Unfortunately, overpriced policies have created this problem………….
No surprise. Don’t blame the agents unless you point the same finger at the cheap consumer who saves $50 on his policy to opt for a lesser coverage, and lower limits. This, in truth, is more of the rule, where ignorant agents are more of the exception.
You are assuming that the big insurers are undervaluing their replacement costs yet the example given was not one of the big three. It would be interesting to see a breakdown of those surveyed and see how many of those underinsured had a Farmers or State Farm policy.
Agents and companies ARE to blame in most cases. A recent remodel on my home and subsequent insurance assessment by the company put the cost to rebuild at less than half per sq foot than what I just paid.
In this case, if the customer was insured by Amica, he did not have an agent. The decision would have been between him and someone he was talking to at a 1-800 number.
my clients have the final say regarding the amount of ins if they question the companies figures i suggest that they have a contractor come and estimate the rep cost for them nobody ever does !!!!!!
Guys the bottom-line here is simple, insure the home for it’s replacement. Amica is a 1-800 carrier, however, if 50% of those homes were insured by Statefarm, Farmers, or Allstate, then HOUSTON we have a problem, not enough coverage.
By your own statement the insurance company is not to blame. You are aware that their replacement cost estimate was low and therefore the responsibility lies with you to increase the replacement cost coverage to meet your expectations. As long as you can show your cost is valid (appraisal, invoices etc..)the insurer should increase the coverage to match what you need. If not, find a company that will. Of course, along with the increased coverage will come the increase in premium. Try telling a court that you knew the policy was too low on coverage yet bought it anyway and see how far you get. The courts have held that the responsibility for insuring to value lies with the property owner not the insurer. It’s your home, you own it, you live there and therefore it is your responsibility. The agent is presenting a product to you for acceptance, once you accept it you are in effect agreeing that the value is correct. If you don’t agree, don’t accept the policy. Plain and simple.
There is no one person/entity to blame except perhaps human nature.
The consumer desires a low cost ‘full’ coverage best deal.
The agent desires a new customer and commission.
The Company desires a new customer and to pay only the coverage afforded under the contact.
Until consumers understand value rather than price, agents will continue to point their fingers both ways and companies will all get tarred with the same brush.
Agents need to sell products rather than price. The penny-wise customer is your fool for life. Why would you as an agent wish to enter into that deal?
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It is our obligation to insure our clients by coverage not price. Unfortunately if your pricing is inferior than having the correct replacement cost means another cancellation. Farmer’s in California is not even close, neither was Allstate so they stopped writing their home policy.
This is no big surprise, when companies like Farmer’s and Statefarm are using less than $200 a foot to rebuild on their cost estimators.. Their problem is that their rate is already higher than the market. Many of these agents are telling their client not to worry that the extended replacement will pay the difference. These agents are either not telling the truth, or they do not understand the endorsement. This endorsement clearly states that their will be no extension, unless the home is insured to value at the time of loss. Unfortunately, overpriced policies have created this problem………….
No surprise. Don’t blame the agents unless you point the same finger at the cheap consumer who saves $50 on his policy to opt for a lesser coverage, and lower limits. This, in truth, is more of the rule, where ignorant agents are more of the exception.
You are assuming that the big insurers are undervaluing their replacement costs yet the example given was not one of the big three. It would be interesting to see a breakdown of those surveyed and see how many of those underinsured had a Farmers or State Farm policy.
Agents and companies ARE to blame in most cases. A recent remodel on my home and subsequent insurance assessment by the company put the cost to rebuild at less than half per sq foot than what I just paid.
In this case, if the customer was insured by Amica, he did not have an agent. The decision would have been between him and someone he was talking to at a 1-800 number.
my clients have the final say regarding the amount of ins if they question the companies figures i suggest that they have a contractor come and estimate the rep cost for them nobody ever does !!!!!!
Guys the bottom-line here is simple, insure the home for it’s replacement. Amica is a 1-800 carrier, however, if 50% of those homes were insured by Statefarm, Farmers, or Allstate, then HOUSTON we have a problem, not enough coverage.
By your own statement the insurance company is not to blame. You are aware that their replacement cost estimate was low and therefore the responsibility lies with you to increase the replacement cost coverage to meet your expectations. As long as you can show your cost is valid (appraisal, invoices etc..)the insurer should increase the coverage to match what you need. If not, find a company that will. Of course, along with the increased coverage will come the increase in premium. Try telling a court that you knew the policy was too low on coverage yet bought it anyway and see how far you get. The courts have held that the responsibility for insuring to value lies with the property owner not the insurer. It’s your home, you own it, you live there and therefore it is your responsibility. The agent is presenting a product to you for acceptance, once you accept it you are in effect agreeing that the value is correct. If you don’t agree, don’t accept the policy. Plain and simple.
There is no one person/entity to blame except perhaps human nature.
The consumer desires a low cost ‘full’ coverage best deal.
The agent desires a new customer and commission.
The Company desires a new customer and to pay only the coverage afforded under the contact.
Until consumers understand value rather than price, agents will continue to point their fingers both ways and companies will all get tarred with the same brush.
Agents need to sell products rather than price. The penny-wise customer is your fool for life. Why would you as an agent wish to enter into that deal?