Insurance travails pt1

There are too many things we do not know about how to live a life in USA 2008. More than any one person should have to know. In fits of political pique, I often attribute this to Ronald Reagan, who first deregulated virtually everything in our lives and in so doing set loose the mad dogs of hypercaptialism. On a practical--nonpolitical--level, this means that rather than deal with one phone company every month, I deal with four, plus my internet provider, plus my satellite TV company plus plus plus plus, well, you get the picture. Life, the monthly maintenance of which used to involved writing about five checks to pay my various obligations, now requires several hours of bookkeeping (the only word in the English language with a triple double letter, btw) and even more phone calling, the latter activity aimed at correcting the various ways various service suppliers try to fuck you up each month, either through gross errors or deliberate malice.

Which brings us to the topic of the day: Insurance companies.

In what I can only attribute to an unquenchable need to reinforce every stereotype and cliché of the industry, our homeowners insurance company, Allstate, has decided to drop us from their rolls.

Just to get the pathos out of the way early and get to the meat of the matter (corporate criminal behavior), let me paint the human picture for you. We live in a slightly shabby rental home, with rented furniture, rented dishes, rented candles, rented brooms, etc. (see This Rented American Life) while we await the rebuilding of our almost totally destroyed home. 80% of our personal possessions have been totally destroyed, the remainder being precious (artwork and photos) but not practical (can't eat off a painting). Elicia and I both work full time, high value jobs in addition to the ongoing reconstruction of our lives. 

For Elicia, that means managing a personal possessions claim involving 120 pages of totally lost items, 15 items per page, handwritten in almost indecipherable penmanship by the team hired to excavate our lives after the fire. Each item requires that she correctly identify it (name, make, model number), ascertain its original purchase price, age, quantity, and replacement cost, and then back that info up with receipts if we have them, going back 7 years. Her process is further complicated by Allstate's insistence that all submissions be handwritten on the same messed up pieces of paper they handed us and their refusal to provide us or allow us to use any electronic means of communication, like a database.

For me, that means managing the complete reconstruction of the house, in addition to the ongoing wrangling with Allstate to get them to pay a reasonable amount of money to accomplish this.

Both, full time jobs, in addition to our full time jobs.

Now, as if we were not burdened enough, Allstate is trying to dump us.

So, other than the obvious lack of compassion, what is wrong with this picture?  Here's what you don't know about your homeowners insurance.

Insurance companies have what they call "underwriting guidelines," basically, the circumstances under which they consider you an insurable risk. They have the right to dump you if you exceed these guidelines, as long as they do so uniformly and without discrimination, ie, everyone gets treated the same. Though these guidelines are registered with the state insurance commission, however, Allstate (and probably your company too) does nothing to make this information readily available to its customers. 

Why is this a problem? Their lack of transparency allows them to profit at their customer's expense by selling products you cannot use.

Here's how it worked in our case. We paid top dollar for Allstate's lowest deductible policy, covering the replacement cost for all losses to our home and personal property above $500. Allstate's unpublished underwriting guidelines, however, allow them to dump anyone with two claims against their policy within a five year period. Last year, believing that I had paid for insurance that would cover me for relatively small losses, I filed a $3000 claim to replace my golf clubs, which were stolen from my car during the summer (the car was stolen and recovered, sans clubs, which were in the trunk). Allstate was very cooperative in handling the claim, and happily applied my $500 deductible before paying me about $2000 toward the cost of the replacement clubs.

Then the house burned up.

Now, a mere two weeks before we begin reconstruction, Allstate has sent us a letter telling us that they are dumping us from their insurance rolls, leaving us uninsured during reconstruction and at the new house, which, by the way, they are paying for. They have decided, and incredible as it sounds, that having filed 2 claims within 5 years (for a stolen car and a destroyed house, neither of which we were within a mile of), that we are a higher risk for filing another claim this year.

So after 10 years of dutifully paying premiums, adios dude.

Now I am out in the wooly world of insurance shopping with claims on my record.  Not fun. No, not fun.