How Insurance Companies And Appraisers Scam Their Customers

Insurance companies and appraisers sometimes scam their customers to make more money. Here's a story about how my homeowner's insurance premium got raised without my consent.

I've always trusted my insurance company, which I'll call TRICKY DICK, to do the right thing. After all, I've been a client of theirs for 22 years. They've benefited from my growth in assets and I now have auto insurance, homeowner's insurance, valuable personal property insurance and an umbrella policy with them.  Furthermore, I've got a relatively large chunk of change in CDs deposited with them as well.

I had a unwelcomed change on my credit card the other day and had to call Tricky Dick to cancel my existing card on file and add a new one. Imagine my surprise when looking over my previous statement that they were billing me 45% more a month in premiums!

What the hell, I thought to myself.  Clearly there must be a mistake.  Oh how wrong I was.

How My Insurance Company Scammed Me

Tricky Dick sent out a “mandatory” home inspector to my house last December to make sure my re-building costs were still the same. I don't know what the rule is, but supposedly after so many years, a home inspection is mandated by law, or so a letter from Tricky Dick said. Uh huh.

The inspector noted the amenities in my house and calculated the square footage. Apparently, the home inspector and Tricky Dick now believe I live in a mini-mansion with a livable square footage estimate 50% higher!  WTF guys!

Based on Tricky Dick's new square footage estimate, it now costs me $400/sqft to rebuild my house based on the new 50% larger size, and  $600/sqft on my house's real square footage!

Somehow, the home inspector and Tricky Dick think that instead of hard wood floors, I have gold floors. All the door knobs have suddenly turned from crystal to diamonds. Meanwhile, my roof is not just any old roof, it's clearly a landing pad for one of my Airwolf Helicopters.  Come on guys.  $400-600/square foot in building cost is ridiculous!

When I asked the Tricky Dick insurance woman how much the building costs are for her area in Colorado, she said $100-$200/sqft. Exactly, so why the F does Tricky Dick think it costs 4-6x more to build a house in San Francisco? It's not like California has special wonder board, windows, nails, tiles, roofing, and wood. The materials are largely the same. But the labor is slightly higher, not 4-6X higher.

She sheepishly agreed and said she'd look into it.

Guilty Until Proven Innocent

This is what really pisses me off. Despite telling Tricky Dick to look up my house on the SF county records to see the real square footage, she said it is up to me to prove the real size of my house!

Her company prevents her from logging on to the SF county records, Zillow, and all these other online real estate companies because of “security” reason. It is absolutely ludicrous that I have to fight the crooked home inspector's assessment.

Good thing I have an appraisal report from last year when I refinanced, detailing the floor plans, square footage and all the details within my house. If I didn't, I'd have to go spend $700 to get an appraisal and then send it in.  What a waste of time and money!

When companies waste my time, that's when everything goes to hell. I did some investigating by talking to my friends in the real estate industry and what I found was disturbing.

What Home Appraisers / Inspectors Are

They basically said home appraisers/inspectors are henchmen used to enrich the banks and insurance companies. With the banks, home appraisers manipulate the value higher so that a seller can sell to the buyer, even if the value is lower than reality. If a home does not appraise for what the buyer wants to pay, no transaction happens and nobody gets paid.

For insurance companies, home inspectors are asked to increase the value of the home by increasing the square footage and embellish the value of the amenities. Instead of laminate floors, they'll put in Brazilian Cherry hardwood floors, or in my case gold floors. Instead of simple lights, they'll enter crystal chandeliers to use to juice their estimates. This way, the insurance companies can charge a higher premium for coverage.  In my case, Tricky Dick plans to charge me a full $1,200 more a year.

I am so disappointed that after all the money I have parked with Tricky Dick and after 22 years of being a client, they'd want to screw me like this.  What the hell happened to more customer protection after the financial downturn?  Apparently nothing much has changed.

Game Plan To Fight My Insurance Company

My first instinct as a blogger was to contact Tricky Dick on Twitter and ask them for help. But just like the other five tweets I've sent over the past 12 months, nobody has ever responded. Why have a Twitter account if you don't ever respond to your customers? Their social media effort is a D-.

I then called a nice representative who said she would investigate. She did and told me to send in proof of my home floor area, which is still a pain in the ass despite having the appraisal on file somewhere.

I will send the document in and tell them to credit my account back for the two months  overcharge. I will then ask them to reimburse three hours of my time and stress dealing with this bullshit valued at $500/hour, or $1,500 total.

If they do not give me something close to $1,500 credit, I will withdraw hundreds of thousands in cash deposits. Then I may shut all my insurance product accounts. If they keep me as a happy customer, they will probably get hundreds of thousands in deposits over the next 10 years.  If not, I walk. I will vote with my money.

So Disappointed In My Home Insurance Company

What makes this situation worse is that Tricky Dick is a great company 99% of the time. Their customer service is excellent and their rates for CDs and insurance products are competitive. Every time I talk to someone there, they are very helpful.

It's too bad a black sheep in the home insurance department at Tricky Dick convinced the home inspector to over appraise my home by 50% to make more money. To over appraise by 10-20% is reasonable, but by 50% is absolute hogwash.

Tricky Dick, I know you will never get back to me online. Just know that it's not good to scam your customers, especially ones that have been loyal customers for two decades and who have a blog. Re-instill the faith I've had in you guys for all these years and make it right.

After sending in my recent home appraisal, telling me it will take two weeks to have your corrupt home inspection department look into it is now wasting your company's time and money. Just do the right thing and stop screwing around!


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How Insurance Companies And Appraisers Scam Their Customers is a FS original post.

78 thoughts on “How Insurance Companies And Appraisers Scam Their Customers”

  1. Brian Eargle

    I had serious and dangerous surgery in 2018 that coincided with my house insurance renewal date. Therefore, I overlooked paying South Carolina Farm Bureau the $549.50 annual premium.

    I didn’t receive any more renewal notices, and only 3 1/2 years later did I discover that I was no longer insured. I recently renewed the policy for half a year ($392.50), only to receive a surprise bill 9 weeks later for $382.50, making the premium for six months $775 and for one year, $1549.50, exactly $1000 more per year than I was paying two and a half years ago, or 2.81 times as much as I was paying then.

    South Carolina has usury laws against charging usurious interest (30% per year or more) on loans, excluding payday loans. There should be equivalent laws against usury on insurance premiums, and especially against usury on periodic increases of insurance premiums. Other insurance companies have been less than forthcoming and transparent about their premiums. I must write a letter today to the Director of Appraisal Inspectors at the
    South Carolina Farm Bureau Insurance Co.
    724 Knox Abbott Dr.
    Cayce, SC 29033.

    1. Brian Eargle

      I have filed no claims against my house insurance with SCFB Ins in the past 30 years or so (?).

    2. Tyranny Nevermore

      Yes, the scams have always been there, but have since gotten worse. Now you get letters stating, “hmm you have not pruned your tree branches near the house. Give us a call so we can make sure to continue coverage, when you trim them.” Or something to that effect. This type of letter we got in NY without a mortgage on the house.. they do want to control your home, your land, etc.. But after all, we are just tenants anyway.. yep, you think you “own” it, even when you do not have a mortage, but you only have “title” to your land, not a land patent.. Those were done away with AFTER we left Great Britian, and lost the republic, to a “democracy.” You just pay the rent, ie taxes, and the insurance, ie another tax, and if you don’t, the county, or school district, or township, will put a lien on your property.. you only rent.. you only rent. If you truly owned, nobody, no matter what, could take away your property, ever.. Want to fix up your place? gotta PAY A TAX to get a permit.. and who benefits when you do fix up your house with the permit? The GOVERNENT>> the insurance companies, because your VALUE goes up.. they benefit for FREE// and the banks benefit if you have a mortage and put in sweat equity.. Its all a loop scam, and your not allowed to play…

  2. Insurance companies are overcharging a high percentage of home owners by double or more by refusing to provide market value insurance. A large percentage of homes built 100 years ago in urban or high density suburban areas sell for a fourth or less of replacement cost. I paid $21,000 for my home but the lowest policy I can purchase is a replacement cost coverage of $200,000!!!! All the arguments they provide why i need replacement cost instead of market value coverage are nonsense. First, if this house is destroyed, for less than $40,000, i can buy another that is much nicer within two miles and move in within one week. Second, it should be my business how much coverage I want as long as the payout covers the mortgage and cleanup. They are not concerned that policy holders may not have enough money to put their lives back together. They are interested in screwing everybody they can. They will not use market value to compute the premiums because that would cost them hundreds of billions of dollars in premiums.

  3. rachel frampton

    My mother wanted to hire an appraiser for the estate that she’s planning to purchase. We’ll keep in mind to check the latest mortgage rates online through the lending tree. I hope we’ll be able to find an appraiser that can help my mom out.

  4. Charlie Ferguson

    So funny I found this.
    So I’ve been a member of USAA for 36 years. I’ve owned a few homes, had auto insurance with them for decades.

    Recently, I got an email stating for no apparent reason that they want to send some third party into my home to make sure “I am not under-insured” and while here will make sure to ensure that other “perils” that “could be a problem” are observed and let me know how to protect myself.

    Huh? I’ve been in this house 3.5 years. While it is older, a HUD piece of s*it , but that’s how I roll. I buy a HUD, live in it and fix it up, then sell for a tidy profit.

    I’ve been in new home construction for 35 + years and been a Superintendent for 15 of those.

    I told USAA that the guy that called said he was not bonded. I also told them unless you can send someone with more knowledge of homes than I have, I really do not need to be informed of new home prices as to construction costs, really, it’s what I do.

    Long story short, 2 – 45+ minute phone conversations and NEITHER the agent nor her manager could direct me to anything I signed that says “sure, send some ass-clown into my house whenever you want to snoop through my personal belongings” clause, paragraph, page, declarations, etc…
    I demanded of “Keisha” to escalate. She informed me several times it would not change so no need to. Flatly refused.

    USAA USED to be a reputable company. They are liars (personal experience) cheats and basically no different than a night-time burglar

    Oh! Keisha did inform me that the state legislator allows for this invasion of privacy.

    Again, to clarify, no home claims, ever. No late or slow or missed premiums, ever..
    USAA has sunk to the despicable level of common criminality.

    1. I work for a well-known insurance company and can tell you they very much do have bogus charges on your home policy! Call your agent and have them explain “Loss Assessment” as an example. It’s put on every policy but can only be used if you have an HOA. Or the fact they “extend coverage to other structures”. Let’s say you have an attached garage and no sheds or outbuildings…which is what that covers. You are still getting charged for it. Same goes for grave markers and fire dept charges. If more people would stand up yo this and start by complaining to the company (not the agent, they can’t control that) then to the department of insurance, you will make a HUGE difference! I honestly love my job but hate the lies and scams from the companies!

    2. Class Action Suit.
      Insurance Companies are invading people’s privacy and taking away our constitutional rights. Plus they are determining what your house should look like.

      1. Kris Spencer

        My company wants to send someone out to snoop around when I’m not home. They claim they do not “control” them as the nat’l company does all that and they don’t make appts. They want to make sure my 10 year old house doesn’t have any problems. I don’t trust them. I think it’s a bogus scam since the “inspector” is not independent from the agency. They surely ought to be. And they claim that it says on my policy that I have to allow this intrusion of privacy. If I don’t allow the guy on my property, then they will not insure me.

    3. Thanks for sharing your situation. Well, the insurance gotta make money off us somehow! I still like USAA’s service a lot. But I wonder if we consumers can gain more choices going forward.

  5. Had something similar happen to me. Back around 2008, my agent called and said that he could get me a lot more insurance for about the same amount, because I live in a “Preferred Area.” So, I allowed him to come for a visit. He said, “Ooh, you have a custom kitchen,” and proceeded to document that among other things. That “custom kitchen” was something I tiled myself, so it didn’t cost that much. He then said that he could get me almost double the amount of insurance for only $40 more per year. I was fine with that, but after a couple of years, my premium skyrocketed. I now pay double what I paid in 2008. I now realize that he slithered his way into my house in order to find reasons to justify going up on my premium. If they call and act as if they are going to offer you more insurance for the same amount of money, just say, “No”.

  6. I have a home in Northern Nevada that is insured by a very popular military member insurance company based in San Antonio, Texas that has been trying to conduct an interior and exterior inspection on my home for years. I received the letter and multiple phone calls trying to get me to schedule an inspection. Tonight it was National Home Inspection Services (559-435-1199) calling on behalf of the Company. Each time I politely refuse, stating that I cannot travel from the East Coast to the West Coast and disrupt my tenants for a 2-3 hour basement, crawl space, attic, interior, exterior inspection by a 3rd party independent home inspection company. Nor will I allow a home inspector to conduct such an inspection on my property without being present. I have owned this home for more than 15 years; it was built in 1980. It has been insured with this company since I purchased it. I also own several more properties in other states (also insured by the same company) and have yet to receive a request for this same “service” on any of my other properties. As such, I am highly suspect of their intentions and, as indicated others, believe they will demand I complete certain repairs or threaten to drop me, while increasing my insurance premiums (which they routinely do anyway) following an inspection. I will continue to refuse the inspection requests by a third party out-sourced independent home inspection company representing the insurance company’s interest and not my own.

  7. Feeling scammed

    We’ve been loyal customers of this particular branch of State Farm for auto insurance for 20+ years. Recently we moved our homeowners, life, and business insurance to them as well. Prior to moving our business insurance to State Farm, our rates were being increased through another company so we decided to shop around. We provided all of the requested info to our agent at State Farm and several other insurers. State Farm came back with a very reasonable quote that was less than the others but not by huge margins, so we went with SF. A year later and our audit was completed. We then get a bill in the mail for $1100. After many calls and emails we come to find out that the gal who provided our quote didn’t know her own company’s policy about adding $23,000 in payroll for the owner. So, her mistake is costing us an additional $1100 for the year that has already passed – no claims, no losses, no increase in payroll. Our payroll did not increase. Nothing about this last year was different than the year before. If they had given us an accurate quote up front we would not have gone with SF as that would have been nearly $100 more per month. She admitted to making a mistake and admitted she did not know about this policy. So why do I have to pay $1100 for a mistake State Farm made when we provided them the exact info they requested and we didn’t have any changes from one year to the next? Do we have any recourse in trying to get them to cover this amount or fighting it legally? It feels as though they baited and switched us. How is this ok? Is this insurance fraud? Thanks in advance.

  8. You are ONLY required to insure up to 80% of Total Cost Replacement Value. If your insurance company says CRV is 300,000 you only have to insure 240,000. After talking to two different AMICA Insurance representative, one finally told me the 80% rule. AMICA is supposed to be one the best insurance companies in the U.S. but they want to leave their customers in the dark so they can increase their bottom-line, just like all the others.

  9. My insurance company has quietly charged me an “age of roof” surcharge of 25% of my premium since we bought this house 3 years ago. Even though I have always told them the roof was put on in 2010, they claim the roof is as old as my house, which was built in 1990. Now that I’ve caught the mistake and attempted to rectify it by giving them exactly what they asked for (a signed note from a licensed contractor on his company’s letterhead stating the age of the roof), they now claim that they need the contractor to state the exact year that the roof was put on. Impossible. I simply told the woman I was on the phone with that I would be looking for a new insurance company. She replied that if I could send her pictures of the roof, she might get her supervisor to approve it. I will do this tomorrow, but if they pull any more shenanigans, I’m done, and I’m also reporting them to the state bureau of consumer affairs–or its equivalent.

  10. Jim Marchman

    Interesting discussion, thank you for posting. I am an insurance field inspector and I find the commentors’ experiences interesting. In fact, I had my insurance cancelled because of a missing handrail on the back deck and that the insurance company decided that my roof was too old. When I am performing inspections, in this case residential, I am looking for the most obvious things: missing handrails, concrete that has heaved and is now a trip/fall hazard, and limbs that overhang the roof. There are plenty of other issues but these are most common. I am an independent contractor who DOES NOT work for any insurance company. I work for larger inspection companies whose clients are the underwriters. I get paid a flat rate for the inspection whether the house is perfect or falling down. I don’t make more money for finding fault with a property. I am giving only the most basic of information when I am assigned an inspection. I usually can’t tell you if your policy is for liability or property, I simply don’t know nor do I care because the coverage type and amounts do not affect my work. Samurai, it sounds like you had a “high value inspection” performed where the quality of the materials and belongings in the house may be considered. These are a tiny part of the insurance inspection business and the few that I have performed have been in homes of significant higher value than 99.99% of other houses. The word “appraiser” comes up frequently in the conversation but it doesn’t sound like that inspector was an appraiser or necessarily an employee of the insurance company. The inspector’s job is to give an honest and unbiased statement of what he/she observes and provide photos to back that up. Independent inspectors such as myself do not have any input other than to witness and document what is there. A certified home inspector would carry the responsibility of judging the mechanical and (truly) structural integrity of the house and that is an entirely different animal.

  11. Interesting experience. I’ve actually had the opposite problem happen on a few recent apartment purchases when setting up the insurance. On two recent cases the coverage amount seemed low. When I questioned the amounts I got some explanation about keeping premiums low, and was supplied a $/sq.ft to construct that was appropriate in Arakansas, but not the bay area.
    The problem i have with this, is when something bad happens and you need to call on your insurance company to rebuild, the coverage is not enough. If this occurs, it seems to be negating the whole reason apartment owners pay premiums.
    On both occasions, raising the coverage amount to the appropriate level only raised the premium by a very small %. Seems like a small price to pay to be adequately covered. One last comment, don’t forget to check on your coverage amounts over time. If construction costs or values rise it’s good to be on the ball so that proper coverage is in place.
    Really Enjoy your blog.

  12. John Vincent Gomez-Iglesias

    Mr. Samurai:
    Concerning you and your friends impressions of ‘Appraisers’ you wrote, ‘They basically said home appraisers/inspectors are henchmen used to enrich the banks and insurance companies. With the banks, home appraisers manipulate the value higher so that a seller can sell to the buyer, even if the value is lower than reality. If a home does not appraise for what the buyer wants to pay, no transaction happens and nobody gets paid.’
    This may be so with bad appraisers, and appraiser mills (many have been arrested & kicked out of the field, and rightfully so), but this is not true and is insulting. Some of us are career appraisers, we love our business, and we follow every letter of the law. ‘We’ get paid up front, and we don’t care what the properties appraise for. That is why we are impartial to the results, as we only report what we see is happening within the market. Good appraisers do not make up numbers, we support everything we do and write, as well as keep detailed records of where and when we collected our information. Just like ‘bad appraiser’ do not because they can’t. It’s impossible, so they go to jail.
    There has been a lot of fraud over the last few years, but not exclusively in the appraising arena, but with realtors, mortgage brokers, banks and yes, insurance companies. Just ask your ‘real estate’ friend.
    You would be very surprised how many banks and lending organizations hate many appraisers/appraisal companies because of just the opposite. We kill many deals. And it’s my ass in the firing line if I overprice a property and then there’s a problem with the loan. Not theirs. Why do you think it’s mandatory that appraisers carry a minimum of $2 Million dollars insurance? Yeah, in case we make unintended errors (we are human, ya know?) But mortgage brokers and realtors don’t need insurance in case they lie or screw up. They made their money… which is a lot more than we make, fyi. People love to blame the appraisers, but I honestly tell you that is not the case. Oh, and there are many insurance companies out there that will not work or send us business because we don’t ‘play ball’ with them.
    There are bad apples in every field and industry, Mr. Financial Samurai. As I am sure you could attest that there are bad bloggers. I think that it is quite unfair and improper that a respected journalist (blogger) as yourself would inform all your readers that all appraisers are ‘henchmen’ for big corporate america… especially when some of us readers & followers of your blog are/were real estate appraisers.

    John Vincent Gomez-Iglesias
    Former Florida Real Estate Appraiser

    1. John,

      You are right. Not all appraisers are bad. This is the story of my own experience with a very lazy, bad appraiser who didn’t do his due diligence and charged the bank and myself an arm and a leg for minutes of work.

      I also agree with you regarding many appraisers killing deals b/c the appraised value is not high enough.

      Thanks for your perspective. What I’d like people to come away with is an idea of how the system works and all the moving parts. Buyers and sellers beware.


      1. I’m not the type to generalize but… I’m wondering if anything has changed in the last five or six years. My mother bought a house in 2005. The realtor knew the appraiser, mortgage broker, and the insurance inspector. The insurance inspector failed to find the a long list of obvious problems with the house (including that it had no final inspection from the building dept.). Long story short, Mom paid top dollar for a house that a Money Pit, just like the movie. Electric, plumbing, and a new roof. She ended up so underwater she had to just walk away. So much for retiring.
        Have any laws been passed since then to prevent this from happening?
        old youtube vid:

        93,000 FBI suspicious activity reports in 2007

        Cuomo’s 2007 probe – fruitless

        And, yes, it is fraud:

        1. Mr Miles you are confusing home inspection and insurance inspection. Insurance companies don’t insure, with a few exceptions, the “mechanical” parts of the dwelling. They don’t inspect in detail your entire plumbing and electrical system. They are only interested in the structure. Now, they do want to know if there are obvious problems that may cause a loss, but the city inspections department regulates electric and plumbing, etc. installation and repair. Insurance is for sudden and unexpected loss protection and not age and wear. Though age a wear are highly related to loss and considered, they are not totally an underwriting show-stopper. So, the dwelling may be insurable while some repairs are being made.

  13. Just wanted to mention another trick up home insurance companies sleeves these days. This has now happened to me three times: the company “approves” insurance pending inspection. Charges you for the full policy up front – let’s say $400 for the year, which comes out to $33 a month. They diddle around for about a month and a half until your 30 day cancellation grace period expires, then tell you you’re not actually approved for some hare brained reason. No guardrail on the back stoop, no smoke detector in the linen closet, no deadbolt on the rabbit coop. Annoying enough to have this horse**** hanging over your head, but insult to injury, they then keep, shall we say, $100 of your payment. Extrapolated, this makes the insurance you’re paying 50% more than you were quoted, an amount you’d never have agreed to in the first place. The last company, let’s call them Ameriprise – let’s, as that’s their name – didn’t even send a cancellation notice or any explanation, I received a mysterious credit to my card, and had to call them find out I had no insurance (and paid double for the 45 days I actually had a policy.) Stellar, thank you so much Progressive for luring me away from a perfectly decent insurance policy with someone else and leaving me high and dry.

  14. Yeah, I had a bad experience with Pacific Casualty & General Insurance Limited. My shipment had over 18 damaged items of varying value. They made up an arbitrary claim that I had to claim in 15 days (not in the documents), but their agent gave me the wrong insurance company name and address so that they would delay in responding and then scam me stating that I was too late to make my claim.

    First they want high premiums, then damage deposit, then they rake you over the coals with increased premiums if you make a claim. What a scamming industry!!!

  15. We live in the western suburbs of Chicagoland, and currently pay just under $700 a year in insurance. According to the renewal policy I just received, Coverage A is listed at $234,000. We are selling this house for $225k, so I agree that number sounds right on. We are purchasing a new to us home (built in 1905) in a far, far far south suburb (if you can even call it that), for $176k, and the cheapest policy I’ve found so far has Coverage A of $307k, and the yearly policy cost is $1236. I had a quote of $1800+ a year with a replacement value of $494k!!!!!! Of course I’m shocked, and as I ask more questions, I find out all about their “sliding” scale, that as the replacement value goes up, so do my other coverage – for instance, my current belongings, which I am moving to the new home, are currently insured up $117k, at the new house, those same belongings are now valued at $324k – WHAT????? I guess during the move they’ll go through a solid gold coating process!!! And here’s my favorite – currently, if our home where to need repair or be rebuilt, and we could not live there, the ins co would pay up to $46800 so we could live somewhere else during construction. The new policy will cover us up to $122k!!! That’s ~3x the other amount – I asked the ins co guy was it typical to buy the entire hotel for a year so they’re clients could live it up – he didn’t laugh!!! Seriously!!!! Its one thing for the replacement value of a home to go up, but this sliding scale is a joke! I’m pretty sure my 3 yo flat screne tv has not gone up in value, and that my craigslist purchase bedroom set has not tripled in value! This is such a scam, and so many people have no idea, they just get a few quotes, pick the cheapest, figure its the best they’ll get and never ask questions – what can we do????

    1. My goodness! All you good folks don’t have a clue how property and casualty insurance works. Including you Sam. You would serve your readers better by really understanding and providing real information based on insurance law and reasoning rather than emotional “us vs them” attitudes. The insurance industry is one of the most heavily regulated industries. Is it perfect? No. But misinformation and emotional blogging only makes emotion the basis for decision making.

      1. Then feel free to EXPLAIN how it works instead.

        I’ve shared exactly my story of how collusive and sketchy things are based on my experience, why don’t you share, help your industry, and teach us how things work.

  16. Thomas from Hot and Humid Tampa

    So what happened, how did it end? Did they lower the premium? Did you get credit/refund for your time and effort?

  17. @Jerry- sorry to burst your bubble…

    USAA cancelled my insurance policy suddenly for no apparent reason. I say suddenly because they never sent us notice until it was already cancelled. After several phone calls and countless hours on the phone my hubby got one associate to admit that they MEANT to send notice and have no record of actually sending notice of cancellation. This has resulted in a “gap” in our homeowners insurance timeline, which means we are virtually uninsurable except by a few companies at an astronomical premium.

    I plan to come at these people full throttle from all angles. I will be phoning them every day, perhaps several times a day. I will also file formal complaints with my state comsumer protection agency and the better business bureau. I further plan to start a website, facebook page, twitter account, and you tube account to share my experience with other consumers. I will not stop until I have had this matter resolved to my satistfaction. I can’t afford a lawyer… but they don’t know that. I think for a couple hundred dollars I could get a lawyer to draft a threatening letter on letterhead though.

    If anyone can think of anything else I can possibly do to make USAA say “uncle” for their possibly illegal screw-up let me know.

    1. Let me no your website cause I am fighting with the cause they sent a insurance Adjuster out and want to attach a rider on to my policy for new shingles on my house what a scam and this is american family Ins Jaime

  18. Insurance companies are the biggest scam of the last two centuries…Think of it as the biggest most organized pyramid scheme ever constructed…And all us suckers are forced to support them. These billion dollar companies are just sitting back and counting their money and laughing at us for being so weak to allowing ourselves to give in to such a scam.

  19. I & 2 cousins inherited property from my aunt. We had to change insurance companies, but kept the same dwelling coverage amount. The premium was paid and a new policy was issued. The new insurance company just informed us they consider the house ‘overinsured’ and want to decrease the coverage from $152,000 to $92,000. That seems like quite a drop, and I find it hard to believe we could build a comparable house for the lower amount. Not sure what their strategy is…

  20. Companies put so much time and effort into “customer loyalty” and they KNOW that it’s cheaper to keep a current customer than to acquire a new one, and yet they’re still not to be trusted, since they’ll take a chance to gain a profit.

    In this case for example, they are probably offering dirt cheap premiums to new customers shopping around, in order to compete. For you, they increased your payment hoping you wouldn’t notice. Then they made it tough to lower, hoping you wouldn’t go through the steps. Since you already know some good things about them, and it’s a pain to switch, they probably figure that they can still keep a small increase in your premium. In comparison to the HUGE increase they wanted to give you, a smaller increase will now seem more reasonable to you, the client (theoretically.)

    Really, they should have to drop your rate in order to keep you, but I don’t think that’s how this will work out.

  21. Buddhist Proverbs

    Trust your best Friend

    Beware your best Friend

    Especially if there name is Friends Provident

  22. I have filed an insurance claim on my roof. Every home on my block has received a complete new roof. My insurance company “Farmers” says they do not have to give me a new roof and will only pay for the shingles that are damaged. I’ve requested a new adjuster and have heard nothing yet.
    What should I do?

    1. Fix the roof, get another insurance company and CONTINUE to tell EVERYONE you know. I was considering switching to Farmers’s but not now.

      Thanks for the warning.

      Hope you get good coverage at the right price.

      1. In the end we all have to wake up and pay full attention to our bills. When one doubles. Do something about it. I understand the many frustrations people feel. When your claim is not paid, contact your individual Insurance Dept within your State. They will help. But as for pricing. It’s more of a re insurer issues. Your insurance companies rates are based on the re insurers rates. Nothing more. All rates are approved by your States, “Financial Services Dept.” Chief Financial Officer. So your State Government is well aware of the reasons for the rate increase and has approved it. I’m a independent insurance agency owner. There is no words for the remorse we independents feel when we fail our clients. To not feel remorse is the real issue. Recommendation, realize you are one person with one home. If you care about your agent. Pick up the phone and call them. If not, just move every three years. I can promise you- loyalty will prevail in the end. People either care or they do not. I personally care.

  23. Sunil from The Extra Money Blog

    forgot – please share lessons learned/what worked so the rest of us can bite back

  24. Sunil from The Extra Money Blog

    just come out and say the name . . . i’ll sign the petition with a blind fold. these “business practices” make me SICK

  25. I know the company since I stalk you on Twitter, but why not just call them out. You aren’t disparaging them other than saying they may have F’ed up…then they can fix it

  26. Money Reasons

    Oddly enough, I’m been getting quotes on my house insurance for the past few weeks.

    I’m thinking of doing one company shopping. Where like you have done, buy all my insurance thru one company to get the combined discounts. I wonder if all insurance companies are going this route…

    I’ll be looking forward to the followup blog on what happened! Good luck, I think they will cave in your case (at least if they are smart) :)

  27. @Buck Inspire
    Definitely hard to trust a a company which jacks you like this. Very disappointing.

    @The College Investor
    I’m writing a follow up post. As I said, the company is good 99% of the time. I don’t feel one corrupt home inspector should warrant I rake the company over the coals. Citibank’s move was very weak though, and they have many issues, so I wasn’t gun shy.

    @Little House
    Looks like they are working to lower it, but not as much as I liked. It’ll be retroactive. Thx.

    Can’t comment, if that’s a hint!

    @Darwin’s Money
    Wasting time is really the biggest issue. Spending hours on the phone and trading e-mails. I want my time back!

    I think i will def shop around, but leave my money earning 4.2% there. It’s a good rate.

  28. That really stinks. Hopefully they will come back and make peace with you by refunding most of your money. If not, walk away quickly! And don’t forget to write a nice little letter to their CEO explaining that you’ve been a great customer for 20 years (possibly referring others by word of mouth) and now are disappointed in their service. Stir up a little competition and all of a sudden they bend over backwards to please you. Good luck!

  29. I’m so curious to hear who it is, too. I’ve loved my insurance company, USAA. They’ve been great to us. But, I’d love to hear who yours is…It may lead others to take a second look at their policies.

  30. Darwin's Money

    So typical; I hate when companies waste my time. I had the company that formed my LLC for me keep sending me letters a year later that I had to renew some stupid registered agent service even though I could do act as one myself. They eventually threatened me with collections even though I said to cancel all affiliations with them. total punks! Companies pull some BS stuff and evidently don’t care about their reputations.

  31. Sam, When will you come clean on the company name? Just curious as I’m sure all your readers are. And what’s the use of a blog for a weapon, if you aren’t using real ammunition? Are you just waiting to see if they follow through?

    I gave a company Kudos (Hilton Garden Inns) on my blog for great service recently. I do think legitimate praise, and criticism are both equally valuable.

    1. The case is still in progress. It all depends on the outcome. I got a letter from them today finally after two weeks saying that have adjusted my house’s squarefootage size, and the rebuild cost down… but not as much as the original cost. I’m working through the details now.

      Feel free to check my Twitter stream if you want to be Dr. Watson instead!

  32. I thought about installing gold floors in my place but decided against it as diamond encrusted ones look so much better…jk :) That sux they are creating so much hassle and didn’t even send you a notification!! Luckily I haven’t had any scammy issues with insurance (yet) but I have with banks charging fees they shouldn’t have. I watch my statements like a hawk and make sure I know what every transaction is & challenge anything fishy.

  33. They pulled that one on use 3-4 years back. You have to watch these guys like a hawk and check your statements every year. I called them and gave them the correct sq. footage and that was all it took. I didn’t have to send in an appraisal.

  34. Wow, I guess it was a good thing in the long run that you cancelled that credit card, even though it was a pain.

    I just got informed that my house is suddenly in a flood zone (one of 2 houses in the entire neighborhood, go figure). I now have to go fight that. The mortgage bank told us that they would be taking a flood insurance policy out on my house if we didn’t and it could cost 2400/year.

    All this stuff is so frustrating!

    1. That’s just bull hanky crap!! And the worst is you are guilty and have to prove you aren’t in the flood zone. Thy don’t have to prove jack to you, which is their attitude.

      Be vigilant! $2,400 a year more in premiums is NOT chump change !

  35. I hope you do choose to move your money from the company. Voting with your money is the only way to make sure that you do have some power in the marketplace.

    I wish more people would realize that, and decide to use the power that they do have.

  36. I never trust people like that do act in your own best interest (Or even in their own long term best interest), so I basically have 0 loyalty to any company – air carrier, bank or whatever. If I find a lower price, I’ll take it. Not only will it save me money, but it can keep my from getting screwed by them in the future. No one wants to piss off a brand new customer, so they screw the guy who has been there quite a while, hoping he wont notice and bolt.
    As the great Jay-Z Says “The label didnt drop me, I dropped them”.
    Good luck resolving this sam!

    1. “No one wants to piss off a brand new customer, so they screw the guy who has been there quite a while, hoping he wont notice and bolt.”

      I think you are right! A risky game, given the RELATIVE easy it is to transfer policies around.

    2. Rita Sanders

      Actually, and I will not call them tricky dick I will name them outright Nationwide has no problems with screwing new customers. This is not about homeowners insurance but car insurance where I spent six months earning a 21% discount and at my first renewal they jacked up my rates with what they called a general area rate increase and all I got in the way of a discount was $0.50 at my very first renewal I never got to enjoy my discount that I earned for even one day. This type of action by insurance companies should be illegal it is certainly dirty and underhanded. Needless to say I have changed insurance companies and will continue to do so periodically because I no longer trust any of them.

      1. I just heard the term “general area rate increase,” as you mentioned.. or something along those lines. Insurance lady basically said that it’s set by the government according to how many accidents occur in your area.

        I still don’t get why these companies are called “insurance companies.” It’s more like when you have an accident or something goes wrong, you pay the deductible, your insurance rates go through the roof, and they never lose out on any money and you end up paying back for any damages on either side. I know they gotta make money but in that case they should call themselves, “PayMeToChargeYouForAccidents Companies.”

  37. Sam,

    It’s because they know you and your wife are pure gold :-)

    Pull your policy and shop around. Keep your money in their CD’s though- drawing 5% when 10 year treasuries are below 3% is a nice kick in their teeth.


    1. Yes, that is a good idea. Although, I’m not quite getting 5% in CDs from them. That would be huge! 4.2% locked in though, which I’m happy with.

      I think I very well will look at other insurance policies online at least and see how things stack up. There’s a lot of work needed i.e. they need an inspection I’m assuming… but maybe not b/c I never remember getting an inspection the first year my house was insured.

  38. Man that sucks. I’ll be interested to see if the company reimburses your time at $500/hr. It can’t hurt to ask, but I’m doubtful they’ll do it. Let us know how it goes!

  39. savvysavingbytes

    Unfortunately your story tallies up with many other Tricky Dick insurance stories I’ve heard in the past. And to think those shysters could have kept on overcharging you till dooms day had you not contacted them on another matter. So at least you were lucky to cut their scheme off at the pass.

    Will be curious to hear the outcome.

  40. Sorry to hear that Sam! Maybe the door knobs are made of crystal! Are you sure they are not?! :)

    I was with a similar insurance company. One fine morning they jacked up the premium to almost double. Shopped around and got a better deal, switched. Called them to tell them about the switch. NOW they wanted me back! Apparently since I was with them for so long, I was a ‘diamond’ member with lots of additional perks and lower premium. But they never bothered to send me that letter!

    Anyway they agreed to reduce the premiums ever further if I switched back. I did, but now I don’t trust them as much and always wary of what new tricks they might pull.

    Such companies leave a bad taste in your mouth.

    1. Well, actually, my doorknobs ARE made of crystal, but they aren’t made of DIAMONDS like they might think! lol.

      How can our insurance co just JACK up your premium almost 100%? This is so ridiculous, I can’t stand it. How do companies get away with this?!

      1. My wife and I have the same issues with allstate .just out of the blue they raised our rate from $315.00 a month to over $700.00. What a joke. We have no tickets no claims and a perfect driving record. It really makes me wonder how these a..holes get away what there doing.

        1. Melissa Stefanski

          I just recently noticed ours has been raised 12% every year for the last 8 yrs! They have me insuranced for roughly 75% more than its worth (house w/land) and I only found this out due to the one only ever claim. Somehow our estimate vs. what my “closed ” online is $1711.15 different. Still waiting for a transparent response. The depriciated amount if recovered for Dwelling A and Other Structures B plus the damaged tree equals that exactly!!

    2. Change insurance companies like you change your pants. Never go beyond 3 yrs. with them. They are like the oil & gas business. DIRTY-DIRTY-DIRTY! It’s up to you
      to do your due diligence. Play their game against them by shopping for smarter coverage. Charles J. Givens had some great books that still offer good advice today. Some of the terms may have changed, but much of his advice is still useful. Google for the books. You wouldn’t believe the horror stories I’ve heard about some folks trying to make a claim. Good honest folks wanting to get back on track with life.

      1. remember if your ins co sells you a policy that is 50 % over actual value .when you have a claim to file they will call out there lawyers and charge you with fraud. . How is this my son was hit from behind in his car the driver was ticketed ,but my son is disabled for the rest of his life. the ins company refused to pay him lost wages because he was self employed. then the would not pay out any disability payments. he had to hire a lawyer in 2011 he just got a settlement in 2017 from S.S.D.I for about $1350.00 a month the ins co. only paid medical bills and a total of $3000.00 for his injuries. the government us will have to pay doctors medications ect .for ever. THE INS,CO.PAID OUT PEANUTS. MEANWHILE MY SON HAS 3 KIDS TO RAISE ON $1350.00 A MONTH.IT TOOK 6 YEARS TO GET THE SETTLEMENT,THAT MADE HIM GO BANKRUPT.THE WHOLE INSURANCE SYSTEM IS A FRAUD SCAM RIP OFF.IT NEED TO BE COMPLETELY REVISED

      2. Problem here is that they set and break bread with each other study the policies and compare charges and realign to up charge the consumer. It works great, quit one and go to other….they see what you have been paying and hold firm or give you a better rate and conceal the coverage’s. It’s a lost cause, only way to defeat it is ALL CANCEL and then premiums will be 20% what they were. Government is tied in skimming the profits off the top and providing encouragement to the big insurance companies. Then when you have a claim, they go into recovery mode and increase the premium. You wouldn’t believe the stuff they have. Airplanes, corporate marble buildings with private golf courses, fleet cars for executives, new every year. Big salaries and flex time, floors of lawyers at 150k each, free travel for seminar’s, lavish accommodations, you would fall over if you could see it all in action.

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