Switched Insurer, they jacked up premium after inspection

8 Replies

I changed my MF's insurance to another company, who quoted a better premium than what my previous insurer was going to be at.  Now after inspection, they raised the premium almost 25%.  The only notes I see on the property inspection are that the inspector changed the property details from masonry to frame, and 1 story to 2 story.   

Now I never would have told the broker that my property was masonry or only 1 story, so it looks like he put in the wrong data when preparing his quotes.

Can I change insurers again after changing ~2 months ago?  I would assume so but I've never changed so frequently before.  Any problems with doing that?

I’d like to hear responses on this as well. I’ve had recent issues w insurance premiums and wonder if it would be better to find more affordable options.

Ryan,

My first caution is to not let the policy cancel.  Most applications will ask if the prior policy cancelled and many companies will charge more if there is a lapse in coverage.   Two things are probably factoring into the increase:

1. Frame homes have a higher fire rate than Brick ones

2. The change to a 2 story may make the rebuilding (Replacement cost) higher causing the limits to be higher on the policy

Although it may be an honest mistake, for your own piece of mind you may want to go back to your prior agent or shop the policy around to multiple agents. 

@John Mocker Thanks John.  I will most definitely keep the current policy until I replace it.  I will never have it lapse in coverage.  

I have reached out to my previous broker to see about going back to the policy I had with him.  I just wasn't sure if there were any issues with shopping for a new policy again 2 months after having the current one put into place.

Are there any negatives against us for shopping property insurance again so soon?

Ryan,

If there is a problem, it would be company specific.  I have not heard of any of our markets that would decline it due to your situation.   If you go back to the old broker they should be able to tell you if that company will have a problem with the switch back

Hey @Ryan Moore your old agent should be able to reinstate your old policy depending on the time frame. the agent may have used information off the county auditor site which could have frame construction. I am not sure how the 2 stories did not get caught. Human error and hopefully it wont cost you any money. Like @John Mocker stated do not let your policy lapse in coverage. Best of luck.

@Ryan Moore

A lot of polices come with a 25% minimum earned endorsement on them. Which means you are subject to 25% of the premium if you cancel. As soon as you have paid that amount there usually is no cancelation after that. So three months into it you should be fine. It obviously isn’t the case with every carrier but this is extremely common. Your previous agent should be able to pick that out right away. Let me know if you need any help with it. I am an insurance broker myself and we have a program from both multi family and single family rental properties. I am located in AZ but he programs are nationwide. Good luck!!!

I asked two brokers this exact question and they both said the insurance companies will not penalize for frequent switching. Now that being said, what was their motive? It couldn't possibly be that they would make money if I switch to their plans....

I switched everything in October and had two claims on two different properties in January so you can bet I will be shopping around this October when my current insurance company jacks my rates. I guess I will find out in a few months if the brokers were telling the truth. To me it comes down to the headache. How much will I save by switching, am I getting better coverage, is it worth the hassle? If a company penalizes you for switching, choose a different company. Insurance companies are like ants, theirs tons of them. 

@Ryan Moore In your specific situation, you should not have any negative impact.  Just make sure the above story is relayed to the underwriters and they will understand.

Sounds like some inexperience from the agent.

It is possible to "Burn Out" the marketplace if you quote your account every single year.  Many times you can be going to a different agent, but those agents are sending your account to the same underwriter.  Those underwriters are not going to give you their best pricing if they think they will only write it for 1 year. 

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