Insurance Companies Are Getting Ready To Cause Home Owners Breach Of Contract On Their Mortgages

On Friday August 2, I received a letter in the mail from my insurance company. I immediately thought it was unusual because it was not an envelope that they typically use for correspondence. So I was curious, to say the least, what it might contain. After opening it I find a letter from my agent.

It states that due to "Natural Disasters", claims have sky rocketed over the last few years costing millions in payouts that would not have normally been paid. Due to this "Run Loss" they are left with No Choice but to raise everyone's deductables on their policies to a minimum of $1000. It went on to say how this was automatically going to happen at the end of August of this Year. They also offered the option of maintaining the lower deductible for an extra $436.82 per year.

Needless to say I was not very happy because I came to the stark realization that both my home mortgage and auto loan both have specific language in the contracts that say I am required to maintain a $500 deductible on my insurance coverage.

I called the insurance company to speak with my agent to find out what is going on.
She explained in the same manner that the letter did that the payouts were to big so they have to raise everyone’s deductible. She also said that ALL insurance companies throughout the U.S. are doing the exact same thing. She then said "What’s wrong, You will Save allot of Money?". I made it clear to her that if they were to automatically adjust my deductible to $1000 dollars that they would cause me a breach of contract on both my mortgage and my auto loan. She immediately marginalized that by saying "The Banks Have No Choice, They have to do what we say".

I told her it was Not about the insurance companies dictating to the banks, this about individuals who are going to have their contracts breached and possibly have their homes foreclosed on because of an act of stupidity and greed.

She then reiterated that I can maintain my current deductible for an additional $436.82 and then followed that up with "Well, we didn't have to send you a letter telling you, we just did that as a courtesy". I told her not to do anything on my policy and that I was going to call the bank. She said to do what you want the policy will automatically adjust in a couple of weeks.

So I call the bank. I speak to the president of the bank, which is usually who I always talk to since we have a pretty good relationship. He was completely blind sided and surprised by what I had just told him. He asked me to send him a copy of the letter, and I did. He calls me back latter to tell me that the insurance companies sure do know how to screw things up. I asked him to quickly review both the mortgage and auto contracts to be sure that I was correct in the language and his reply was "We already did, it is in there in Black and White".

I then asked him if this was going to cause any breach of contract issues and he said "Yes, Definitely So".

I told him that allot of people in the U.S. are going to have this happen automatically and most will probably never receive a letter telling them. He said that this could cause a problem for those people that don't know.

I asked him what could be done and he said "Nothing". He told me that the bank is going to append both of my contracts to the higher deductible and that I can come in sometime next week and sign them. He then told me that he is going to have to appoint a group in the bank to go through and append Everyone's Contracts to reflect the same.

I Always knew that insurance companies were a Scam, but, until Friday, I never knew just how much power they had.

So. .. . .

If you have a mortgage or Loan, you better heed this piece of friendly advise. . .. .

Check your contracts and call you insurance agent to see if this is going to cause you a Breach of Contract. Then call your bank and see if they can be adjusted. Otherwise you will have to pay allot more to maintain a lower deductible.

ETA:

This is Not about raising insurance rates. It is about raising the Deductible that you pay in the event of a claim.

In ALL cases when you raise you deductible your Premiums are CHEAPER.

The problem lies in the contract that you signed when you got a mortgage or a loan on your car.

reply to post by ShadellacZumbrum


So in other words, the insurance companies created a product knowing that they could fleece people out of money, and now because they actually had to use all of that money they have collected for years, they are sending out letters telling people to pay more?????

eh, sounds about normal for the money changers in Amerika!

So if I understand this correctly, the insurance company you are currently with no longer has a product that suits your particular needs?

reply to post by alfa1

No Not at all.

What I am saying is that If you have a mortgage and a deductible that is define to be less than $1000, when the insurance company makes that adjustment to $1000 you will be in Breach of Contract and that is grounds for Foreclosure.

reply to post by seeker1963


They are not saying top pay more.

What they are saying is that the deductible is going to be raised which, in turn DEcreases your premium.

But the problem is that if your mortgage or auto loan states specifically that you have to maintain a deductible of $500 dollars or less, then if they raise it, your contracts will be Breached.

reply to post by ShadellacZumbrum


Insurance companies are horrible. They suck money from a good share of the population in the world, then when they pay out they claim now they are going to raise everyone's rates? Nothing wrong with profits but when these companies profits are off the chart something needs to be done.

Alas they pay our leaders and they just let the pigs feed. This is what free market does without enough regulations.

reply to post by LoneGunMan


They are not raising the Rates.

They are raising the Deductible.

What State do you live in and what is the name of the insurance company?

I've not received any notice from my insurance company.

Insurance rates are usually regulated by the Insurance Commission in your State.

I would contact the attorney general to find out if this is legit.

Also, call another competing insurance company and ask them to give you a quote, without disclosing what you have heard from your current carrier and see if the quote you a $500.00 deductible policy.

Something smells fishy here.

She then reiterated that I can maintain my current deductible for an additional $436.82

That is indeed raising rates.

They are raising the rate $432.82 to keep your $500 deductible.

reply to post by Julie Washington


The Insurance company is State Farm.

She also said that ALL insurance companies are doing this. That includes ALL states.

She also said that once the deductible is adjusted to $1000 it can Never be reduced.

reply to post by Julie Washington

I would contact the attorney general to find out if this is legit.

This is Most certainly legit.

Interesting.... I have State Farm.

However, my deductible is already $1,000.

I'm going to call them Monday. My agent is a friend so I can get some reliable answers from her.

I'll report back after I've had an opportunity to talk to her.

reply to post by Julie Washington


Is the deductible defined in either your home or auto loan?

Originally posted by ShadellacZumbrum
reply to post by Julie Washington

 

The Insurance company is State Farm.

She also said that ALL insurance companies are doing this. That includes ALL states.

She also said that once the deductible is adjusted to $1000 it can Never be reduced.

Of course she said all insurance companies are doing this. If she told you just statefarm was doing it, that might lead you to finding a different insurance company. You should check with the regulating body for your state, and with other insurance companies.

Never rely on one source of information, especially for something that could cause you to lose your home.

what are you talking about? it does not cost over 400$ a year to go from 1000 to 500 dollar deduct able. I'm a licensed insurance agent and deal with numerous companies. The average difference in premium is roughly 40-50 dollars. And. the insurance company cannot change anything in your policy until the end of the policy period. (annually). You're speaking in half truths with this post. I only say that because you allegedly were told this by an agent.

Just checked my car insurance an it doubles next moth. I emailed my agent and will post updates. Hope to God this isn't true

Originally posted by ShadellacZumbrum
reply to post by Julie Washington

 

The Insurance company is State Farm.

She also said that ALL insurance companies are doing this. That includes ALL states.

She also said that once the deductible is adjusted to $1000 it can Never be reduced.

Now you're just making things up. Can never be reduced?

Where are you getting this blantantly wrong info?

Looks like rates are raising in some hard hit areas.

What State do you live in?

NC homeowners insurance rates to rise an average 7 percent

State regulators and homeowners insurance companies on Tuesday avoided what was likely to be a long, drawn-out battle by reaching a settlement that will allow overall statewide rates to increase an average 7 percent beginning July 1.
...
Under the settlement, rates will increase by as little as 1 percent in some areas of the state, and as much as 19.8 percent in some beachfront areas of coastal counties. The industry had requested an average rate increase of 17.7 percent back in October that ranged from a high of 30 percent in parts of coastal counties to a low of 1.2 percent.

Read more here: www.newsobserver.com...=cpy

Source

reply to post by DIDtm


I don’t know who you are an insurance agent for, but, maybe there is a chance that you are not up to speed.

I Most certainly would Not come on here and make this up.

There are No half truths involved.

I will tell you what, Let's just wait until tomorrow when Julie Washington Reports back after talking to her agent. Then you will be surprised and be making up all kinds of excuses why you thought this was Blatant Info.

ETA:
First I received a letter, then the agent confirmed it.

Originally posted by DIDtm

Originally posted by ShadellacZumbrum
reply to post by Julie Washington

 

The Insurance company is State Farm.

She also said that ALL insurance companies are doing this. That includes ALL states.

She also said that once the deductible is adjusted to $1000 it can Never be reduced.

Now you're just making things up. Can never be reduced?

Where are you getting this blantantly wrong info?

I'd be far more inclined to believe an anonymous stranger on the interwebs than anyone that is or was an insurance agent... if that's what they were stating they were told it's quite possible that is indeed what they were told... as to whether or not what they were told being a total crock consider the source... an insurance agent... so I'd say yeah... every word they heard probably came from a mouth smelling strongly of fecal matter...

Anyway that being said just a couple weeks ago I got my homeowners insurance bill in the mail... three weeks after if was supposedly sent and five days before it was due... the $800+ tab was not easy to cover in that time frame and luckily I came up with it but I'd imagine there are quite a few people that would not be able to in this day and age...

Plain and simple in my personal opinion insurance agents are in the same scumbag range as lawyers and debt collectors... but that's just me...