Comments on: Allstate 3% Tropical Cyclone Deductible (… they MUST be kidding, right?)

By: Leslie

Leslie — Sat, 24 May 2008 05:23:44 +0000

Holy crap!! I know that post-Katrina, there was quite a time when virtually no one was writing new home owner policies anywhere in Delaware, even though we’ve never had anywhere close to a direct hit from a hurricane. Even USAA, who I’ve always used, said that they had just re-started writing policies here when we bought this house in June 2006.

Now I want to double-check our policy, to make sure that I didn’t miss something like that…

By: Anita

Anita — Sat, 26 Apr 2008 18:23:29 +0000

LOL “Insurance: If you can get it - you don’t need it.” SO TRUE!!!

Fred - we’re suffering the Katrina backlash! Our house is approximately 4200 square feet under roof and our premium with ML was $2300 per year pre-Katrina. Then we got a check for around $20,000 (post-deductible) for about $150,000 damage & loss of contents…. And now our premium effectively doubled. Yay! And like the situation modernmama is describing along the NY coastline — insurance isn’t easy to get. We’re in no position to shop around considering the policy cancellations, lack of renewals, and insurers no longer writing policies here. We live 1/2 mile from the coastline, by the way.. The rates are triple what we’re paying for folks living closer to the water down here.

By: Joanne

Joanne — Sat, 26 Apr 2008 08:24:48 +0000

An acquaintance of mine worked in insurance. He told me that 97% or so of the money an insurance company collects from premiums is paid out in claims. (I’ve never verified that statistic.) Disasters like Hurricane Katrina take a significant toll. Still, we’re talking profits in the millions.

What bothers me is that something as straightforward sounding as “insurance” is so complicated–you have to read the fine print and read it again and again to determine what, exactly, it means, and what you can reasonably expect during a crisis or disaster. (Try getting hit by an uninsured drunk driver who totals your car and sends you to the hospital to see just how helpful your insurance is. I was in the hole after that one.)

By: Sandy

Sandy — Tue, 22 Apr 2008 23:37:24 +0000

HOLY COW!!!! What a bunch of crooks!

By: Jennifer

Jennifer — Tue, 22 Apr 2008 03:19:38 +0000

Well, we have no hurricane or tropical cyclone coverage here in Colorado…

But that is quite a bit underhanded of them!

By: Fred

Fred — Mon, 21 Apr 2008 21:20:36 +0000

Kristy– what you point out is a sales tactic that I generally find offensive: “We don’t guarantee that, but you don’t need to worry about it because it will never happen to you.” This is similar to an experience I had at a car dealer recently. The dealer said: “$1000 isn’t a lot of money when you’re buying a car.” I said back: “I’m glad you feel that way, because the $1000 is important to me, and you don’t have any problem giving it up!” (OK, I didn’t actually say that … but I thought it!

modernemama– I’m speechless. $35,000 is an amazing sum. How much did they want in order to buy-down the deductible? I’m going to be looking into Travelers — my friend has had a good experience with them. Also, the company I cited above - Harleysville Mutual - I would have stayed with them based on my own experience, but they didn’t offer an Umbrella Policy. Allstate did, but required we switch all our policies to them.

Anita–You’ve just given me another company to explore. I need to check the actual declarations on the allstate policy to see if they clearly call out the $ amount on the policy itself (because they didn’t on the letter I cited above).

In any event, the number you quoted is really high compared to Maryland rates. Our homeowners on a 2300 sq. ft. house is $1250. My friend pays much less than that on a larger house with Travelers. Is your house huge???

By: Anita

Anita — Mon, 21 Apr 2008 16:07:17 +0000

I agree with you - the implications of a 3% deductible should be made much clearer on the declarations page for customers. I have actually seen people burned by this during previous hurricanes.

We don’t have Allstate. MetLife actually lists the three possible deductible/premium scenarios on a page included with the policy declarations. It includes an IF, THEN like this: IF your premium is $4952 then your Hurricane Windstorm Deductible is $2500. If your premium is $4200 then your Hurricane Windstorm Deductible is 5% ($16,400).

So you see — they include the dollar amount you’ll be looking at right next to that percentage figure. Your selected premium/deductible is printed again in the same way on the declarations page. It seems to me that is exactly how it always should be done. Now.. if only they explained concurrent clause language on that declarations page….

And yes those are real numbers. We can’t afford the $4900 premium for the lower deductible.. So the best we can do is $4200/5% deductible. Eep.

By: modernemama

modernemama — Mon, 21 Apr 2008 15:58:23 +0000

Wanna know what my hurricane deductible is? The one Allstate introduced in 2006 because that was the year we were supposed to have a severe hurricane on Long Island? Big breath….$35,000!!!!!!!!
Yes I’m still not dealing with it very well am I?
We can’t even change to State Farm because they aren’t insuring any properties within a 1000 feet on New York’s coastline, and they are canceling the policies of homeowners living within 450ft.
I’m thinking they need a new tagline:
“Insurance - if you can get it, you don’t need it”.

By: Kristy

Kristy — Mon, 21 Apr 2008 14:25:01 +0000

I have Allstate and the same type of thing happened when they dropped the Earthquake insurance. When I asked them what it cost to get this (now extra) coverage, they told me some ridiculous $$$ figure. My reply…so my house needs to be swallowed by the earth for it to be cost effective. Otherwise with this outrageous deductible, if all of my windows are shattered, I’m basically paying all of it myself. Their reply, “Well, in layman’s terms-yes!”.
They then proceeded to tell me that the chance of us having an earthquake is slim. Six months later, we feel the rumble of a 5.4, 120miles away. Doesn’t sound slim-does it.