Common Sense Conspiracy is normally dedicated to conspiracy theories and general news and discussion, but we are taking a timeout because a few of our most cherished readers have encouraged us to look into a matter that is becoming an increasingly common practice in the insurance industry. Here’s a quick synopsis of what happened to one of our readers.
After a particularly vicious hailstorm, this homeowner noticed some problems with his roof. There was some significant water damage from leaks, and the roof had several points that appeared to have been caused by wind or hail. In an effort to head off the problem and take initiative, this homeowner contacted a local roofing company and had a full roof inspection. The suspicions were confirmed. The roof was heavily damaged by hail. So, the homeowner went to make a claim with their homeowner’s insurance company. In this case it was HomeSite which is under the Progressive umbrella. But the story we are telling is not just limited to that company. It is happening all over America at more and more companies.
The claim was filed, but there was one problem. The deductible for wind and hail damage was $5,000. The cost to replace the roof was just a little more than that. The deductible made it completely cost-prohibitive for the homeowner to get ahead of the problem, because with that outrageous deductible, unless the roof was basically falling apart, no one in their right mind would have gone ahead in replacing it. So, the insurance company dodged the bullet and the roof is not their problem for now. So what? Well, here’s the problem. The deductible was a much more manageable $1,000 for years before HomeSite snuck in a small addendum in the last renewal period adding the new deductible of $5,000 for wind and hail damage. It was included in the back of the policy renewal information in small print so as to make it as unnoticeable as possible. Like most people across America, this homeowner didn’t reveal that renewal policy with a fine tooth comb. Instead, they reviewed the costs, expecting that there was no change in coverage in an automatically renewing policy. They were wrong. By allowing the policy to auto-renew, legally, they engaged in a contract accepting the $5,000 deductible as the new normal. And until something actually happened where they needed their insurance to come through, they had no idea.
Common Sense Conspiracy encourages all of our readers that are homeowners to check their policy renewals carefully. Read every page, top to bottom, side to side, corner to corner. Don’t let your insurance company slip a very important policy change in there somewhere unbeknownst to you. Deductibles help keep insurance rates somewhere in the neighborhood of reasonable, but when they reach this level, they are only allowing the insurance company to take your money monthly with almost no risk to themselves whatsoever. Then, when you need them, you will find that the law is most definitely not on your side.
Read those policies now. Before something happens.