Why Was I Charged $200 Extra for Homeowner's Insurance
March 7, 2011 11:54 AM   Subscribe

Applying for homeowner's insurance (with Geico in NY state), I was given a quote of $1761. At that point, they took my social security number, and came back and told me the premium would be $200 higher. They would not account for the difference....it was "take it or leave it". And I have a nearly perfect credit rating. Thoughts?
posted by Quisp Lover to Work & Money (13 answers total)
 
Is something missing here about why the automatic response was not 'leave it' to a flaky move like that? If they can't offer an answer to a simple question, why deal with them?

(Your title suggests you've already gone with this company?)

When I got my homeowner's insurance I spent part of a week calling and calling and calling around, and the difference in how the various companies dealt with the inquiry, and the difference in the rates offered, was astonishing. Clearly a pretty unstandardized market... There're so many providers out there that I don't know why you'd want to deal with anybody who was even a little bit lagging in customer service. Why not just thank them for their time and go elsewhere?
posted by kmennie at 12:01 PM on March 7, 2011


Response by poster: I said "no", but they have my application on file if I change my mind (which I may, because I like dealing with one company for everything - home, auto, umbrella). So the title isn't perfectly phrased, but "Why Would they Try to Charge me $200 Extra for Homeowner's Insurance" seemed like over-investment in verbiage for a slim gain in accuracy.

I'm not going to make judgements about the company based on one salesman's behavior. I'm just trying to figure out what's going on here so I can try to make a smart decision.
posted by Quisp Lover at 12:05 PM on March 7, 2011


Geico homeowners is just agencied. If you have an actual claim you'll deal with a third party. They probably are not using your credit score, but rather the data the credit agencies is supplying them that they then throw into some kind of algorithm. The weird thing to me is that he actually quoted you w/o a SSN#.
posted by JPD at 12:19 PM on March 7, 2011


I could be wrong, but most of the time the quote is based on your home's value, zip code, features of the house (fire alarms, smoke detectors, deadbolts, security system, etc.) The SSN part runs a check on you that looks at credit rating as one part, but also looks at previous claims and insurance history. Do you have any homeowners or other claims in the last 5-7 years? I'd suspect previous claim(s) to trip off a jump of $200.

I run through separate companies for different insurances mainly because the deals for having one company aren't deals. For me, Company A that gives me car insurance charges triple what Company B does for renter's insurance. Company B that gives me renter's insurance charges double Company A's car insurance. Even with their package discounts it's much better for me to have two companies.
posted by Mister Fabulous at 12:21 PM on March 7, 2011


Agreeing with Mister Fabulous. Wwhen we bought our home, the smartest thing we did was to call ALL insurance carriers. Our quotes ranged from $1200 to $3000 for the exact same coverage. Our car insurance carrier offers a discount for bundles, but it wasn't near the kind of percentage that would make going with them a smart decision.

If a company does something smarmy without explanation, just call some other companies. Call them all; get the numbers; do what makes sense.

(Seriously, my husband had a google spreadsheet. Companies were moved from the "still in the game section" to the "loser" section until we had a winner. AND It was annoying to deal with that many quotes/applications/call-backs, but well worth it.)
posted by Kronur at 12:23 PM on March 7, 2011


Slightly OT: Do you guys not have price-comparison websites that cover vast swathes of the market at once for you?
posted by turkeyphant at 12:34 PM on March 7, 2011


So we recently just got homeowners on a new house through Geico (the policy for us actually gets underwritten by Travellers). My wife and I just commented on how great Geico has been for both home and auto on the phone, very helpful there. So I think your experience is a bit of an anomaly.

But there are many factors in the quote, your credit score is likely the least important. I don't think this was related to your credit score. More likely they ran the entire package through their underwriting software which came back with a higher rate then the initial estimate. They may not get a lot of info on why it was higher or explanation of the difference. I doubt there was any malice here.
posted by bitdamaged at 12:44 PM on March 7, 2011


There is a national database of all homeowners insurance claims, shared by all insurance carriers. They looked you up by your SSN in that database, and probably found a claim from the past.
posted by miyabo at 2:36 PM on March 7, 2011


The salesman lowballed you with an expectation that by the time you gave your SSN you would be invested enough in the process to accept the new number? Or else he didn't do a very good job of quoting it in the first place, and when he went and entered the full information he got back a number higher than he had previously estimated?
posted by mrs. taters at 3:04 PM on March 7, 2011


The last I check, which was two years ago, Geico farmed their home insurance out to Travelers so you are paying their commission as well. Stick with the agencies that specialize in homeowners. Ask around your neighborhood for the most reputable agencies, call them all for a quote and don't be afraid to ask the one you feel the most comfortable with to match the lowest bid, I did that with State Farm one year and saved over $300.
posted by any major dude at 4:54 PM on March 7, 2011


With Geico (or almost any other phone-in service), hang up and call back to perhaps get someone more reasonable/intelligible/capable. I would not recommend this tactic with, say, Sprint, due to outrageous wait times. But, in my experience, Geico is a short hold. The new voice on the other end won't make anything cheaper, but they just may do a better job of explaining things.
posted by skypieces at 5:22 PM on March 7, 2011


Response by poster: Thanks, very helpful.

I've never made an insurance claim on anything ever, fwiw.
posted by Quisp Lover at 7:37 PM on March 7, 2011


Yes, definitely shop for insurance. I've had good experience with State Farm, which I went through and underground oil tank issue with, and Liberty Mutual for car insurance has been good for me.

Get your quotes and make sure they are comparable coverage. In the event you need it, you'll need it. ( a friend's house recent got struck by lightening and you have to figure in everything from alternative housing to all the house contents, to actually rebuilding)
posted by rich at 5:17 AM on March 8, 2011


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