I feel the earth move under my feet...

August 30, 2007 8:42 AM

Homeowner insurance through Farmer's Insurance Group -- is this a Very Bad Idea?

My TIC partners and I took a meeting with a Farmers Insurance Group rep last night to discuss coverage for our 6-unit building in San Francisco. Seemed like a nice guy, offered the type of coverage we wanted for the price range we were looking for. It seemed like everyone was in agreement and we'd be settling the details and buying the policy later this week.

This morning I sat down at my computer, typed in Farmers Insurance Group and found the traditional This Company Sucks website. In contrast, they seem to have a great relationship with the press or very cunning PR folks. Everyone's got a beef with something, but considering the stakes I don't know quite how to process this information.

a) Is FIG truly known to be sucky by everyone but me?

b) What can be said about their recent record in paying claims, especially in California? Does anyone have personal experience to relate?

c) Is this something worth steering the HOA to another insurance provider over?

I don't want to be Chicken Little, but we do live in San Francisco and earthquakes are on everyone's mind.

posted by cior to home & garden (8 comments total)

Farmers is a good insurance provider. Better or the same as any of the other "big name" companies out there. Most people that have issues with an insurer don't understand their coverage or purchased the cheapest possible policy they could. Just make sure you request earthquake coverage as it isn't included in a basic policy. If they don't offer earthquake coverage, go somewhere else.
posted by digiFramph at 9:49 AM on August 30, 2007

And just to be clear. A six unit building is not eligible for homeowners coverage. The coverage they quoted is either a BOP, business owners policy, or a CPP, commercial package policy. You guys may also want to look in to Directors and Officers liability for your board...
posted by digiFramph at 9:52 AM on August 30, 2007

As far as I know Farmer's has a decent reputation. You will find "this company sucks" invectives against any insurance company because, in truth, they all suck somewhat.

You should shop your policy around. You may want to talk to an insurance broker who represents multiple insurers, although in truth most brokers I've spoken with seem to end up favouring one insurer.

You mentioned earthquakes; earthquake insurance in California is an entirely different thing from homeowner's policies. Most insurers don't want to write earthquake insurance at all, and in general in California if you buy earthquake insurance, you get it from CEA.
posted by Nelson at 10:33 AM on August 30, 2007

digiFramph: I was simplifying terminology and we decided against Director/Officer liability. We're a 6-unit TIC and our board = 50% of the occupants of the building. Nothing happens without all of us in alignment with the decisions being made.

Nelson: I'll check into this, I understood that the policy included earthquake coverage but it bears checking and double-checking.
posted by cior at 10:38 AM on August 30, 2007

cior, D&O exposures aren't necessarily only going to come from within the building: tenants, owners or otherwise. Just remember you live in the USA ( U sue anybody ). It's always better to have the insurance companies $500 an hour shark lawyer defending you than to have to handle it on your own, at at your own expense. Just my opinion.
posted by digiFramph at 10:59 AM on August 30, 2007

I've been insured through Farmers (auto and home) for years and years. Never had to file a single claim until one day about 10 years ago my house got broken into and thieves cleaned me out. Happened on a weekend but best I can remember, Farmers had someone out to repair the door (at least temporarily) that day and had an adjuster visit the very next morning. Seems to me they were very quick to arrive and pay out compensation for damages.

Auto rates are a little high though.
posted by chump at 11:37 AM on August 30, 2007

Farmers Insurance Group is rated "A Class XV" by A.M. Best Company, an independent third party that rates the claims-paying ability (i.e. security) of insurance companies. Their long term rating is also an A, and outlook is stable. The "A" rating is "assigned to companies that have (in AM Best's) opinion, an excellent ability to meet their ongoing obligations to policyholders". The "Class XV" part means their assets are $2b+, putting them in the largest class of insurers.

Independent ratings such as AM Best, S&P, Fitch and Moody's specifically look to addres the claims paying ability of companies, and as such are a GREAT source of evidence on their claims paying ability (in California, and elsewhere).

These ratings don't address "customer service" or satisfaction type issues, merely credit and claims paying. I echo the sentiment above, though, that EVERY insurance company is going to get some hatred by consumers. In order to stay in business, sometimes they HAVE to deny claims, and its a natural part of business that insurance companies think your valuables are worth less than you think, etc.
posted by bunnycup at 11:53 AM on August 30, 2007

This might help clarify FIG's relationship with CEA and where your earthquake insurance coverage is coming from:

CEA policies are sold only through participating insurance companies. You can buy CEA coverage only from the insurance company that provides your residential property insurance, and only if that company is a CEA participating insurance company. Participating insurance companies process all CEA policy applications, policy renewals, invoices, and payments and handle all CEA claims. [source]

and

Most Homeowners policies do not cover earthquake insurance or earth movement. However, earthquake coverage is an available option in most states.

In California, California Earthquake Authority (CEA) coverage is available through your Farmers agent." [source].

Note that earth movement also happens in SF without earthquakes and isn't covered by CEA or your HO policy.
posted by jamaro at 12:02 PM on August 30, 2007