Oh boy, they will have a TON of insurers in CA, especially in the Bay Area, LA and SD.
In Palo Alto, a tear down 1000 sf 2 bd house on a 5000 sf land is worth 2.6 million. So, do they insure that?
It is really important to try and find out about how they pay out. One of the things insurance companies were doing (thanks to the fine sleazeballs at McKimsey and Co) and getting away with, was when you had ‘full replacement value’, offering a ridiculously lowball offer (like if it would cost 300k to rebuild the house, offering 180k )and basically saying “if you don’t like it, sue us”. You obviously can check with the better business bureau, and you also can check with the state department of insurance, since insurance companies are regulated by the state, and ask about complaints (they may even post information on a website). One of the problems with the insurance industry is there often isnt’ much competition, so if they stiff policy holders, there is little recourse, most state department of insurance are reluctant to tangle with the companies, and they have scads of lawyers and can basically litigate you to death…
And I agree, the biggest part is asking just what does the policy cover, and what does it mean? A previous poster threw out a lot of terms I suspect many on here don’t understand, and how the policy is worded is critical. For example, there are ‘full replacement’ insurance policies where they do what the health insurers do with ‘reasonable and customary’ fees, they decide based on some mean for the area involved, but often involves using areas where it is a lot less expensive to rebuild and pay out on that, so if you live in an area where it is expensive to rebuild, tough luck. It could be that the 500 policy has so many loopholes in it that when you try to file, you find out you don’t have the coverage you need, or it could be that is the better one.
One recommendation, go with a higher deductible, one of the lessons I learned over many years is that insurance companies hate claims, but they especially hate claims for relatively small amounts, so in reality even if your deductible is low, it won’t pay to file a claim , because they likely will jack up your rates or worse…
Where can you find out the pay out records of an insurance company?
I went to some web site with pages upon pages of complaints, but that is almost for every company.
We moved to Florida and discovered how limited our options are here. None of the above and most nationally known insurers won’t touch the state, sigh. Here policies available seem to be divided into wind/sinkhole but never both coverage available- and at a cost. Food insurance is an entirely different policy to consider. You need to check on what coverage is/isn’t available for potentially expensive issues in your area. Once you decide on that you can do the apples to apples for service.
@artloversplus Remember that homeowners insurance only pays to rebuild the building structure NOT the land so your insurance value should only reflect the cost of the structure, not land value. The land will not be destroyed by a fire - though if you build a house on the side of a mountain… In your Palo Alto example, almost all the value would be land value, so in that instance, Chubb would not write the policy, but if you tear it down and build a large custom home - they will be there.
As far as complaints or servicing statistics, there are a couple of places to check. Consumer Reports had an survey a couple years ago. In know Amica and Chubb were highly ranked. Also, several states make available complaint statistics. HOWEVER, each state compiles these statistics differently. Some only include “verified” or “justified” complaints but other include all complaints - even if the complaining customer is absolutely in the wrong. So you have to carefully read and analyze the information.
I have attached a link to the most recent Illinois data. As you can see its several years old. Also, not all companies are listed because a minimum number of complaints is required before a company is included. Also, you need to be aware of all of the subsidiary companies a large insurance group may use. For example, two Allstate companies are listed in Illinois - I believe one is for super preferred business. I’m sure you can google your state to see if similar information is available.
http://insurance.illinois.gov/Complaints/ratios12/2012HomeownersByComplaintRatio.pdf