Dealing with Home Insurance Shenanigans

Earlier this week, I was combing through some old documentation at my desk, throwing away irrelevant papers when I came across a copy of my home owner's insurance policy.  I looked it over and saw I was paying about $57/month.  Being the ever inquisitive deal hunter, I had the great idea to call them up and see if I could get re-evaluated since I now have more information about my home.  You see, I first applied for the insurance policy before moving into my house with only limited knowledge.

After talking with the very nice customer service rep, she warned me that there was a chance that after all is said and done, my policy could go up do to the additional information.  I thought, "that's fine, as long as everything is accurate".  I walked her through all the additional information, vinyl siding, detached garage, etc.  Finally, she tallies all the results into her company's calculator and she informs me that my new policy will now be $97/month!!!  The rest of the conversation went something like this:

Rep: "Now I told you this could happen, and we have to charge you for this price.  I know that I will sleep better knowing that your house is covered."

Me: "What is that supposed to mean?  Why did the price go up so much?"

Rep: "You see, your house was previously only covered for $310,000 of coverage in the case of completely rebuilding it.  That is less than 80% of the coverage needed based on our calculator.  You will instead need $480,000 worth of coverage.  On top of that, you also need $250,000 worth of personal property replacement insurance."

My home upon first moving in.

Me: "Hold on here.  I paid less than 1/3 of the value you are covering with this insurance.  This is completely absurd.  I can also tell you I have probably less than $20,000 worth of valuables in the house even when you include all our clothing, appliances, and nick-nacks at current values.  This just doesn't make sense."

Rep: "Well sir, your previous coverage was only 70% of our estimated costs, which means we can deny you coverage.  At minimum, it has to be 80%."

Some more arguing went on:

Rep: "Well, if you don't like the price, feel free to shop around."

And that was a great point she made.  In less than 20 minutes, I went to one of their competitors websites, typed in the same information I had given her, and came up with a great policy for only $46/month.  This was even better than I had hoped for.  I quickly called up the new sales rep and accepted their policy.  I informed my bank so that the escrow company knew who to pay, and I was all set...headache gone!

If there is a lesson to be had here, it is to ask the questions and always look around.  Modern technology has made it incredibly easy to comparison shop.  I unfortunately settled on my first try with home owner's insurance, but I now have a great deal!  If you think you're paying too much, try doing some quotes with additional companies online.  It never hurts to ask.

Wonderful Moment of the Day: Realizing I just saved $132/year on home owner's insurance!