"On Friday August 2, I received a letter in the mail from my insurance company. I immediately thought it was unusual because it was not an envelope that they typically use for correspondence. So I was curious, to say the least, what it might contain. After opening it I find a letter from my agent.
It states that due to "Natural Disasters", claims have sky rocketed over the last few years costing millions in payouts that would not have normally been paid. Due to this "Run Loss" they are left with No Choice but to raise everyone's deductables on their policies to a minimum of $1000. It went on to say how this was automatically going to happen at the end of August of this Year. They also offered the option of maintaining the lower deductible for an extra $436.82 per year.
Needless to say I was not very happy because I came to the stark realization that both my home mortgage and auto loan both have specific language in the contracts that say I am required to maintain a $500 deductible on my insurance coverage.
I called the insurance company to speak with my agent to find out what is going on.
She explained in the same manner that the letter did that the payouts were to big so they have to raise everyone’s deductible. She also said that ALL insurance companies throughout the U.S. are doing the exact same thing. She then said "What’s wrong, You will Save allot of Money?". I made it clear to her that if they were to automatically adjust my deductible to $1000 dollars that they would cause me a breach of contract on both my mortgage and my auto loan. She immediately marginalized that by saying "The Banks Have No Choice, They have to do what we say".
I told her it was Not about the insurance companies dictating to the banks, this about individuals who are going to have their contracts breached and possibly have their homes foreclosed on because of an act of stupidity and greed.
She then reiterated that I can maintain my current deductible for an additional $436.82 and then followed that up with "Well, we didn't have to send you a letter telling you, we just did that as a courtesy". I told her not to do anything on my policy and that I was going to call the bank. She said to do what you want the policy will automatically adjust in a couple of weeks.
So I call the bank. I speak to the president of the bank, which is usually who I always talk to since we have a pretty good relationship. He was completely blind sided and surprised by what I had just told him. He asked me to send him a copy of the letter, and I did. He calls me back latter to tell me that the insurance companies sure do know how to screw things up. I asked him to quickly review both the mortgage and auto contracts to be sure that I was correct in the language and his reply was "We already did, it is in there in Black and White".
I then asked him if this was going to cause any breach of contract issues and he said "Yes, Definitely So".
I told him that allot of people in the U.S. are going to have this happen automatically and most will probably never receive a letter telling them. He said that this could cause a problem for those people that don't know.
I asked him what could be done and he said "Nothing". He told me that the bank is going to append both of my contracts to the higher deductible and that I can come in sometime next week and sign them. He then told me that he is going to have to appoint a group in the bank to go through and append Everyone's Contracts to reflect the same.
I Always knew that insurance companies were a Scam, but, until Friday, I never knew just how much power they had.
So. .. . .
If you have a mortgage or Loan, you better heed this piece of friendly advise. . .. .
Check your contracts and call you insurance agent to see if this is going to cause you a Breach of Contract. Then call your bank and see if they can be adjusted. Otherwise you will have to pay allot more to maintain a lower deductible.
This is Not about raising insurance rates. It is about raising the Deductible that you pay in the event of a claim.
In ALL cases when you raise you deductible your Premiums are CHEAPER.
The problem lies in the contract that you signed when you got a mortgage or a loan on your car."