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Top 5 Complaints Consumers Had With Homeowner’s Insurance Companies

Top 5 Complaints Consumers Had With Homeowner’s Insurance Companies

Has there ever been a time where you’re standing in a flooded basement with 3 kids screaming at the top of their lungs, while in the back of your mind you’re trying to remember the contact information for your home insurance agent?  Although this has not happened to all of us, when it does we want to make sure we are covered properly and have a great homeowner insurance company behind us.

There are many cases where policy holders have a positive experience, and everything is handled in an ample amount of time with the correct coverage.  With that being said, there are also times when you cannot reach your agent and the claim is not handled correctly or takes twice as much time as expected. 

Below we will dive into the 5 most common complaints that consumers had when dealing with their homeowner’s insurance company. 

1.  The cancellation of a policy or a threat to cancel

There are many cases where homeowner’s insurance companies have threatened to cancel a policy or have actually canceled the customers policy.  Some of the reasons for cancellations were due to claims the policy holder made or a missed payment that was often found as a billing error.  Other companies threatened to cancel a policy because policy holders did not make the improvements or changes to their properties that were suggested by the homeowner’s insurance company.  Some of the changes were replacing a roof or updating areas inside the house.

2.  Lack of communication

It is extremely important to be able to contact your insurance agent or company at the time of an issue.  Many policy holders have stated that contacting their insurance company is not a simple task.  Policy holders gave an overall rating of 3.10 out of 5.0 when trying to communicate with their homeowner insurance agents or companies.          

A fairly common theme in this category was being told wrong information. Reviewers were told something was covered when it wasn’t and that their rate would be one thing but ended up being something else, and that a certain level of coverage would be approved, but it wasn’t. The miscommunication often happened between the agent and policyholder.

3.  Inadequate coverage

One of the biggest issues that policyholders complain about is their lack of coverage, particularly for the things they needed.  72% of the individuals that took this survey and had coverage issues said they were likely to shop for a new homeowner’s insurance company.

There are many issues that policyholders can have with their homeowner’s coverage.  Additional information suggests that policyholders are finding out too late that they didn’t have necessary coverage for property damage, coverage levels were too low, or there were errors in processing documents.

4.  Disputing a claim

I think we all knew this complaint would be on the list – issues with settling claims.  The average rating of homeowner’s insurance companies discussing a claims dispute were a low 2.38 out of 5.0.  Homeowners often state that the reasons insurers denied a claim were:

  • Perceived cause (i.e. act of God)
  • Plan design (flooding due to sump pump not having a sump pump rider
  • Amount the insurer will pay

5.  Cost of policy or rate increase

The most common consumer complaint is the rate increase or the price of a policy being too high.  This was also the most common complaint when dealing with car insurance.  Insurance companies get numerous complaints from consumers every day complaining about insurance rate increases and many customers don’t know why.

Over a quarter of all the complaints to an insurance company deal with the increase of a customer’s policy.  Many consumers are unclear about the increase of their policy’s.  Policyholders without a prior claim may experience rate increases because there has been more severe weather or natural disasters in their area, an increase in the cost of home repair, insurance fraud or increased crime rate in their area.

For more information on homeowner’s insurance please feel free to reach out to one of our agents at Safe Harbor Insurance.  We would be delighted to help and answer any additional questions that you may have!