State Farm Insurance - sneaky deductable increase on homeowners policy

Dec 14, 2010
review #211494

While trying to file a homeowners claim in October (due to a theft), we discovered that our policy's deductable has doubled the month before. Our agent "played dumb" when I asked why it increased, and it wasn't until I called again, that he told me that everyones policy deductable had doubled and it was noted on my renewal the month before. (No other notification, just a note on the policy.)

Some agents attempted to contact their clients atleast 3 times...not my agent! He states that he called and left a message, but not so...I have an answering maching and caller ID... no call. Then I found out the day they supposadly called - funny thing, I was home, off work the entire day, because I had surgery the day before. Like I said, there was NO call.

Besides all that, in the same week surrounding the day they supposedly called, I have records of contact with them on 3 different occasions, because we were taking out another policy for liability insurance. Not once did they ever mention anything abouth the homeowners deductable.

After talking to several "higher ups" at State Farm, I got nowhere. Guess they are in their legal rights by just putting 2 lines on your policy. Shame on me for not looking it over, but I never imagined they could change that without approval.

So much for being with State Farm for over 20 years.... when they decide to sneakly change something and there is no mandate on how agents notify clients, this is just poor business practice...but I'm sure losing one customer that gives them over $7000 a year is no big deal to them.

If anyone knows of anyway to go further with this, let me know.

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Jun 29 Parkville, Missouri

I had the same thing happen to me. the letter I received said if I wanted the change to send back the letter to confirm. I did not want to change my $500.00 deductable that I'd had for over 20 years, so I did not send it back. I wasn't notified that there was to be any change. BUT THEY CHANGED IT WITHOUT MY PERMISSION. Isn't this against the law?

1 0 Reply

May 03

I agree that this is very underhanded of State Farm to make a significant change like this with a few lines as a policy change. I for one am going to check out Allstate prices. It is a shame but most of State Farms policy holder will not know about this change until they have a claim. This is the only way State Farm can prevent a mass exit of their policy holders. Additionally I could pay an extra $224.78 to save myself $790 on a claim. Wow, that's like paying $224.78 for $790 worth of insurance. Do they think their customers are ***.

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Mar 29 Richardson, Texas

If you are that upset about your deductable increase,There are other insurance companies other than State Farm.But please be advised there insurance deductables could increase also if you are considerd a high risk.This is why i stick with Allstste never had a problem with them so far.

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StateFarm Hater

Mar 29 Barnhart, Missouri

Looks like all of us got sucker punched. My wife and I are 20 year customers with State Farm as well. We had a weather related roof claim in 2009. It should have been a basic "look to confirm" and write a check to cover the costs (minus the deductible). We only got about 2500 dollars to do 6800 dollars worth of damages. My agent said that they would work out the extra charges with the contractor. Their idea of working it out was to tell them to go after us for the money because they weren't paying. That was bad enough, but the worse part was I had to call 3-4 times per week, go to other agencies, headquarters, etc and they did not agree to even send the original check until 2012. That should have been enough to make me leave, but my whole family had been with them so I decided to maybe just switch agencies. Now I had construction materials stolen out of my backyard during a deck install. This time they were quick on the claim and then told me there was a 1000 dollar deductible. I told them to check the claim they paid me in 2012 and she said it was a 500 dollar deductible then, but.... and then I got the whole story about the letter, which if I would have received would have gotten me to call right away. I can understand them changing the premiums occasionally on the policy anniversaries due to inflation and cost of doing business, but we signed into a contract with the understanding we would carry a 500 dollar deductible and they should NOT be able to adjust a... Show more

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In the Biz

May 07

There's so much information you need, I don't really know where to start. I guess I'll start with the response to your roofing situation.
First: Your idea that a roof claim is "a basic look to confirm and write a check to cover the costs" shows your blatent lack of understanding of insurance in general. Each claim is analyzed based on prevailing costs for labor and materials in the geographic location of loss. The contractor must provide a BREAKDOWN of the costs and disclose exactly what he/she is doing to repair. The job of the claims personnel is to verify that the contractor is repairing the damage at a fair and reasonable price. We have roofing contractors in our area that give the exact same price for all jobs and just base it on square footage without even examining or attempting to breakdown what the exact repair will take. If insurance companies just paid whatever bill a contractor came up with, there would be no such thing as insurance because it wouldn't be cost effective to keep.
Second: Checks are not submitted to the homeowner until the work is agreed upon and started. Once the work is complete, the final check is sent. There is no up front total loss compensation in the world of homeowners insurance.
Third: You were dissatisfied with your claim so you changed insurance agents? Wow. What exactly did you expect to accomplish with that? Insurance agents are salespeople. Their entire purpose is to sell you a policy. They are not in the claims
... Show more

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Jan 02

I just wanted to state that the same thing happened to me. My husband and I have been with State Farm for over 20 years and just had our first Homeowners Insurance claim. Found out the exact same thing as you and that our policy went from a $500 deductible to a $1700 deductible. Again, like you, we were told that they mailed us a letter and it was stated on the bottom of our renewal "Declaration Page". Funny thing is that this year was the first year we did not receive the renewal in the mail and it was sent to the Lender. Funny how that happened!

Like you said, I guess shame on us. We will be taking all of our business elsewhere!

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Aug 01, 2013 Akron, Ohio

You won't believe what they are doing now...without any claims state farm is increasing my deductible to .5% of my coverage "A" Dwelling. My deductible was 500.00 and now it is 2461.00. the statement state a change in deductible to the greater of 1000.00 or .5% of my dwelling. So the minimum deductible is now 1000.00 or .5% of the amount you insure for; or in my case 2461.00. My deductible increased five times my previous deductible but the cost of my insurance dropped 13% or about 200.00.

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Risk Manager

Aug 01, 2013

I believe it. Insurance is based on risk. You must live in a high risk area for claims. Either pay the new premium and accept it or find another insurance company who will soon do the same thing if you're in a high risk area. This is how insurance works. If you think about it, why would you be make small claims under $2500 anyway? Insurance is designed for catastrophic losses.

1 0 Reply

Jul 17, 2013

I also had no notification from State Farm about the hike in home owner pollicy deductable. Mine went from $500 to $1000 and I learned bout it when i had some water damage (long story) n our home that soaked carpets, pads and a few misc items that were on the floor at the time. Our other, and only, claim with theem was for hail damage in Oct. 2010. It was still $500 deductable then. Our agent and his assistant, also played dumb and could only respond that it was raised in 2011 due to "cat damage", (like i'm supposed to know cat meant catistropic) due to hurricanes, twisters, flooding, ( and perhaps a rash of ingrown toenails that were somehow related to natures fury against mankiind for bad deeds or whatever.........just as far fetched as some of their baloney information.) Kidding,of course, about the toenail part, but i'm really upset about no notification at all about doubling our deductable.Nice way to treat policy holders that have insured by them for 40 year with auto (3 cars), homeowners, (also a policy for a rental home), an "umbrella policy" jewelry rider, and probably a couple I've managed to forget. If "I were King" I would not treat my customers,big or small,in that manner. So, like so many of the other millions of financially devasted, and disappearing, middle class Americans, I too am "pissed" and, as I sit waiting for their estimate, I believe that it is all just an excercise in futility because, "who has an extra grand laying around?"

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Elementary Insurance

Jul 17, 2013

No notification? Really? So, you don't receive a renewal notice every year? You know, that legal document that's sent out every single renewal. It outlines EXACTLY what your coverages are, including the deductible. See, the way insurance works is like get an offer to renew via the insurance company. You read over the stipulations and the renewal declarations contract declaring the conditions of renewal. You AGREE to the renewal contract by paying the premium. You clearly paid the premium, thus accepting the new renewal in 2011, then again in 2012 and if you renewed before July of 2013, you accepted it a third time. Your complaint has zero merit. BTW, did you not notice the DECREASE in your premium by accepting the higher deductible? I bet you didn't complain about that.

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Pissed PS

Mar 22, 2012

We found out that our deductible was increased from $500 to $2,000 when we had to file a claim because the hot water heater flooded our basement. Our State Farm agent claims to have sent out notices to all policy holders indicating that because they (State Farm) does not hold all policies within the household that their new policy was to increase all deductibles. I feel that State laws should mandate that any deductible changes be made in writing from the agent. We should not depend on changes this drastic rely on the U.S. Postal service delivering a letter, unless the policy holder has to sign the letter and mail it back to the agent. Needless to say we had to *** the bullet and get our claim started, but we are pissed none the less! With all of the sponsorship's they're providing these days, State Farm should themselves "get to a better state" as their commercials say . . . shame on you all.

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State of Farm Guro

Oct 27, 2011

To the orginal blogger.....yes we expect everyone to go over there renewal every year. We would literally have to hire an extra person in the office in order to regulate babysitting every policy holder about mandatory changes across the board.
To should challenge the deductible increase, it seems like your agent is not a very good one. ALSO SAME TO ORIGINAL BLOGGER. Find another agent. Also, your dwelling cost is not derived off of what your house is worth, only what it would cost to rebuild your house from the ground up in the event of a total loss i.e. a fire. Your rep should've explained that to you. Regardless of the market or economy, your dwelling cost is an Estimated Replacement Cost.

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Oct 25, 2011 Dehra Dun, Uttarakhand

Note to insurance guy..I heard even the state dept of insurance is crooked. Also I got a sneaky deductible item also and told we got approval from the state..we always had 250.00 deductible and now it is mandatory $500.00 - plus when policy was purchased it was class A guaranteed replacement cost. Now I get how that was changed-we got approval from state. Bull s...Also it is a lot of stress to start anew. They take advantage also of women like widows etc. State Farm (Your sneaky friendly neighbor) plus won't even let me have another agent who everyone who has him likes & I am supposed to have this creep who is 11 miles away & the good one is only 2 1/2 miles away..

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Aug 01, 2013 Akron, Ohio

Sorry Michelle, It really doesn't matter whether the agent is a good guy if the the company has gone bad...and that is the case with state farm. Find a new company. If enough of us drop them maybe they will wake up.

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Sep 08, 2011

I had stuff stolen from my farm- inside the barn, stuff that was sitting on a hay wagon, they do not cover the hay wagon itself- but today I was under the impression they wont cover the stuff on it- Is that legal?

1 0 Reply

Sep 05, 2011

My home owners insurance is through State Farm Insurance. I had a claim 11 years ago for storm damage. My selected deductible was $500.00. The repairs were done. This year I put in a claim for an ice dam on my home which substantially damaged my interior kitchen wall and living room ceiling/wall. Now, they say my deductible is 1% of the home value.
I never changed it! My agent said I came in and changed it at their location... then I contacted their headquarters directly and changed it. WHAT?!! They sent me
some fake slip, without my signature as proof! Furthermore, they say my home value is $180,000.00! I just looked into a refinance and was told it was only worth maybe $125,000.00 in todays economy (I am unable to get a refinance because of this).
My agent said, “I didn’t agree with the way they (State Farm Insurance) were doing it, they're doing it to a lot of customers”. WHAT!!!!! That isn't right!

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Jun 15, 2011

State Farm has implimented an increase in deductibles across the board that is going into effect across the United States over the next year..... all of these changes have to be run through the state board of insurance.

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Insurance Guy

Jun 13, 2011

Did you contact your state regulator. State Farm's decision to do this is not only unprecedented in the industry but most likely not acceptable to regulators. The insurer has the right to alter the terms of the contract but that does not include the deductible choices unless they are eliminating the choice for the lower deductible options (which they did not). They have effectively hidden a RATE INCREASE. Your premium should have decreased significantly but likely did not. Call your department of insurance.

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Jan 14, 2011 Dehra Dun, Uttarakhand

Sneaky deductible is correct. Too much to go into on that but now the big thing is after I paid my bill for 2011,which is due Dec. of 2010 I get this ltr. stating YOU & you agent? came to this crooked XACT/tool or whatever estimate price of cost to rebuild home. What? Yet he has me insured for about 60,000 more than that crooked XACT?? estimate. Actually the amt I am paying for is in the ball park of the cost of rebuilding it.
Naturally all this @**!! double talk lying and saying I questioned the price of my policy this summer-one big lie-I called them this past summer about an article in nspr stating the state I live in-if house burns down one really doesn't get covered for if also like a tool barn or what I have is a part cedar carriage hse. burns down also. I questioned the office idiots about that..
The sneaky agent said I called about price I was paying.Anyway I recall the sneak I happened to look out the window (that was this past summer) and there he was. I had him come in & we talked conversation as he knew my husband-who passed away & like a *** I never asked what he was doing there-I subconsciously tht oh just like rechecking things out I even said you saw the addition didn't you. He sure did.
It was done in 91 beautiful large kitchen- 100% large redwood deck with roof. hse built by 2x6's and much more. All cedar & some stone. Then on phone oh we have built homes for $275,000. etc. I went to agency head office. Another joke- we are
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