In my job, I constantly have clients asking me, “What insurance should I get?”
This is never an easy question to answer because there are so many variables. You have to consider cost, coverage, availability, use…the list goes on.
While there are some provisions which fall under every policy, there are others that may not be covered depending on your provider and the language of the policy. For example, most insurers will cover fire damage to your home (unless you start the fire on purpose, of course!) However, some providers may not cover tree root damage, or will only cover damages caused by water if the water originates from a certain source.
The further you dive into your policy, the more confusing it can be. This is why Wheeler, DiUlio, & Barnabei want to provide you with this multi-part series, in which we focus on the weaknesses (and strengths) of some of the major players in the insurance game.
For those of you who don’t have time to read this article, let me give you two short pieces of advice: #1: You get what you pay for. #2: It’s safe to assume that, the more they spend on advertising, the less they’ll spend on protecting you.
Is Farmers A Good Insurance Company?
First on the chopping block in this series: Farmers Insurance Company.
Farmers is a pro at marketing. As mentioned above…they seem to be investing all of their money in bringing in clients, and none in actually caring for them. Although they have great commercials, these TV spots represent nothing about how Farmers actually handles its current clients.
Farmers Insurance has been changing its policy a lot over the past few years. I have seen every variation of their policy, and with every change, it just seems to get worse.
Right now, the version of their policy being pushed on clients is called the “Next Generation” policy. It was designed to save you money…and give you less coverage. Recently, they have begun phasing the Next Generation policy out in favor of a new policy, which was recently approved.
Farmers’ newest policy is being called the “Smart Plan Home Policy.” Let me be very clear: there is NOTHING smart about this policy.
What Makes Farmers’ New Policy So Bad?
Here are just a few key weaknesses (these are the most glaring issues…there are far too many weaknesses to list in one blog post!):
1. You are responsible for your limits.
This means that if you are trusting an agent to help, too bad. In the eyes of Farmers, you are held accountable regardless of who you hired to help you get insurance.
2. They are depreciating labor.
This one needs further explanation:
Depreciation is used as a way to compensate someone for something that is already old and used. For example, when you purchase a car for a certain price, that value depreciates over time as the car becomes older and is used more often.
A person’s work (i.e. their labor) can’t depreciate. It has no life expectancy and doesn’t somehow lose value over time. However, this policy says that if it costs $1,000 in labor to do a job, they can pay you small percentage of that for no justifiable reason.
3. They are eliminating what is covered under the term “plumbing leaks.”
There is still language protecting you from plumbing leaks. However, all of a sudden certain parts of your plumbing system are now no longer considered “plumbing.” Your shower and shower pan are no longer classified as a part of the plumbing system, while your bath tub is still included.
How does this make sense? In the eyes of Farmers Insurance, showers and shower pans are a common item which will break and leak in your home. With this significant change in language, they don’t have to cover your damage from it.
4. There are hidden limits to reimbursement for plumbing access.
There is a $2,000 limit hidden in the policy if you need to cut up a concrete slab to access a plumbing line. This means that if you have plumbing under your slab or basement, you are capped at $2,000 to do the access and repair work to the concrete. And there is rarely a time it will be less than $2,000.
5. The appraisal provision is now over 1600 words and accounts for 3 pages of the policy.
In the past, the appraisal process has been simple: if you and the carrier could not agree to the amount of the loss, then either was able to demand appraisal where each side names an independent appraiser to determine the value of the loss. If they still couldn’t come to an agreement, they agree to an umpire who will decide the value of the claim. Period. End of story. 53 words.
What Farmers has done is not only complicate it to an unreasonable degree, but they are limiting the rights of the insureds in every possible way.
Want to take a closer look at the new policy for yourself: Here is a link to the Smart Plan Home Policy for your review.
As I said, this is just a small sampling of the myriad of changes that are hidden inside Farmers Insurance’s newest policy. Wheeler, DiUlio, & Barnabei will be fighting a lot with this provider over the coming years. If you have any questions about your policy, your options, or your rights, please let us know. You and your home deserve to be protected, and we will do everything in our power to make sure that happens.