Jan 28, 2010

Complaint: Progressive Homesite Homeowners Insurance

Summary: avoid Homesite Insurance like the plague.

For the last three years, our house in Dallas, TX was insured for about $200k. First with Amica, and more recently with Progressive's affiliated homeowners insurance company: Homesite Insurance. Everything was fine until we got our renewal bill for 2010 and Homesite had increased our premium about 50%. We've never had a claim. I looked at the premium detail and it turns out they had increased our home's replacement cost from $200k to $300k, and this increased the overall premium.

I called Homesite for an explanation as to how a home's replacement cost could increase by 50% in a single year. They said they had switched to new software and this is the estimate that it had generated. I told them that the market value for this house is around $200k and there is no way you could build a house on this lot for $300k. Their software put our home's replacement cost at about $150/sq. ft. when in fact, new homes are being built in our area for $100/sq. ft. Our house hasn't had any renovations or upgrades that would increase its value by 50% in the last few years. I told Homesite that we didn't want to purchase $300k of insurance for a house that could be replaced for $200k. They said we had no choice but to accept their appraisal.

I then called the Texas Department of Insurance to file a complaint against Homesite. I wanted to see a report from a licensed appraiser or builder who would sign his name to a report stating that our house would cost $300k to rebuild. The TDI said they would investigate and contacted Homesite. A few weeks later we received a letter from Homesite that repeated what we were told on the phone. They provided the detail of the $300k replacement cost, but the largest single line item was "Other/Misc" which was $70k. That was the level of detail they provided. This kind of "estimate" borders on fraudulent to my mind.

TDI later sent us a letter stating that Homesite can use any replacement cost they want. Who am I to argue with the Texas Department of Insurance? So we cancelled the policy and went to another insurer who gave us a $200k replacement cost estimate and a much lower premium. The new insurer suggested that Homesite may not have been able to get a rate increase past the regulators, so instead they're just jacking up everyone's insured value to increase their premium revenue.

Now, I fully understand that my homeowners' insurance premium will probably increase from year to year. I also understand that my home's replacement cost will also increase over time due to inflation. But for Homesite to think that any homeowner should accept a 50% increase in replacement cost in one of the worst housing markets in decades is ludicrous. I guess they haven't noticed that demand for home building services isn't exactly in high demand right now.

We still have our auto insurance with Progressive from when we switched to Homesite, but I'm going to look around for a better rate on that as well. If Progressive wants to associate with Homesite, neither company deserves my business.

Homesite Home Insurance: the worst homeowners insurance company in Texas.

31 comments:

nepatriot93 said...

Worst in DE as well! They refuse to cover items that were stolen from my home!

Nick said...

Your article is very ignorant. Market value has absolutely nothing to do with the cost to repair or replace your home. If your new insurance company couldn't completely rebuild your home at 200k than you would just be on websites like this complaining about them. Why would you not want to ensure that your most valuable asset is covered properly. I do not work for Homesite and I am not defending them, but you believed a sales agent from another company who delivered what you wanted to hear and you fell for it. What contractors license do you have that makes you an expert in valuating the cost to replace your home? That new agent also failed to tell you that if you have a claim and the cost to rebuild your home exceeds your policy limit you have to pay the remaining balance out of pocket. Insurance companies do not give you checks to go purchase a new home, you have to rebuild the one that is insured. Also reconstruction is more expensive than new construction. Contractors do not like to do reconstruction do to the increased danger of the cleanup to their employees. It sounds like Homesite attempted to improve the accuracy of their assessment and all you see is premium. The new insurance company may not be covering you at replacement cost leaving you in possible financial ruin down the road.

Gerald said...

nice post!

Particia said...

It's a person's right to ask for an explanation of his insurance statement of accounts. If there is something that he doesn't understand or bothers him, he is always free to ask his insurance provider. We need to be very keen in all the details that we pay for our insurance. Palm Springs where my Mom now lives has reputable insurance providers. Their human resource management outsourcing teams are always happy to assist their clients. Mom had her house insured for 3 years now without hassles. The company will always provide her with reasonable explanation whenever there is new with the system which makes all the transaction run smoothly.

Brad said...

Nick might need to learn to read a little more carefully prior to professing ignorance as the author does mention market value he clearly references construction costs (which by the way are accurate)"Their software put our home's replacement cost at about $150/sq. ft. when in fact, new homes are being built in our area for $100/sq. ft.". Even though there may be some extra cost hauling off the rubble from a total loss, the cost of the slab, utilities, tap fees for utilities and site work necessary to get the site to a build-able condition don't burden the price to re-build so the total cost to re-build should be considerably less than new construction. etc.

I just finished a 45 minute long conversation with my insurance company. Replacement value of a 3300 sf house went from $143/sf to $210/sf. The house was built in 1920 and the rep was quick to point out that they would have to use all brick construction since that's what it is today. That has some validity to it but our company recently built almost the same house for $135/sf which is nowhere near the $210. Why can't we have the right to request that our house be re-built the same quality as a KB Home ? Because in the eyes of the State of Texas we are all too ignorant to understand what "replacement cost" means so they institute idiotic regulations that are supposed to protect us and end up providing the insurance companies an additional 20% profit margin. I am sick and tired of being penalized because others can't wipe their own butt and those of us who are responsible have to suffer for it.

I have been with this insurance company for over 20 years and I am disappointed that they have now decided to play the game.

Chris and Faye said...
This comment has been removed by the author.
Ted said...

The current insured value of my home is the standard estimate provided by several insurance companies OTHER than Homesite, so I do not think that I am grossly underinsured (unless Homesite is the only company in the US who knows how to estimate replacement cost).

Additionally, a very similar house across the street from me is for sale for less than $200k. So Homesite's replacement cost estimate of $300k is just ridiculous, even when you take into account the demolition/debris removal cost...and the land itself (which is not insured) has to be worth something as well.

Martin said...

Worst in IL. Cancelled my coverage for discussing making a claim! Isn't that what insurance is for?

BK said...

To Martin:
It's Bad Faith to threaten to cancel your insurance for suggesting you may make a claim. YOu should have pursued it further if your story is 100% accurate.

Also, I'd be interested to here the diff. in premium amounts between what the original author was paying and what he would have paid if HOmesite raised his coverage. HO insurance is one of the cheapest things you can buy for the potential return on your investment. 95+% of HO claims are not total losses. SO you pay in $5000+ over ten years and have one low level claim fpr fire or water or hail and you just hit the lottery....YOU get a payment of $10,000+ for a lesser investment. There's many more things to gripe about insurance than your premium.

Jody said...

Homesite insurance has really given my mother the run around too. They should be put out of business. Their integrity is completely questionable.

g said...

Homesite is by far the worst insurance company I have ever dealt with. We had a robbery and my husband was in the process of being deployed. We asked them to please expediate the matter while he was still in the US. They, of course, did not and now wants me to go out and buy his replacement tools and four wheeler. Like I would know, exactly what he had and what is a good tool and what isn't. We asked them to give us the time after he returned from deployment to replace the items. They told us we could do that but the replacement cost would be based on today's prices, not the prices when he returns in one year. What a bunch of uncaring people, maybe we should send them over to the desert for a year! I will never ever purchase any type of insurance from this company again in my lifetime. They are only good if you never need them!!!

Thomas said...

I recently had a similar issue with Progressive & Homesite insurance policys. I switched a year ago this month (Oct.) and have since cancelled both auto & home with these people. The premiums from Homesite more than tripled just prior to the renewal date. My premiums are paid via an escrow account with the lender. I called Progressive/Homesite and asked the reason for the sharp increase without receiving any sort of satisfatory response. I have filed zero claims during the year of coverage but did attempt to contact Progressive with regard to possible roof damage due to a storm we experienced about two months prior to the renewal date and that was a circus. That is the point in time that I discovered from Progressive that Homesite was their carrier for the homeowners policy. I have cancelled with Progressive (the people I contracted with for both auto & home), have received a refund for what I had prepaid for auto but, still have not received a refund from Homesite for the prepaid tripled premium. Keep in mind that I cancelled both policies in Sept., Progressive was notified in writing indicating both auto & home to be cancelled at mid-night on the policy end date, Oct. 13, 2011. I nor my lender have, to date, received a refund from Homesite Insurance Co. and Progressive tells me they have nothing to do with it... they say it isn't their responsibility to recover the money and I reminded them they are the company I contracted both policies through. I am reporting this issue with the State Attorney General's office and our State Insurance Commissioner. I do have another carrier by the way with better coverage at a cost less than Progressive was through last year.

George said...

Home owners beware of Homesite! I have Progressive's car insurance and decided to bundle my insurance when I bought my house. My closing was on Oct 4th, My quote from Homesite was August 25th. They did not look at the house until a couple of weeks after the closing. They hired someone to take pictures of the house. Well to my surprise I received a letter informing me they were canceling my insurance. The person who took the pictures never went on the roof. They claim from looking at pictures that my roof shingles were curling. I have a FHA loan, the appraiser, the inspector I hired to look over the house all said the roof was sound, it needed minor repairs that were made before closing. I had another insurance company take a look and stated it should be good for another 5 to 10 years. Homesite had plenty of time to have the pictures taken and could have refused BEFORE the closing and if necessary been a part of the negotiations. This is an unacceptable means of cost cutting. There should be a law making it illegal to cover someone if they haven't checked out the home before the insurance coverage started. I canceled my auto insurance and the home insurance immediately after I was covered with another insurance company.

DeCee said...

I would never do business with Homesite again! I switched to Progressive to save $500 per yr on my homeowners, and my policy was issued by Homesite. The policy took affect 15 September, and approx 30 Sept I got a notice of cancellation stating the roof shingles were lifting and buckling, and there was damage to the siding. I contacted Homesite and was told my premium was in the process of being refunded, but once repairs were made I could call back and they would quote a new policy. I hired a contractor who couldnt believe my insurance was being cancelled for such minor issues. My roof is only 6 yrs old and still in good shape. He nailed down a few roofing nails which had worked up, and replaced siding which had some minor damage (which did not expose the frame of the house at all). This repair was costly since they no longer make the type shingles I needed....the product I had to use was very expensive! I contacted Homesite once the repairs were done, only to learn that as of 1 October they were no longer issuing any new policies in my state (AL)!! So much for saving on my insurance premiums...the repairs far exceeded what I saved, and all for Homesite's bogus "issues" with my property.

Seth said...

I've dealt with Homesite as a contractor. The homeowner suffered extensive damages to their home due to the record tornado outbreak of 2011. Her claim was submitted in May of 2011. It is now Dec 2011 and they still have not issued payment. Since repairs were not completed there has been additional damages on the interior of the home caused by summer rains. The homeowner is unable to get a response or call back from Homesite. As a contractor I deal with hundreds of insurance claims every year for homeowners. This is the worst insurance company I have ever dealt with. STAY FAR FAR AWAY FROM HOMESITE

SB said...

I had a similar experience with them. They increase the cost ~30K and increased the premium by $300. When I called and asked if we could get it for thr original price, the cold lady on the other end said she can recalculate it and said it might go up. When she redid the estimate it went up as we were on the phone. That was my new quote and couldn't even change it back to the one they reassessed in late November. I had told her that I was looking to reduce the amount because of unemployment situation. She didn't care. What a bad service. I called them last night and cancelled the insurance. Went back to Traveller's. So much for their ad name your price (may be it is for auto).

Theresa Bratton said...

I contacted Homesite because I recently got engaged and wanted to find out if I could add my ring to my existing renter's insurance policy. I was told that I could add it as a scheduled item, and if the ring was under a certain amoung, I would not need to increase my coverage. I took this to mean my premium was not going to increase, and I was never told otherwise. Sure enough, they increased my preium and charged me. I am dissatisfied with the amount they are charging (it's more than the premium for my entire policy!), but they're already charged me. I assumed I would at least get a good deal because I'm bundling my auto, renter's and now engagement ring, but instead I just got charged for something without being told beforehand. VERY DISSATISIFIED. I will be looking for a new insurance conmpany.

Molly Nicholson said...

First, I want to say that I am sorry for your stories. I have read some of them and I wanted to comment and say that I can also see the side of the company. I am an agent and know how things work. First, Nick with the story on 10/13: What clients don't realize that in the figure of the dwelling coverage there is more than the rebuilding cost of a home.

Remember, if you are at the point of a total rebuild, you had a catastrophe to ruin the home so therefore you need to demo the home and take away the materials. There is a big cost to that as well. We call that debris removal. Perhaps that is your misc/other $70k

For THERESA, the last post, why would you assume that adding any coverage would NOT add to premium? You were correct that it doesn't add to the contents coverage but you are adding a jewelry floater for the amount of the piece covered. Those COST MONEY. You probably didnt need to provide an appraisal is what they meant. Under 10k is the threshold for providing paperwork. Also, home/renter policies do come with some coverage for jewelry but they are only covered for normal perils (wind, theft, fire, water,) and usually its up to like $500 or something. If you got engaged I'd hope you'd want it covered for losing it, a stone falling out, etc. That means a scheduled item.
Maybe this is a reason to get an agent or do your own research about these things before you take action. I was an agent for years and I hope this explains things some.
Happy insuring!
Molly

Tallalex said...

To be brief, avoid Homesite home insurance at all cost. My home had some damages from hurricane Sandy. It was almost impossible to find any one to talk to about my claim. Messages I left on answering machines were returned after 5 days minimum (I also had a return call after 12 days). The final bill they came up was 1/5 of the actual claim amount on which the agent had previously agreed with me on the phone. By the way the check arrived 40 days after the claim plus documentation was submitted. Terrible company - stay away.

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Thomas said...

I posted in Oct. 2010 when Progressive served-up a nearly "triple" my first year home owner insurance premium at the annual renewal. I am and have been since with another insurer and have not had one issue regarding my home or auto coverage or premiums. I told Flo to stick it and life, insurance-wise, has been far better since making that decision.

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Deepak Rout said...

Also, I'd be interested to here the diff. in premium amounts between what the original author was paying and what he would have paid if HOmesite raised his coverage. That has some validity to it but our company recently built almost the same house for $135/sf which is nowhere near the $210.They should be put out of business. Their integrity is completely questionable.

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Tracy Tomko said...

This company refuses to pay for any damages to our home.After a hail storm when most of our neighbors got new roofs, Homesite said we didn't have enough damage for them to pay (2700 deductable).
Now all of our shingles are blowing off our house and they refuse to pay because it doesn't reach our deductible and we should have fixed our roof after the hail storm. Both claims the adjuster was on our roof only about 15 minutes. The first guy came into my home and told us we should just not push the claim and maybe after the next storm we will have enough damage for Homesite to help us with our roof. Homesite now claims we are trying to combine damage amounts of both storms however a roofer who looked at it said there is at least $8000 worth of damage and he had to do patch jobs to keep it from leaking.
The kicker is this roof is only 5 years old and we get a new roof discount on our policy. So in five years our roof was totaled and Homesite says this is our fault.
My neighbors couldn't believe we didn't get a new roof after the first storm as all of our vehicles and roofs were damaged.Terrible shady company and I wish the worst for them since that is what they gave us.

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