Just compare the industry today with yesteryear, and the differences become apparent.
Once upon a time, not too long ago, the smart money was on insurance for when catastrophe struck. Sure, you miss the dollars that leave your bank account monthly for the premium, but a small price to pay for the peace of mind that comes with knowing you will be spared from disaster. A small deductible ensured that you wouldn't be making a claim every time the toilet overflowed.Beyond that, if you have a fire, or a flood or there's a hurricane, you could rest assured that one call to your adjuster was all it would take to put your life back together again.
That's what insurance was for, after all.
Cut to today. Rates are higher, and the list of covered catastrophes has shrunk. For most people, the only way they can afford insurance is to carry an insanely high deductible, like $1000. Most people don't have $1,000 kicking around—but if a tree falls across a power line and takes out your mast, you just know that the repair bill is going to come in at just under $1,000 and you have to pay it.
If it's over a thousand, say $1100—your insurance company pays $100. You pay $1000.
And then your agent has the gall to tell you—you, who have paid your premiums faithfully for years—that 'where you can, try to cover the repair yourself, because if you make a claim, your rates are going to go up. I tell you that as a friend.'
Nice.
And so the consumer is forced to get used to the new dynamic, which is insurance for major catastrophes only. That's it. Unless it's a fire or a hurricane, your insurance is useless. But at least you have that.
Think again.
Bobby Young, 60, rode out Hurricane Charlie on August 13th 2004 and was left with damage to his home. The hurricane peeled back part of the roof and water poured in through the ceiling, damaging most of his possessions.
Young, who works as a supervisor at a citrus processing plant, faced the arduous task of having to replace most of his furniture and possessions. Extensive repairs were needed to the inside of the home, and the roof on his frame house in Arcadia needed to be replaced. The latter alone would cost at least $11,000
His insurance company gave him only $10,000 for everything.
What could Young do? There was mold growing in the home, and it was unsafe. So he packed up what he could and vacated the premises. For four years he's been keeping the grass cut and the shrubbery trimmed, so people would know that the house was not abandoned. The house, he could no longer live in, thanks to United Casualty Insurance Co. of America.
But Young fought back, along with 47 other United policyholders. This month they were awarded $944,056 in damages after the claimants filed suit, alleging that their claims were underpaid. The awards ranged from $6,000 to more than $34,000. Young collected $21,955—enough to replace his roof (it will cost more now) and rehabilitate the inside of his home.
Their lawyer notes that the award was only for contractual damages. A second component of the lawsuit, focusing on bad faith, has yet to be heard in DeSoto County Court.
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It also has 22,600 fewer policies on its books than it did in 2007. That was the company's full compliment of policyholders in Florida at the time. Today, there are none.
Young, who is returning to the small town just off State Road 70, says United Casualty cancelled his policy.
It's been a tough four years for Young, living with either his mother or his girlfriend while watching his home sit and rot in the rain. But he's glad he fought back.
You can, too. Don't let them get away with it.