Feel abused by homeowner insurance due to premium hike and coverage that I did not ask for.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: May 25, 2019

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Insurance Question from Woonsocket, RI

Asked on 05/25/2019

Feel abused by homeowner insurance due to premium hike and coverage that I did not ask for. Senior disabled couple struggling to stay in our own home and my insurance company just doubled my yearly premium by insuring my home for rebuild cost instead of the amount I selected when buying my policy from them. They did this without asking and just added it on to double the cost for us. This increase will force us to sell our home as we just about make ends meet with our current payments on one very small disability income. This seems so unlawful and cruel and they said I had no choice but accept the new premium, which is is set at coverage that is 3 times the amount owed to band for mortgage. God forbid if the house was destroyed, we DO NOT WANT to rebuild and that should be our choice, not the insurance company's. I am fuming over this ripoff!

Answer given on May 28, 2019

Unfortunately, the purpose of a homeowner insurance policy is to protect you in the event of a major or total loss. I do not know of any insurance company that will allow the policyholder to choose the amount of insurance they want.  This is, in part, due to the probability of a partial loss.  If the insurance is not to the full replacement cost of the home, then a partial loss will be a greater portion of the premium collected on the home. Also, as you have seen in the multiple major fires on the west coast, people were underinsured and did not have enough insurance to repair or replace their homes.

It is unfortunate that the insurance agent or company did not explain the process of insurance on a home.  I’m not sure where you had insurance before this company, but you can shop around as different insurance companies have different rebuilding figures per square foot, so you may be able to find a slightly less expensive insurance policy.  You can also talk to your mortgage company to see if they can obtain a policy on your behalf for the amount of the mortgage.  Either way you should have an option to pay on installments for the policy and therefore spread out the cost of the insurance over the year.

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