Farmers has used the aging rate of roofing for years, when the agents use it properly it works, where is doesn’t work is with agent ethics breakdown. but that is another story.
From what I have analyzed on Farmer’s policies over the years, it appears many of the agents writing the coverage are as dumb as a doorknob. The valuations are low, they write low limits on Personal Liability and the policies are plain vanilla. They also seldom have Jewelry scheduled, even on nicer homes with wealthier clients. They tend to just be written on price instead of coverage. The customer is just amazed when I point out the discrepancies.
Sounds like you actually do a service to your client by selling the client on the differences in coverage and not just selling price. I completely agree with you, I often experience the same thing.
The biggest change is this product is for any roof over 10 years. Allstate want to go to ACV coverage and not RC. I hope it works for them, but any company trying to make this sort of change in the past has backed off since no one else followed.
This may not control their costs. I actually had a customer with a 5 yr old roof hit by major hail damage requiring new roofs two years in a row. I would never buy a home policy without RCV on a roof nor would many of my customers unless they knew the roof was nearing it’s end of life anyway.
Historically, most carriers have paid ACV on the initial loss and when it is verified that roof has been repaired or replaced, they pay the remaining amount. Any carrier who wants to deal with customers after a huge depreciation is taken does so at their own peril. This may test their Customer Satisfaction guarantee for claims. Will the customer be refunded their premium if they are not happy with their settlement like they do on the auto?
With roofing cost tripling in the past decade there is no other option but to start doing this. If they don’t then they must double the premiums overnight to stay profitable. This is already solid practice in several states.
The vast majority of roofs companies insure do not have claims on them. Roofs are now made to be much more hail resistant than the old composition roofs of the past. To penalize all their customers by applying ACV and depreciating them greatly will drive the customers away to markets offering Replacement Cost. Frankly, I hope they do this so we can pick up more of their business. Allstate has made a lot of wierd moves in the past year and their agents are not happy campers. I wouldn’t want to be one of their agents trying to explain how little the settlement is on a loss after depreciation and deductible.
Good luck Allstate if you apply additional roof surcharges in addition to taking rate on the renewals. Another thing they do is write a plain vanilla HO-A and sell it as comprehensive coverage. Their Replacement Cost guide is a joke and they lowball the values and call it Replacement Cost. All they do is sell a price and the Homeowner is caught unaware until the claim happens. It is an E&O waiting to happen.
Why not keep RCV but add a $75 dollar policy fee for annual roof inspections? The carrier would know about any roof issues and can make sure they get repaired. Inspectors would be happy too.
So now the age and condition of the residential roof factors into the rate? How are they going to verify/judge that? What about flat roofs?
Farmers has used the aging rate of roofing for years, when the agents use it properly it works, where is doesn’t work is with agent ethics breakdown. but that is another story.
Kind of like every truck on a commercial auto being light, local, service.
From what I have analyzed on Farmer’s policies over the years, it appears many of the agents writing the coverage are as dumb as a doorknob. The valuations are low, they write low limits on Personal Liability and the policies are plain vanilla. They also seldom have Jewelry scheduled, even on nicer homes with wealthier clients. They tend to just be written on price instead of coverage. The customer is just amazed when I point out the discrepancies.
Sounds like you actually do a service to your client by selling the client on the differences in coverage and not just selling price. I completely agree with you, I often experience the same thing.
The biggest change is this product is for any roof over 10 years. Allstate want to go to ACV coverage and not RC. I hope it works for them, but any company trying to make this sort of change in the past has backed off since no one else followed.
I have a feeling this time is different.
This may not control their costs. I actually had a customer with a 5 yr old roof hit by major hail damage requiring new roofs two years in a row. I would never buy a home policy without RCV on a roof nor would many of my customers unless they knew the roof was nearing it’s end of life anyway.
Historically, most carriers have paid ACV on the initial loss and when it is verified that roof has been repaired or replaced, they pay the remaining amount. Any carrier who wants to deal with customers after a huge depreciation is taken does so at their own peril. This may test their Customer Satisfaction guarantee for claims. Will the customer be refunded their premium if they are not happy with their settlement like they do on the auto?
With roofing cost tripling in the past decade there is no other option but to start doing this. If they don’t then they must double the premiums overnight to stay profitable. This is already solid practice in several states.
The vast majority of roofs companies insure do not have claims on them. Roofs are now made to be much more hail resistant than the old composition roofs of the past. To penalize all their customers by applying ACV and depreciating them greatly will drive the customers away to markets offering Replacement Cost. Frankly, I hope they do this so we can pick up more of their business. Allstate has made a lot of wierd moves in the past year and their agents are not happy campers. I wouldn’t want to be one of their agents trying to explain how little the settlement is on a loss after depreciation and deductible.
I believe Allstate said they will continue to offer RC for a surcharge.
Good luck Allstate if you apply additional roof surcharges in addition to taking rate on the renewals. Another thing they do is write a plain vanilla HO-A and sell it as comprehensive coverage. Their Replacement Cost guide is a joke and they lowball the values and call it Replacement Cost. All they do is sell a price and the Homeowner is caught unaware until the claim happens. It is an E&O waiting to happen.
Why not keep RCV but add a $75 dollar policy fee for annual roof inspections? The carrier would know about any roof issues and can make sure they get repaired. Inspectors would be happy too.