Property Assessment

You're paying how much for your home and auto insurance? here's your big chance to cut those premiums down to size.

IF YOU'VE HAD TROUBLE getting insurance in the past, you can still get a second chance at coverage on the cheap. The market has become so competitive among insurers that they are sometimes willing to overlook the sins that have traditionally sent your premiums soaring.

Insurers still frown at a bounced check or two, but a soiled credit history doesn't always mean higher premiums. Adam Halperin, a 34-year-old retirement-benefits specialist in Houston, ran into problems keeping up with his bills eight years ago, when he hit a period of unemployment after he went back to college, but he's since cleaned up his act. When he bought a condo this spring, Allstate and Nationwide thought his past record made him too risky, and neither would insure him. Riled, Halperin asked an agent at Nationwide for advice. The agent told him to try Farmers Insurance, since the company didn't put emphasis on an applicant's credit history. After a brief review, Farmers decided Halperin had turned things around and agreed to pick up his policy.

Even if you have a bad driving record, there's an insurer somewhere who'll give you a deal. After James Patchen of Cordelia, Calif., racked up three speeding tickets, he and his wife, Christine, thought they would always be saddled with $2,052 in annual premiums to Farmers for their Ford Windstar minivan and Toyota truck. "Farmers said our rates would go down after (James's) tickets (were no longer part of his driving record), but every time I asked them about it, they would make the expiration date later," Christine recalls. Exasperated, she checked into rates at State Farm and found that it would give her husband a clean slate. The Patchens now pay about $900 a year for insurance, a savings of more than 56%.

Perhaps the most frustrating of auto-insurance dilemmas is your teenage driver, whose biggest accomplishment so far is spiking your auto rates. Even the enormous competition among insurers hasn't produced a company willing to let you slide on this one, but there is plenty you can do to lower your premium. Insurance consultants insist the best way to insure Junior is to buy him a jalopy and list him as the primary driver. Some insurers, including Farmers, will knock 10% off your premium if Junior passes driver's ed, while other underwriters such as Safeco will hack off another 10% to 20% if he maintains a B average in school.

Insurers are becoming more forgiving of some of your transgressions, but they are cracking down on others. Carriers are so eager to cut their losses that two or more claims or moving violations within three years is enough to get you "nonrenewed" ? insurance broker lingo for canceled. It's best to pay for small home repairs yourself, or you could wind up like Etsuko Suzuki. She started insuring her home in Seattle with Safeco in 1994. When a windstorm last year knocked down her fence, Safeco paid for repairs. And when sparks escaping from her grill charred a small section of Suzuki's deck, Safeco paid to fix that, too. "But this year," she explains, "I got a cancellation letter from Safeco, they said two claims in one year was high risk and they won't renew my contract... If I'd known they were going to drop me, I wouldn't (have made the claims)."

Suzuki's still paying for her mistake: Now she's a substandard risk, which means most companies won't insure her. She finally found an insurer, Griffin Underwriting Services, but her premiums have skyrocketed to $1,500 a year ? three times what she was paying with Safeco ? and that's with a $2,500 deductible.

Your insurer is just as likely to drop your auto coverage. What's the occasional dent here and there? Plenty. Just ask probate attorney Joel Blackman. For seven years, he paid Nationwide some $2,500 in annual premiums for insurance on his two cars and two motorcycles. That all changed when he bumped his car into a beat-up Volvo in a parking lot near his home in Marin County, Calif.

The other driver's claim was $1,100 ? so small, Blackman says, that Nationwide never bothered to send an adjuster to investigate it adequately. But about a year later, Blackman received a letter from Nationwide stating the carrier had decided to "nonrenew" him. An agent explained that Nationwide was giving his parking lot scrape the same weight as a full-fledged accident, and that, plus a speeding ticket, made Blackman too risky to insure. "Why bother getting insured if it's over as soon as you file a claim?" Blackman sputters.

As you start shopping to insure your home, it's crucial that you have a clear sense of what you need ? and to refuse to let your insurer make that call for you. Trudi and Keith Hall were infuriated when their insurer boosted the value of their house in Mobile, Ala. When their home-insurance renewal notice came this summer from Travelers, they found their premium had been hiked almost 40%, to $1,397. Trudi's agent told her that a Travelers adjuster had blown up her policy with a "drive-by appraisal." Without entering the property, the adjuster eyeballed the house and figured that it would cost some $225,000 to rebuild-including $20,300 to rebuild "other structures" on the Hall's property. The Halls have only one "other structure:" a swing set. "My five kids are real excited to see what kind of swings they can get for 20 grand," Trudi muses. Travelers told the Halls there's nothing they can do ? so they're shopping for another policy.

When you check out a homeowner's policy, be leery of the footnotes attached. To be covered in a flood, you have to buy a separate policy from the federally supervised National Flood Insurance Program (800-427-4661). The average policyholder pays about $350 a year for $125,000 worth of coverage, but the plans aren't quite that simple. For you to get a nickel from the plan, the flood has to damage two adjacent properties. Regardless of how big the flood, the policies never pay for damages to family heirlooms stored in a basement.

Even if you live in an area prone to temblors, earthquake coverage usually isn't worth the cost. If you live in California, your policy will usually carry a 15% deductible on the replacement cost of your home for earthquake damages. That means you won't see a penny from your insurer until you spend tens of thousands on repairs, a threshold you'll reach only in a major earthquake. When a temblor measuring 5.2 on the Richter scale recently shook the Napa Valley, 2,800 people had earthquake insurance but fewer than 10% had claims that were large enough to get any money back.

There's really no substitute for knowing exactly what it is you're buying. Not only will it help to keep you from overpaying, it will help you get the most out of what you buy. When Lisa Lauenberg bought a new condo last spring in Kirkland, Wash., she knew enough to trim her homeowner's premium by asking for a home-and-auto discount. Her new home also put her less than a mile from her job at a paging company, so she lobbied hard and got a discount for drivers with short commutes. "Hey," she says, "you have to be persistent to get what you want." You can't argue with the payoff: Lauenberg shaved $250 a year ? more than 25% ? off her premium.

Staking Claims
The next time your insurer rejects a claim, don't get angry, Get results. Force the company to pay it.

When a recent hailstorm clobbered Fort Worth, it did near-Texas-size damage to Pat Stevens's car. She was shocked at the number of deep dents and pockmarks, but her biggest surprise was yet to come. Stevens's insurer, Geico, agreed to pay only $726, even though mechanics had told her the repairs would cost four times that amount.

Stevens got nowhere with Geico's bureaucracy. But that changed after she complained to her state's insurance regulators. The Texas Department of Insurance leaned on Geico, and the carrier agreed to have the damage reappraised, saving Stevens nearly $2,000 in repair expenses.

If your home or auto insurer is refusing to pay all or part of a claim, you can fight back and win, just like Stevens did. The trick is to follow a few simple steps.

Your first line of defense is to document everything. If your car or home is damaged and you decide to make a claim, get written copies of police or fire department reports, and of appraisals made by outsiders. Consider this ammunition, so you can prove that your claim is legitimate.

If a claim is challenged, complain to your insurer first, and don't take the first negative answer as final. Make it clear that you'll go to your state's insurance regulators if you're not given your say. (To get the number of your state's insurance department, log on to the National Association of Insurance Commissioners Web site.) Many states publicize each company's complaint record, and "sometimes companies will act appropriately to avoid the embarrassment," says Douglas Heller of the Foundation for Taxpayer and Consumer Rights in Los Angeles. Heller adds one caveat: Many home and auto policies impose a one-year time limit on legal challenges to claim decisions ? and the clock starts as soon as the first decision is made. If you don't have an answer within a month of your complaint, it's time to go to the state.

Once your state regulator looks into your complaint, insurers usually have six weeks to resolve the dispute. Unfortunately, unless your insurer broke the law, most state regulators lack the authority to force a resolution. The only avenue left is a lawsuit, and that's seldom worthwhile. Contingency-fee attorneys, who get paid only if you win, take on insurance cases. But "for the $1,000 and $2,000 complaints, if an attorney has to put in 40 hours of time to get her cut, she'll say, 'This doesn't make sense to me financially,'" says Heller. That kind of investment may not make sense to you either ? and that's when it's time to find a new insurer.

-- By Matthew Heimer