Insurance Companies and Banks

What’s the Difference Between Them?


You have seen this guy – Right?

Like the Big Bad Banks, State Farm is there to take policy-holder’s money month over month, year after year. As long as the money is collected … all is well in the word of banking and insurance.

But wait until … until a homeowner can no longer make their mortgage payments to the lender or an insurance claim is filed. This is when a borrower and policy outlive their useful life with their beloved lender and insurance company.  This is when lenders will foreclose on a homeowner without a real, honest, true effort to help. This is when the insurance underwriting department will unilaterally cancel a policy.

One of my first-time home buyer clients reached out to me the other day asking for help.  The condo she purchased closed escrow in March 2009.  My client took my recommendation to get a home and termite inspection and we ordered a home warranty.  My client also took my recommendation to contact my State Farm insurance agent for an insurance.  I have been confident in referring clients to State Farm because I have had State Farm Insurance for over 30 years. I have always received great service – even after filing a claim.

While my client was out of the Country on business she learned from a neighbor that her condo was flooding.  Turns out the water heater “blew.”   I assisted my client on that morning in filing a claim with State Farm and getting the restoration company on site within hours.

My client recently received a 60 day notice of cancellation of the policy from State Farm.  Apparently this was a decision made by the underwriting department.  It was determined that the policy-holder was negligent and that she somehow knew the water heater was old, corroded, and needed replacing when she bought the condo.

The assumptions of the underwriting department are seriously flawed and simply untrue. I am present during all inspections.  This is a great opportunity for me to complete my Agent Visual Inspection which California Agents are required to perform pursuant to Civil Code ____.

The home inspection report did not “call out” the water heater as old, corroded, rusted, leaking or that it should be replaced.  If that were the case, my client would most definitely have replaced it.

My clients know that they can call upon me for anything. Now, nearly two years after my client closed escrow on her home, I am personally working to have the decision to cancel the policy … reversed. This will be a big pay-it-forward effort.  I have already spent several hours on this project. If my client’s policy is canceled, she will be paying a lot more MONEY for “high-risk” insurance.  Cancellation of an insurance leaves a homeowner with a stigma similar to foreclosure.

The “fight” with the insurance company, State Farm, is well worth my time and effort. It is the level of service I provide to my clients in appreciation for their trust and business.  Service does not stop when escrow closes. Just as service should not stop when an insurance claim is filed or a homeowner can no longer make their mortgage payment and needs help to avoid foreclosure. I will work with the State Farm just as I work with the Big Bad Banks in negotiating short sales.

I will post an update on the outcome. What do you think?  Will State Farm reverse the decision to cancel the policy?

Insurance Companies and Banks – by Kathleen Daniels, San Jose Real Estate Agent


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