Pretty much everyone with a mortgage has a home insurance policy. One in 20 of us will file a claim this year. Many of those claims will go smoothly — as long as we’re working with a reputable home insurance company. Some will drive policyholders to the brink of bankruptcy and beyond.
The problem is, many insurance providers don’t show their true colors until we’re in a jam. Customer service isn’t necessarily a concern with, say, a terrible home security camera. With home insurance — where fair and timely claims filing can spell the difference between a house and a ruin — it’s everything.
So which home insurance companies treat their customers like doormats? I’ve got three of them for you that you should avoid at all cost. I’ll follow that up with three of my favorite home insurance companies this year along with a checklist you can use when you’re choosing your next home insurance policy.
#1: Mercury Insurance
This mom-and-pop insurance company doesn’t always treat its customers like mom and pop would. Mercury’s Better Business Bureau (BBB) rating is a solid A-, but customer complaints are pretty unanimous, accusing Mercury of everything from price gouging to sending hostile adjusters to “sitting” on claims.
Claims-sitting, a particularly hideous tactic, is when an insurance company refuses to act on a claim for so long you eventually throw your hands up and walk away. Not exactly the kind of people you’d want to be working with if a hurricane mowed down your home.
Mercury also has a reputation for stingy payouts. According to some public adjusters, Mercury’s reputation for lowballing estimates is so bad, contractors won’t touch a house if Mercury is covering it.
Need any more reasons to stay clear of this company? Didn’t think so.
#2: Pacific Specialty Insurance
There are three Pacific Specialty Insurance companies listed on the BBB’s website, and they all get F’s. Let’s see why.
“Undermined,” “insulted,” and “disrespected” are not how you’d want to describe yourself after a meeting with your insurance adjuster. Remember, if you have to call an adjuster, you’re in a bad place anyway. Pacific Speciality seems to leave a lot of folks feeling bad.
The company has been accused of everything from bad communication to opaque policies to lowball estimates (a common thread here). But as the customer complaints from above show, this company really strikes out in the adjustment department.
Weirdly, Pacific Specialty is a breath of fresh air compared to the final company on our list.
#3: Citizens Property Insurance
Citizens Property Insurance isn’t BBB accredited. It’s also the only choice for many residents of coastal Florida. If no one else will cover you, Citizens will. Not out of the kindness of their hearts, though. Complaint after complaint suggests Citizens simply doesn’t pay out, not even — according to one very vocal public adjuster — “if a meteor comes in from a hurricane and gets whooped onto your roof.”
Like I said, finding decent home insurance in Florida is no cakewalk. You’re already paying through the nose just to own a home there. It takes a special kind of callousness to shortchange and ignore hurricane and flood victims paying upwards of $2,000 per year for the privilege of watching their homes float out with the tide.
Up top, I mentioned that Citizens isn’t BBB accredited yet. Let me give it an honorary rating for the people of Florida: F-.
This Is What Your Home Insurance Company Should Offer You
Easy Claims Filing
Living through a disaster or theft is going to stress you out big time. The last thing you want is to realize that your insurance company has made it almost impossible for you to file a claim or receive a fair payout. When you’re searching for home insurance quotes online, research “claims filing” first.
People-First Attitude
Your insurance company is supposed to be in your corner. Unfortunately, some companies, even big ones, are in the shareholders’ corner. How can you tell? Head over to J.D. Power to check out its latest home insurance customer satisfaction survey. Aim for a company in the top five.
No Jargon
Heaps of language you can’t understand is fine for the IRS, but not for a document upon which your family’s health and safety depends in an emergency. You can get a sense of how customer-centric a potential insurance provider is by how clear or muddy its contracts are. Shoot for clarity and easy-to-read language.
Customer-Friendly Home Insurance Providers
Lemonade
Lemonade tallied up all the problems with traditional home insurance and decided to do the exact opposite: offer cheap, friendly, transparent coverage for whoever wants it. If that sounds like your cup of, ah, lemonade, here’s our Lemonade review.
State Farm
State Farm has been around forever. The proverbial “good neighbor,” it has a huge network of flesh-and-blood agents throughout the U.S. But State Farm’s biggest draw is probably its rock-bottom home insurance and auto bundles, making it one of the cheapest home insurers on the market. Curious? Check out our experience with State Farm.
Nationwide
Nationwide is on your side. You’ve heard it a million times. But is it really true? We think so. Nationwide has competitive, highly customizable policies you can tweak online before committing to. It’s also a good choice for homeowners looking for incentives to go smart, which is a lot of us these days. Read more about Nationwide’s plans and policies in our complete Nationwide buyer’s guide.
Recap
If you think you’ve had a bad day, just wait until a storm blows the roof off your home. Knock on wood that doesn’t ever happen to you. But if it does, you’re going to either be thanking your lucky stars that you did your research and found a friendly, fair home insurance provider or you’re going to be pulling your hair out, begging for the money you need to fix your home (and maybe not getting it). If you do put in the legwork and stay clear of the bad apples, hopefully, it will be the former.
