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August 2, 2011

The Hartford Insurance Company - Questionable Rate Increase

Buying insurance, whether it be life, disability, homeowners, auto, etc., is not much different than going to the $500 Blackjack table at the Bellagio in Las Vegas. You put down your five-hundred-dollar purple chip thinking you're going to win that hand. The dealer accepts the bet thinking the house is going to win. You play the hand, and someone is $500 richer.

You do the same when you pay your insurance premium. You're betting something bad is going to happen and you'll retain lots of your wealth because the insurance company will pay for the loss.

But if the insurance company writes the policy and accepts your money, they're betting the odds that nothing will happen and they will keep the premium you paid for the policy.

For the past three years I've had The Hartford insurance company cover my house up here in New Hampshire. I was paying a little over $1,100 per year for pretty much standard coverage. Then the premium started to creep up. Last year I paid $1,435.00.

Over the three years I had no claims. Now you might think that makes a difference. The truth is, it doesn't. Remember, the term of the policy is just like a single blackjack bet. After the hand is over, you start over. The same is true at each renewal of your policy.

When it comes to your past history, for the most part the insurance company doesn't care that during the previous term of the last policy you had no claims. That's old history. They won and you lost. But I digress.

About a month ago I got my premium renewal from The Hartford. There were no changes in the policy. Everything was the same as before. The new premium - are you sitting down: $2,383.00. For those keeping score, that's a 66 percent INCREASE.

I didn't get a call from my local agent Arnie Pierce whose office is in Lakeport, NH. That was a little discouraging. I would think the local agents would get a report of upcoming renewals and what the premium is going to be.

If there is a major increase in the works, I would have thought the agent would call headquarters to find out what triggered the increase so he/she could call the homeowner or lobby with the underwriter at the company to roll back the increase. But maybe that's not how The Hartford works. Maybe they keep their local agents in the dark like mushrooms.

So I started to check the new declaration sheet against the old one to see if something had changed. I couldn't find a thing. But I did notice that they said my house was over 1,000 feet from the closest fire hydrant. I thought about that, and came to the conclusion that was probably wrong.

I had to call my agent Arnie Pierce. Cassie, his wonderful assistant, told me that the reason my premium increased was because my insurance score came back too low and that the house was far away from the hydrant.

I discovered that the insurance score is a blended variable that looks at your credit score and any claims you've had. Isn't that funny? My credit score went UP in the past year because I sold my second home in Cincinnati, OH and paid off the mortgage and the home-equity loan. And I've not had any claims.

So I got out my long tape measure and discovered my house is only 800 feet from the fire hydrant. Well, I'll be. I later discovered my local insurance agent was supposed to come out and verify this when the policy was first written and take photos of the house. That never happened, but I guess that The Hartford was never the wiser. Perhaps that would have come up in a periodic audit.

I then called The Hartford's Customer Service Center and finally talked with Shalla who told me that the fire hydrant error caused the premium to be too high each year by about $262 or so. She said I deserved a refund of that extra premium over the previous three years.

After doing some other recomputing, the best rate The Hartford could come back with was $1,557.00. I felt that was too high, so I shopped around.

I was able to get a better policy from, of all places, The Cincinnati Insurance Company, for $1,140.00 per year.

The Moral of the Story is:

  • Check the accuracy of your Declaration Sheet at the beginning of the policy and each year.
  • REGULARLY shop around for a new premium price. Do this two months before your existing policy expires.
  • Make sure your local agent takes photos and measurements at the beginning of the policy life.

Posted by Tim Carter at August 2, 2011 7:26 AM


Tim, thanks for sharing the insurance information. I will follow your example.

Posted by: Martha Petit at August 4, 2011 11:12 AM

Thanks Tim! I will definitly be checking out my insurance against otheres altough I am very close to two firehydrants and don't believe the policy is wrong on the distance, but will check

Posted by: Brian Marsh at August 4, 2011 11:21 AM

Thank you. That was helpful. I haven't been checking my premium. Our payment comes right out of our checking. I'll make sure to check.

Posted by: Marie at August 4, 2011 11:40 AM

You go Tim,

I did the same. I check every year. And it pisses me off when they use your credit score. What's that got to do with it? It's just another way for them to rip you off. Nuff said!

Posted by: dino at August 4, 2011 11:42 AM

I think Tim we all have stories about homeowners insurance. I live in Florida and have some tales. We have a four-point inspection that is done, structural, electrical, roof, ac/heat. This makes a huge difference in premiums. My house is 51 years old, wood frame, redwood siding. My stated premium before the four-point check for a 1,600SF house away from the water and not in a flood zone was $2,647.00. After the four point check, my premium dropped to $1,742.00. Increasing my deductable to $1,000.00 dropped the premium another $300.00. The county I live in maps all the hydrants and sells a database with the locations to the insurance companies. As you can guess, being in Florida, hurricanes are our waterloo. I try to stay abreast of what all is happening and have a good agent. BUT, the companies do keep them in the dark unless they ask the questions continuously.

Posted by: Don Dresser at August 4, 2011 11:58 AM


Posted by: STAN at August 4, 2011 12:16 PM

We purchased a new house in Oct. 2008 and our insurance was around $450. Each year it has gone up and is now near $700. They told me it is always cheaper with a new house and will go up with age. I just didn't expect 2 1/2 years to be considered "old".

Posted by: Mildred Voigt at August 4, 2011 12:18 PM

Tim, do you also insure your vehicles with The Cincinnati Insurance Company? Most insurance companies offer discounts on home and auto for multiple coverage.

Posted by: Randy at August 4, 2011 12:25 PM

I am in the insurance business and can tell you that the situation you have described is no different than many other products or services you may purchase. Different providers have different prices--and a wise consumer shops. The Hartford is a direct writer and they won't shop it for you however. If you deal with an insurance broker, you then have the opportunity to have your agent do some shopping for you. Get a good agent and you should be happier.

Posted by: Robin MacDonald at August 4, 2011 12:25 PM

Thanks for the article Tim!
I live in Florida and insurance is a nightmare here! It is always good to learn any new info that can help keep the costs down! I agree that even though it is a hassle checking around with other companies is often a good direction to go.

Posted by: bloney at August 4, 2011 12:26 PM

Very good information. Thanks.

Posted by: Stephen Goldstein at August 4, 2011 12:36 PM

WE have had our insurance for a long long time and never questioned the increases. Just thought "It is what it is" I hope to find the time to check my homeowners as well as our auto since they insure all our Rental, autos and our personal home... Thanks for the headsup

Posted by: Don at August 4, 2011 12:37 PM

Thanks Tim, I just renewed my homeowners insurance 3 days ago. This is very good information. Ann

Posted by: Ann Reod at August 4, 2011 12:48 PM

Thanks Tim, I appreciate you sharing this information! Yes, Insurance company's are in it for the money. It's BIG BUSINESS!!! Don't get fooled by all the "WE CARE ABOUT YOU" commercials. Do your homework and SHOP. Brad

Posted by: Brad at August 4, 2011 1:20 PM

Tim, I had a similar situation and same expectations of my local agent. So I switched from my insurance company of 10 years with a minor storm damage to the roof claim to a new company at HALF the rate...go figure. I will go and measure the distance from the hydrant to see if any more money can be back in my pockets. Thanks for reinforcing buyer beware and most important take action.

Posted by: Natalie at August 4, 2011 1:23 PM

Thanks Tim, I appreciate you sharing this information! Yes, Insurance company's are in it for the money. It's BIG BUSINESS!!! Don't get fooled by all the "WE CARE ABOUT YOU" commercials. Do your homework and SHOP. Brad

Posted by: Brad at August 4, 2011 1:27 PM

Whenever I buy anything, I always go to Consumer Reports or JD Power & Assoc. for a rating, and that includes home and car insurance. The top two insurance companies are Amica and USAA (which used to be exclusively for the military - but no longer). I've been with USAA for almost 50 years and have never been disappointed.

Posted by: Stephanie Shine at August 4, 2011 1:47 PM

A similar story from my end involving Allstate. Last year, my premium took a larger than expected jump higher in the amount of $216 for a premium total of $1078. My initial premium three years ago was $706. Called the agent and the increase was due to not being close enough to a hydrant. My house hasn't moved in three years so why the sudden notice of where the hydrant is located. After the agent checked into the situation, I now have a premium of $669 for the same coverage.

Posted by: Paul Loudenslager at August 4, 2011 2:01 PM

Thank you!! I'm definitely checking mine out.


Posted by: Lydia Allen at August 4, 2011 3:24 PM

Hi Tim,
My renewal was denied by State Farm after 33 years and no claims. Reason: I am located in a "potential hurricane zone". Now after shopping around I saved $383 with my new company with an increase in coverage. I am looking for a new auto insurance company since State Farm has no allegiance to me I have none to them.

Posted by: Jack at August 4, 2011 3:26 PM

Thank you for sharing this important information as you always do. I know this is who you are, always helping people. Thanks again for everything.

Posted by: Tom at August 4, 2011 3:57 PM

Great infomation !!Its getting harder to find
a good agent..

Posted by: Ron at August 4, 2011 4:05 PM

I to, was disappointed when I got my auto insurance renewal policy this summer, for no exclamation our auto insurance went up way too much, so we shopped for new insurance and found we saved about 400 dollars by going with Hartford, we are now in the process of switching our
homeowners to Hartford and saving 150 per year. Believe me we will keep watch on this each year, If price changes for no apparent reason, we will go looking again,

Posted by: Katherine Jackson at August 4, 2011 7:00 PM

My agent just had me cancel my Hartford Homeowners Insurance and got me a cheaper policy.

Posted by: Barry at August 4, 2011 7:45 PM

After reading this, I had to write below and it may help some people.
I work at medical billing office.
I would like people to check their medical ins policy carefully and closely. You may be paying for what you don't have to. Many ins co now give you yearly check up without copay. But receptionists do not know much. And they tell you to pay copay. That's just one instance. I know of people paying copay just because they were told to and did not know better. They should have checked policy or call ins co. Do not trust receptionists. Most do not know. Information is power, knowledge is power.
And when you get eob from ins co, check to make sure if they paid correctly and copay is required.
It makes me very frustrated.

Posted by: S W at August 4, 2011 9:20 PM

I check my data every time I renew. My biggest gripe is how the company keeps inflating the 'replacement' value far above what comparable homes are costing. Their claim of replacing costing so much more than rebuilding is wearing a little thin is today's market.
We recently changed agents with the same company and got a $200 reduction on the annual fee.

Posted by: T at August 4, 2011 9:22 PM

I work for an agency where we are dealing with huge increases in the homeowners premiums. We have someone in the office who automatically requotes renewals when there is more than a 10% increase. We aren't perfect but I'm so glad I work for someone whose first priority is to get the best deal for all our clients.

Out of curiosity, I just requoted my home with another company we write with and I had a so-so insurance score. The quote was double what we are payig now. We have no debt other than mortgage and no claims. The insurance score formula is a mystery, even to this insurance agent.

Posted by: Kathy at August 4, 2011 11:09 PM

Hartford raised ours also from over 1,100.00 year to nearly 1,900.00 without any reason such as credit score or claims. We had them since 1993. Went over to American Family Insurance, which does not cover homes in all states or geographical areas with particular concerns. However, we got lucky down here in Ga. to have them. Our home was appraised at nearly 500,000.00, without all the contents, and we now pay barely 600.00 a year. How lucky did we get?

Posted by: rosemarie eipper at August 5, 2011 7:33 PM

We have a 1923 house which was recently appraised for $120,000 The Hartford just raised my premium 46%, from 750 to 1100!! House WITHOUT LAND valued at $330,000!! Personal posessions @ $190,000. I recently got Chap 7 bankruptcy discharge. I am definately shopping for alternate insurance.
Thanks for the comments and suggestions in the comment section.!!!


Posted by: Larry at August 6, 2011 8:40 PM

The best advice is to call a local independent agent.

Posted by: Brian K at August 9, 2011 10:57 AM

Halleluhah! Thank you for reminding me that it IS a good idea to shop around...and when you are a loyal and good customer that you SHOULD get a break. My agent is very helpful and I adore his assistant, but at the end of the day, we are as customers all widgets in a fancy database.

Posted by: Lisanne at August 11, 2011 10:44 PM

Thanks, Tim, for the example. Good education about insurance.

Posted by: Alan at August 22, 2011 12:21 PM
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