Will Insurance Co pay existing claim after cancelling?

[itchibahn]

Had business insurance for years. Then three weeks ago, we had a fire that destroyed the building and contents. All of sudden, within two weeks, they sent changes to my policy increasing the rate from $170 to $875 per month.

I'm considering cancelling the policy, but concerned with existing policy. They've already paid the cost to rebuild the structure, and currently working on content and loss of income. If I cancel the policy, will they still pay on content and loss of income?

Thanks.

[gforaker]

Yes, they will still continue to pay the claim. The adjuster would probably not even know if you cancelled.

I am more curious about the changes to the policy. It sounds like rather than increasing your premium because of the fire, the company found out your business risk was not what they expected. They may have increased your coverage to reflect the true values or found that a rating factor was different than what they had been charging you for. $170 per month is dirt cheap and will not buy a lot of coverage if you have building and contents. If you do talk to other companies, make sure you tell them about the claim and detail the changes to the policy. Maybe they are right and maybe they aren't. You haven't told us the full story.

[itchibahn]

I've had the policy for 18 years, when the business was first started. Of course, I took whatever advice from the agent for coverage amount. The business grew, inventory grew, but never updated the policy because I never given a thought of it and no one told me to make changes.

18 years ago, it actually started around $130/mo. Then gradually increased to $170/mo. So the coverage didn't grow either, now I'm faced with max inventory coverage which is less than half what is worth.

I can't afford $875/mo for insurance. So I've considered cancelling it, but wasn't sure.

Thanks for the info.

[lonestar]

"The business grew, inventory grew, but never updated the policy because I never given a thought of it and no one told me to make changes."

Itchibahn, sometimes we don't like to hear the truth, but like it or not, it is your responsibility to contact your agent and update your coverages each year, as your needs change. Many customers do not want to do this, because increased coverage needs means an increase in rate/cost. Of course, in hindsight, it would have been nice for the agent(as a courtesy) to check in with you every few years, but that is optional on his /her part.

If you are not able to find a better rate very soon, you will want to hang onto your current policy like grim death. A claim like this on your record will prevent you from obtaining a preferred rate for a few years, and could prevent you from obtaining a policy at any rate through some carriers for a while.

[d's insurance store]

I don't usually make the effort to pile on, but in this case I just can't resist.

So, Itchibahn, for the past decade, you've presumably received renewal offers with coverage listed in dollar amounts that were far less than you knew you had, and you never once thought that something might be off? And your reasoning is 'no one told me to make changes'?

And now, in the aftermath of a underinsured claim, you're still not communicating with your agent when presumably changes have been made retroactively to reflect proper insurance values? Your response to a massive rate increase is to land here, on an internet forum and ask for advice? Contacting the current agent or agency to get even a minimal answer to a valid question hasn't yet entered your mind?

There are ways to mitigate rate increases due to larger insurance amounts, and the easiest way is to adjust the deductible higher, but with limited respect to the circumstances, if your 18 year old business, which by your admission has grown in size and scope cannot afford insurance, and you've never made an effort to keep current and maybe even shop for more comprehensive coverage, then perhaps you fall into that category that should just go without coverage.

Just one quick admittedly sarcastic question before I go...is your business still using dial phones?