Wednesday, April 29, 2009

State Farm Insurance

I cannot give you an endorsement, nor can I be critical of State Farm. I have never had a homeowners claim in my life, and I've had several car accidents, but those were years ago. I do know that my treatment during my recent experience has been excellent.
We've had a mobile home, a manufactured home is the parlance, for 17 plus years just out the back door of our log cabin. It was purchased when Terry and I got married to provide a home for her kids as our log cabin was not large enough. It has been empty for a number of years now and provides a refuge for Terry when I'm watching football in the fall, or for me if Terry's into one of her old movies I'm not into. Guests stay in the trailer as it has two nice bedrooms and provides a significant amount of privacy and comfort for those infrequent visitors.

My daughter Jenny and Granddaughter Lindsey last stayed in the trailer over Easter weekend earlier in April. Several weeks before their visit I had replaced the kitchen faucet and had installed a new type of connection fitting. I didn't like the fitting. It is a compression type and I saw no positive restraint to the pvc supply hose, however I got it to work and it held for about a month until sometime in the middle of the night.

I woke this morning, 4/29/09 at 5 AM and headed downstairs to make coffee. I heard a loud gushing sound that was not rain. I opened the back door and heard the water pouring out of the trailer. I know right away what had happened. I shut the water off to the trailer and came back in and made coffee. Terry got up and we started to move stuff and vacuum up water using an old shop vac that I've had for some 35 years. The little vac sucked up water quite well. However, when I shut the vac off to empty it I discovered it had two little leaks in the bottom from years of use. As long as the vacuum was on the water stayed in. As soon as I shut the water off it gushed out. Terry emptied the cupboards. Then she found her floor scrubber and used that to suck up water from the kitchen.

I went to Lowe's and bought a new shop vac that would just about suck up the world. Then I called State Farm. The local agent's office was closed, however I got a message center that logged in my information and entered a claim number for me. Since that time the service has been excellent. Jason, the State Farm rep provided me with the name of a "mitigation" service that is here now tearing out carpeting and flooring to dry the place out. State Farm will pick that tab up, less my deductible of course. The adjuster should be out in a few days to evaluate the damage and then we will go from there.

Some tips about homeowners insurance for a manufactured home. Homes over 5 years old will not be insured for replacement value. State Farm will only pay off on the cash value of the home. However, I greatly underestimated the value of my home. I had thought it would be just a couple of thousand dollars. I did an little internet search and found some mobile homes that were older than mine and were for sale for $10-15K. The value of my policy is $29K. I thought about canceling the policy at first, but then I thought about reducing the policy down to an estimated cash value. I did neither. As a result, State Farm will make repairs to the home in the amount of the insure value, not the cash value. So it looks like I will get new flooring, carpeting, etc for the cost of my deductible.

This does leave one with a quandary. I've been paying over $500 annually for the insurance. I've felt that it was over priced for a trailer, excuse me, manufactured home. I had to maintain the insurance as the trailer was part of the collateral on my property for mortgage purposes. When I paid off the property I was considering canceling the policy. In fact, I had told my insurance agency to go ahead and cancel it. Then, as an after thought I realized I had a home equity line of credit with the property as the collateral. So I called the insurance agency and left a message because I did not know if I had to carry insurance for the line of credit. As a result, the lady I work with at the agency did not execute the cancellation order. Whew!

The other quandary though is, should you maintain your insurance policy at a higher value than the cash value of the trailer? It does not make good business sense, and I'm not sure I still understand the philosophy of State Farm that says if the trailer is destroyed they will pay off cash value, but if repaired they will pay of the face value of the policy. Regardless, I'm very happy no action was taken on the policy. It looks like we will come out OK.

I would say State Farm has done a good job and I appreciate it.

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