Really, Really Need Advice

[Mike8494]

I've had the same insurance company since I bought my house in 2004. In addition to house insurance, I've always had an umbrella policy and an auto and a pickup truck insured with them, as well. All policies are and have always been paid by electronic withdrawals so there have never been any late payments. I have never had any claims, other than for two windshield chip repairs.

Around 6 months ago, I removed my auto from the policy. It is a Tesla and I decided to try Tesla auto insurance. Now, my pickup won't pass smog and I had to put it in "planned non-operation" registration status. When I called the insurance company to take the truck off my policy, they said very tersely that if I removed it, they would cancel my house and umbrella policies.

This is a huge deal. I have a mortgage and must have house insurance. It is a distressing situation, to say the least. I'm in southern California and I know that insurance companies have been hit hard by brushfire losses, but my house is in a very fire-safe and upscale area. Could the location in southern California be why the insurance company is doing this to me? Is this apparent blackmailing legal? The insurance company had always been friendly and helpful in the past, and my account on their website used to have all pertinent documents related to my policies available. Now, the information in my account on their website is very basic and all of those documents are gone. My agent has not answered any of my emails since that fateful phone call, which occurred two weeks ago. (Though I had called my agent, someone else took the call and warned me of the cancellation).

I suppose I will have to dig out hard copies of my insurance policies to see if they say anything about such blackmail, but I can't imagine they would actually say anything like that. In the meantime, I am continuing to pay insurance on a truck that I cannot drive.

I sure could use some insight and advice from someone with inside knowledge of the business.

Thank you for reading, and please help!

 

[adjusterjack]

California has some pretty strict rules about cancelling insurance policies. I suspect they meant non-renewal.

You have a discount for having all three policies with one company. Generally, if you cancel one, you would just lose the discount. But I suppose that your company has no obligation to offer you renewals on the remaining policies once you cancel the auto policy.

I suggest you get your truck fixed and keep your policy.

 

[fed up]

It is not blackmail so drop that idea. Most insurers have guidelines for offering an Umbrella policy, you MUST have auto and home with certain liability limits or there is no Umbrella. If you have auto and home, you can purchase Umbrella. If you drop either auto or home, you cannot have the Umbrella. There are Umbrella only companies out there who will write the business if you no longer qualify for the policy with your original carrier

 

[InsCommentary]

Underwriting and eligibility rules are one thing, mid-term cancellations are another. I know nothing about CA cancellation rules nor, needless to say, what your policies actually say, but it would be rare for independent insurance contracts to be cancellable as you describe. Is the truck the only vehicle now on your auto policy? I wouldn't cancel my insurance until I disposed of the vehicle. Does the Tesla policy meet your umbrella's underlying auto insurance requirement. There is always a danger in placing your insurance with multiple insurers.

 

[Mike8494]

Re: "There is always a danger in placing your insurance with multiple insurers."

I did not realize this before I switched, unfortunately. What kind of "danger" might come about?

For what it's worth, I have never been concerned about whether I kept the umbrella policy or not. I'm just concerned about maintaining insurance on my house. I probably don't actually need PMI since the house is (conservatively) worth over 3x what I owe.

Re: "Does the Tesla policy meet your umbrella's underlying auto insurance requirement."
Unfortunately, I don't know.

This question now comes to mind: Are there any downsides to looking for a new insurer? I feel that my current insurer's customer service has deteriorated to the point that I would prefer to work with a different company.

 

[InsCommentary]

Almost everyone needs an umbrella, but especially if you have considerable assets and income that you anticipate will continue and probably grow over the next 20 years.

Anytime you have a claim that might be covered under policies with different insurers, you run the risk of each one pointing to the other policy.

There are independent insurance agents who have specialized "private client" departments for high net worth customers and insurers that have special products for them as well.

 

[adjusterjack]

Are there any downsides to looking for a new insurer?

No.

I feel that my current insurer's customer service has deteriorated to the point that I would prefer to work with a different company.

Why? Because they are trying to discourage you from doing something foolish: owning a vehicle (the truck) that you don't want to insure?

 

[Mike8494]

For the last 5+ years I've only put 500 miles/yr or less on the truck. The registration cost and insurance cost (and maintenance costs) are not worth it. I would never drive any vehicle when unregistered or uninsured. The insurer's customer service has deteriorated, in my opinion, because they have not answered emails, and they used to, almost immediately.

When I originally got the house insurance, I seem to recall the broker suggesting an umbrella, and asking if I would like to add auto insurance, as well. This is what put in my head the idea that I did not need to have auto or umbrella in order to have house insurance.

 

[adjusterjack]

For the last 5+ years I've only put 500 miles/yr or less on the truck. The registration cost and insurance cost (and maintenance costs) are not worth it.

To avoid the registration costs you would have to surrender your license plates. Are you willing to do that?

I would never drive any vehicle when unregistered or uninsured.

I've heard that many times in my insurance career. Then one day something unexpected happens and you have to drive the truck "just this once" in an emergency or something and THAT's when an uninsured accident happens or you get pulled over for sliding through a stop sign or something else bad happens.

If you want to go without insurance on the truck, surrender your plates, take off the wheels, remove the battery, and put the truck up on blocks. If you are willing to do that I will believe that you will never drive the truck without insurance.

The insurer's customer service has deteriorated, in my opinion, because they have not answered emails, and they used to, almost immediately.

Then take your business elsewhere. That has nothing to do with insuring the truck or not.

 

[Mike8494]

Don't worry, I am going to sell the truck. It is already "registered" as non-operable.

I guess my whole point of this topic is that I had thought, and the replies seem to bear out, that I could obtain house insurance without having to have an umbrella or auto policy. So I was distressed to find that my insurance company would not allow me to keep house, sans auto. I still don't know the "why" of that.