Homeowners Insurance Company Scam Uncovered
Post Date April 26, 2013 – A lawsuit was filed recently against State Auto Insurance Company saying the Homeowners insurance company is charging for phantom Homeowners Insurance Rates to it’s customers. A Homeowners Insurance customer in Kentucky filed a lawsuit siting that his Homeowners Insurance Company has been illegally raising his homeowners rates. The Homeowners Insurance Policy owners was surprised to find the $235,000 in coverage for his home had been increased. After calling his insurance agent, the customer was advised his homeowners insurance policy property limit had been raised by his insurer. The Property limit is the amount his homeowners insurance company will pay if his home in a fire or weather event, excluding a flood. In the complaint; the property coverage limit was raised from $330,000 to $503,000.
Homeowners Insurance Phantom Premium Scam
The scam is called phantom insurance. Any homeowners insurance carrier which has suffered enormous claims will seek to recover from it’s claim losses through raising it’s revenues. They raise its revenues through increasing the coverage limits and amounts that their consumers will pay for. The lawsuit also states other clients of the insurance company have been paying extra for their Homeowners Insurance premiums but are not receiving any benefit from their coverage. although a customer pays for $500,000 in coverage limits for his home, the insurance carrier will only pay for $240,000 if the house will be destroyed.
The claimant and his lawyer are researching if their case be refiled as a class action law suit with the belief that there are other Homeowners Insurance clients across the country may have been experiencing the same scam. The biggest problem with the Phantom Premium Scan is, most clients are unaware that their homeowners insurance has increase as some of them use escrow accounts to pay for their coverage.
Michael E. Dortch
President & Senior Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania 19446
(800) 807-0762 ext. 206