Report: #1013037

Complaint Review: Foremost Property and Casualty Insurance Company

  • Submitted: Tue, February 12, 2013
  • Updated: Tue, March 05, 2013
  • Reported By: Katey55 — United States of America
  • Foremost Property and Casualty Insurance Company
    5600 Beech Tree Lane
    Caledonia, Michigan
    United States of America

Foremost Property and Casualty Insurance Company Exorbitant premium increase without explanation Caledonia, Michigan

*Author of original report: Where to Start? How About with Some Facts?

*Consumer Comment: Shop Around

Show customers why they should trust your business over your competitors...

My manufactured home has been insured with Foremost Property and Casualty Insurance Company since it was new in the spring of 2006.  In 2012 I paid $393 annual premium.  Recently, I received notice that the annual premium for 2013 would rise to $558, which is an increase of 42% from 2012.  At the same time, there has been only a 2.7% increase in coverages from 2012 to 2013. 

I asked for an explanation of the exorbitant increase, and in reply I received a patronizing letter restating the annual coverages from 2006 through 2013, and the annual premiums from 2006 through 2013, (information I already had in my records) completely glossing over the exorbitant increase from 2012 to 2013.  The writer claims that "It is never easy to make a decision to establish the price's [sic] for our policies..." 

I would have thought some science would go into that decision - sounds like Foremost is just flipping coins or drawing numbers out of a hat.  The writer goes on to say that the company tries "to keep our expenses, like postage and utilities, under control so we can minimize price changes."  Postage and utilities have risen over the last year, but not by 42%.  Finally, the writer states something about "steadily increasing losses."  Well, not in my neighborhood. 

Seems to me I am in a relatively low-risk area with relatively low premiums, which is as it should be.  But because my premiums are relatively low, I am also a good target to pick up the tab for the company's losses elsewhere, e.g., hurricanes?  Also seems to me the company did not charge enough in high-risk areas to cover those (foreseeable) losses.  I'd like to know whether Foremost is now stepping up to the plate to pay those losses?  Or are they denying claims while raising premiums based on those claims?

Seems to me the company is just poorly-managed.  Fortunately, I have a couple of months until the policy renews, so I can and will shop around.  I do not have a mortgage on the home, so carrying homeowner's insurance is optional.    Probably better to let the coverage lapse than to continue paying an insurance company that cannot cover losses.
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#1 Author of original report

Where to Start? How About with Some Facts?

AUTHOR: Katey55 - (United States of America)

Where to start? How about with some facts.

First. I do not live in a mobile home. The manufactured home insured by Foremost is my vacation home and it is insured as such. I own a residence which is insured by another company, and that company definitely does explain every rate increase to my satisfaction. That company also quotes my vacation home every year, and this is probably the year they are going to receive my premium dollar. The group to which I belong? AARP which touts its mobile/manufactured home insurance program through Foremost - and probably one of the largest groups.

Where did you get the idea that manufactured/mobile homes are more likely to be destroyed in a
disaster? You may have hurricanes in Raleigh, but we do not have them here. The two main risks we have are forest fires and tornadoes. Stick built are just as vulnerable to both, and cost a great deal more to replace. Replacement cost on my manufactured home is 1/3 the replacement cost on my residence, yet with the 42% increase, the premiums are comparable.

Before I went to law school, I worked in several insurance companies, and believe me, I understand how they work. That is why they do not get my premium dollar unless they account to me for every penny they charge. I once recall an insurance executive stating that insurance companies are in the business of selling insurance, not the business of insuring risks.  In other words, insurance companies are in the business of collecting premiums, not the business of paying claims.

Second. Foremost is not a small company when it comes to insuring mobile/manufactured homes.  Foremost is the largest insurer of such homes in the country. If Foremost were truly passing along excessive losses to all policyholders, they would be imposing an across-the-board 42% increase in premiums, and if Foremost were imposing an across-the-board 42% increase in premiums, it would be national news. Do some research: it makes the news when an insurance company has to impose a 15% - 20% increase due to losses. Yet double that has been overlooked by financial analysts? Not likely.

The only point you got right is that insurance companies are not charities, so where does thankful
fit into this equation? I ask the company for an explanation of the charges pursuant to a contract, and in reply I receive whiny, mealy-mouthed letters about needing money because of losses they suffered. Tough
luck, I did not cause their losses and am not moved to donate to their cause.  Btw, the premium is $558 (not $500) an increase of $165 over last year. Things are cheaper here than in Raleigh.

You sound as if you worked in the insurance industry, and if you have not already retired, it
is high time you did. Thanks to the internet, the days when policyholders could be expected to remain stupid enough to swallow the BS in your response and just keep on paying premiums are long

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#2 Consumer Comment

Shop Around

AUTHOR: larrymcmasters - (United States of America)

Where to start.

No insurance company is going to tell you why your rates went up. It is what it is. Shop around and do business with another company.  You have to understand, insurance is based on statistics not individuals.  They do not care who you are, they only care what group you fall into.

First you live in a manufactured home.  They are more likely to be destroyed in a disaster.  Since you are not with a large company you have already figured out most companies do not want anything to do with your type of house.

Second it does not matter whether losses were "in your area".  They are the companies  losses and all policyholders are going to pay for them. 

Third, Insurance companies are not charities.  People seem to forget that.  They are businesses that have shareholders they are responsible to.  If you want a charity then start an insurance company and run it any way you want to. 

Finally, complaining about a $500 insurance premium is pretty lame.  For the type of risk you have that is a very low premium.  Be thankful

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