Report: #791917

Complaint Review: Nationwide Insurance Co.

  • Submitted: Tue, October 25, 2011
  • Updated: Tue, October 25, 2011
  • Reported By: Marilyn — Spokane Washington United States of America
  • Nationwide Insurance Co.
    1200 Locust St.
    Des Moines, Iowa
    United States of America

Nationwide Insurance Co. #91 year old woman pays 325,000 overestimated value on home insurance for 30 years, # Nationwide did not bill myself after drawing up contract, and cancels without notice. Des Moines, Iowa

*Consumer Suggestion: Premium Fraud- Over Valued Risk

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My family have been faithful members of Nationwide Insurance for  approx. 20 years and my 91 year mother for around 30. We have had both home and auto on may vehicles and several homes. One year ago my mother had a massive stroke, and I became her power of attorney. After investigating her statements, and talking to several agents, they told me she had been paying insurance for a 415,200 home value, when actually only valued at about 75,000 home for 30 years. Value of her home has doubled to 150,000 now, but still much higher than should be.

THEN, they drew up a new contract for my mothers home, authorized it, and emailed to me since I now live in the home with my husband. I never received a bill on this, and still have all the copies of original contract. I called them approximately two months later, and they said it was to cancel in about a week. They would not extend the contract, and were quite nasty. I called and talked to several agents, all passing it to someone else.

The last agent Clyde Maples finally talked to an underwriter, and confirmed they would not extend their boundaries even though I had sent many pictures, was getting work on it to please them, which they never required before. If we had been new or bad members, I might expect this from an insurance company, but we have been faithful, and always paid our bills. I am confused and they give no reason why they did not bill, just notice of cancellation, and I don't know what to do.

Thank you for listening to me,

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#1 Consumer Suggestion

Premium Fraud- Over Valued Risk

AUTHOR: ClaimAdvocate - (United States of America)

There are several issues at hand. As a 40 year Executive Claim Adjuster, now a claim advocate, I wonder why they non renewed your policy? for non payment of premiums? increase in risk ? your mother no longer lives in home and you would need to be a new named insured under a new policy if you now have an insurable interest in the home are few issues. 

But the more important issue is over valuing the risk for many years and overpaying premiums of some 50% for decades? ? . This is done by unscrupulous agents who get more commissions for a large account. The insurer does not normally set your value, the independent agent does. Your gripe is with the agent. If Nationwide, who uses independent agents, set the value and told you based on the reported square feet of ground floor area to be insured set the value, then you need to file a complaint with the Dept of Insurance and ask for assistance and investigation into premium fraud manipulation. Who set the Replacement Value of your home. Remember, its not insured for the market value? Insurance is based on what it costs to rebuild new under an all risk HO3 policy which is the most sold type in the world. The market value fluctuates up and down, mostly down now, so dont ever carry the market value of your home, after a fire you will be grossly under insured and not able to rebuild fully. 

You could file an Errors and  Omissions (mal practice) claim against the agent by simply sending him a letter and asking him to forward onto his  E&O carrier to call you. You can then deal with his insurer and file a claim for the agents error in setting the values. If you claim he did it intentionally or fraudulently, they will deny the claim as they do not cover for fraud acts of an agent. It must be unintentionally.

You should go after the lost premium for values your mother could never had collected if she had a total loss. A claim adjuster would consider her home grossly over insured and will only pay the adjusted replacement cost value, regardless how much insurance she was carrying.  She could have only collected its RCV value under any circumstances so why carry over insurance that will never pay off. It (insurance) is  like a bad slot machine that never pays off.

The Claim Advocate
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