"short rate" premium refund

rec via email

I just cancelled all my policies with Farmers. I was surprised when I received a premium refund from Farmers for my homeowner policy that it was about $100 less than what I had calculated ($391 vs. $298 returned). It was at this point that I determined that they were returning a "short rate" premium refund. After research, yes, it does state in the policy, that if I cancel, they will return short rate premium. However, no where in my docs do I find a short rate table or other information. Is this fair to hold back my money like this? I already paid a policy fee when establishing the policy....seems like a ripoff. Especially that high a percentage of the pro rata amount.
thanks

Rather than looking for verbage stating a "short-rate premium" (strange because I would think it would be pro-rata instead....be that as it may), I would look for verbage stating "minimum earned premium". The $100 you are referring to sounds like "minimum earned premium". When was your effective date and/or renewal date, and also your cancel date? If it is the "minimum earned premium" I think it may be, then it should be printed on your declaration page or within your policy jacket. If not, I would suggest writing your State Insurance Department with a complaint!

Good luck!

I'm a student who has a simple car that takes me from point A-B. I canceled my insurance with Farmers- both auto and renters. Two months elapsed and I did not get my refund check. I called my local agent to see what was going on. He told me that I owed them money! I was like what do you mean I owe you? I was supposed to get a refund check. First they tell me that I paid my premium late- NO I never did that. They got their money electronically. Then the agent tells me to call back (he was probably getting his story together). I call back and he tells me about the short rate. I've never heard of that before. He continued to tell me that its state law!
I'm so done with Farmers. I do not recommend it to anyone. One is better of with Allstate- a little pricey but they dont complicate things with 'short rate' and what not.

Myself and my husband are dealing with this now with Farmers. I am still waiting for an explanation from my agents boss, but the long ans short of it is. WE'RE SCREWED. At this point I think all of us have a liget complaint to file with the insurance commissioner. In California if a complaint is warrented the insurance company pays a fine.... rather the claim is founded or not. I am going to present my complaint to the insurace commissioners office based on the fact that there is no explanation of "short rate-fee" in my policy. And when it is mentioned it makes it sound as if the "short rate fee" is there for the policy holder. At any rate, I have a family member who has worked in this industry for some 25 years. And while it is legal for them to do this in California, it is now considered highly unethical. Most major insurance companies no longer put a "short rate" statement in their policies. As for it being the law.....NO...it's not the law they have to do it. It's just not excluded by the law.

Good Luck folks

Cancelled my homeowners policy with Farmers. The premium refund I received was much lower than I expected. The agent explained that I had been charged a 14% penalty for cancelling within the first year. The short rate clause in the policy gives Farmers the discretion to charge what they want without disclosing what the charge is.

Farmers continues with this practice in 2009.

I live in Kansas and I would very much like to find a different home insurer. My premium just went up $367 for no apparent reason. The agent cited the struggling economy and mentioned AIG. When I asked if Farmer's has money invested in mortgage-backed securities, he said "no" and went on to talk about how fiscally responsible Farmer's is. So, why is my premium going up about 30%? When I pressed him, he mentioned that Kansas had several storms last year, which caused them to have to raise their rates. Now, I'm not a rocket scientist, but I'm fairly confident that every single Farmer's customer with homeowner's insurance in Kansas probably didn't experience a 30% increase in their premium.

This agent is not the one I signed up with when I bought my home a year ago. I don't know what happened to my old agent- I just got a notice that he was no longer with the agency and this new guy would be my agent.

In addition to being annoyed with the increase in my premium, I'm also very dissatisfied with the responsiveness of the agent when I called to check on the status of my policy after coverage date of last year's policy had passed. He didn't call back and I finally got something from my mortgage company saying that they didn't have proof that I'm insured. And don't even get me started on the ridiculous hoops one must jump through to get the interior inspection scheduled (all so that some guy can come out and take a photo of the kitchen and the furnace- that's it!).

Long story short- I'd like to go ahead and switch insurers prior to the end of the current coverage period. How does this work when insurance is paid out of an equity account? Is this allowed and can I expect a significant penalty?

Thank you in advance for any advice you can provide.

I had my farmers homeowner's insurance policy with the same agent for 3 years. The policy came up for renewal on Sept 14,08. However I knew I was moving in Nov or Dec and did not want to pay a whole years premium. I spoke with my agent and she assured me that we could put my payments on monthly basis. My premium for the year was 1894.00. So on 9/4 I paid 314.00 to continue the insurance on my house. I believed this payment would cover from 9/14 to 11/14 when the house was to be sold. I found out in Oct that settlement was going to delayed until 12/9/08. I called my agent and was told to pay an additional 162.00 and this would cover until house was sold on 12/9/08. I thought everything was fine. On Feb. 18, 2009 at my new residence I received a letter from a collection agency telling me I owed Farmers 175.00 for canceling my policy early. When I called collection agency they informed me that Farmers does not offer monthly payment plan. I then called agent and was told that I owed a November payment. Then I was told it was the way the actuary did. I then called Farmers and was told that it was a short rate cancellation fee. My agent never informed of this and told me I should have read the policy. here i thought they were working with me but they were out to rip me off. So I paid 639.00 for 3 months insurance not much of a deal. Thank you farmers!

Farmer's insurance did the exact same thing to me. They first sent me a "cancellation notice", which I assumed meant that my policy would cancel at the end of the term. After which, my agent secretly renewed my policy WITHOUT MY CONSENT for a rate that was 45% more than last years!!!! I cancelled my policy and then got hit with the Farmer's Insurance "short rate" fee of 9%!!!!!

FARMERS INSURANCE IS COMPRISED OF THEIVES! DO NOT GO WITH FARMERS -- AVOID AT ALL COSTS!!!!! They will rip you off left and right!

Well, one of the worst agents at Farmers Insurance has got to be Kevin Osborne. I tried to talk to him and he gave me the run around. He wasn't very friendly and apparently he brings his personal life problems into the office. I think he has to be one of the worst agents in the company.

I am one more victim of Farmer's short-rate cancellation policy. I paid 14% penalty for cancelling the home insurance in the first year. I cancelled it because I found State Farm could give the same coverage with 40% less premium. Over all, I will come out ahead but it really hurts when these large companies cheat you like this.

Actually Farmers agents have the ability to either short rate or pro rate a homeowners or auto policy. It's up the agents if they want to work with you or not. I know this because I'm a former agent and was told by the DM and his assistant to short rate clients that were hard to deal with. Unfortunately these stories are common when dealing with Farmers Insurance. I'm glad I became an independent broker and I would encourage everyone to go through an independent broker for all of their insurance needs. Independent brokers like me are appointed with many different insurance companies and have the ability to shop around for the best deal for the client. All of our companies are better than Farmers, Statefarm, and Allstate. Clients don't need to be tied down to the programs that are offered by only one company.

Canceled the policy on auto insurance almost 3 months ago and never got a refund check $298. Called the agent, he keep promising me he will take care of it. Farmers is suck! very suck! goddamm suck!

I live in Montana. Switched home insurance because other company was half the cost for more coverage than Farmers. I cancelled 23 after I paid my premium and my refund check was 3/4 of my premium. For 23 days I paid 3 months worth of coverage! My agent said it was legal. Never use Farmers, they are dishonest, and their agents are liars.


Jeff
Billings, MT

I believe if you did some research you would find that "short rate" is a practice that every insurance company uses. This is not particular to Farmers. Plus, insurance, unlike other industries has a watchdog in the way of state regulatory divisions and insurance commissioners that see to it that insurance companies comply with fair practices. If they do not then they can be significantly fined and/or have their admission to insure in that state removed. The best thing to do with any insurance policy cancellation is to cancel at renewal.

I just cancelled home owner insurance with Farmers and found that the refund check is only 72% of the expected pro-rated amount. Called the agent and the agent said that I am not Farmers customer anymore and that is all she can do.
The agent is very very rude in response to my request of showing me any document
that Farmers can charge any type of penalty or so called Short-Rate and the agent admitted that she does not know where it is documented. The agent insisted that it is legal in California that insurance company can practice Short-rate.
I will be carefull to undersatnd whether my new insurance company policy or
documents actually say anything about the cancellation policy.
Good luck ! But I will not use the Farmers again and definitelly not this agent.

Just got screwed, cancelling my FArmer's home insurance. I cancelled the auot a few months ago and then the home. Their rates are at least 35% higher than anyone else.
They priced themselves out of the market and shortchanged me on the pro rated refund.

I was never informed bout this behavior by the agent. FARMER'S SUCKs! SUCKS! SUCKS!
Let's try a class action lawsuit!!

Katrina Evacuee:

Full renters insurance including car: They never paid a dime in damages, and even continued to bill me for a car that was lost in the flood !!! the audacity! Try to cancel your insurance, and they will actually REFUSE, and demand to know who your new insurer is. Farmers agents habitually lie, steal from, and shortchange customers, and care not if your life is ruined, and you had paid full coverage. They will only deny it, and keep your money. Paper pushers who care not who they thieve from. nearly $2k yr for insurance coverage, and I ended up with nothing but 2 suitcases and the shirt on my back, and they CONTINUED to bill me even after proof that everything was destroyed in a national disaster, and ruined my credit. Throw an egg at their building and flip off every farmers agent you see. lying heartless fktards.

BOYCOTT FARMERS INSURANCE

don't be a victim like the rest of us.

So after Farmers started to charge me $230 a month for my auto insurance I decided to switch to Geico, ($94) well I cancelled it on Nov 23 and send it all the forms i needed to receive my refund..I have yet to receive my refund and its been almost two weeks.The agent that I go thru is no help. What do I do?

Amy,

If your current agent isn't helping you, you can do a couple of things that might be helpful (Hopefully you've received a refund by now).

1) Call your agents District Manager. Tell him/her that you haven't received a refund and tell them that you want to file a complaint about your agent. If it's a legit complaint (which I'm sure it is) your agent will get sat down and talked to.

2) Google "Farmers Insurance agent in (Insert your location here)" and call a different agent. Just tell them your situation and that your current agent isn't helping you and all you'd like is some help. I've received calls before from Farmers customers that are not mine and I'm always happy to help (like most are I believe).

Hope that helps. If it does not, please let me know.

Wow. I like all the comments here.

I am screwed too by Farmer's insurance agent. I was hsopping around the insurance rate. I got my last 10 days with Farmers and now they charges me almost $2000 for 10 days. Wow. after I read the post, I understand they are just crooks.

I am going to report this to inurance commisison in the state of WA. I would never use them again!!!!