Insuring your home

How to find the best coverage for whatever comes your way

Will your insurance company be there for you in the aftermath of a disaster, when you most need it? The answer might be no.

When Consumer Reports National Research Center surveyed readers about their homeowners insurance claims in the last few years, half of those who had filed claims related to Hurricane Katrina reported problems. That's twice the rate of problems reported by other respondents. Twenty-six percent of Katrina victims said they were paid too little, compared with 11 percent of others. A disaster tests everyone, and in the eyes of our readers insurers often failed that test.

Even if you're nowhere near a hurricane zone, you could face catastrophe in the form of fire, wind damage, or a lawsuit. It's in those dire situations that you truly need coverage that lives up to its promises. Yet our evaluation of home insurers found that doesn't always happen. You can find excellent insurers, but you can also face a maelstrom of complexity, cost, and difficulty getting your due. Here are highlights of our findings:

• Excellent coverage can be costly or hard to get. Amica Mutual Group, USAA Group, and the Chubb Group of Insurance Cos. were rated more highly for claims satisfaction than most other insurers. But USAA homeowners insurance is available only to those with a connection to the U.S. military, and Chubb markets itself as a high-end insurer, with premiums to match. (Amica says it has moved away from its tradition of selling only to those referred by policyholders.)
• There are claims problems with some large insurers. In our survey, 35 percent of Allstate Insurance Group clients reported such problems with that carrier, the nation's second-largest. That contrasts with 14 percent who reported problems with top-ranked Amica. Allstate and Travelers Insurance Cos., another large group, were among the lower-rated groups overall.
• Delayed payments are common. Twenty-one percent of respondents said they had faced delays having claims paid. Amica and USAA got better marks than most.
• Insurers are scaling back coverage. They are imposing high deductibles for windstorms in many places and cutting coverage for mold and dog bites. Some are using credit-based insurance scores to reject prospective clients and to raise premiums of current ones. In some areas, insurers have abandoned homeowners coverage entirely.

Still, we found good news, especially for people with decent credit and claims history.

Lots of folks are finding lower prices. A fifth of respondents said they had been with their company for four years or less. Of those, more than half said they had found a better premium with their new carrier.

And consumers are reasonably content. Overall, 73 percent of respondents were highly satisfied with their current carrier. That compares with a satisfaction rate of 77 percent in 2003, the last time we published ratings of homeowners insurance. Only 5 percent indicated their claims were rejected, and 11 percent said they received too little payment for their claims. The remaining 84 percent were satisfied with the settlement of their claims.