Homeowner Insurance - what's "Key Factor"?

[radhak]

After taking advice here, I signed up last year for HO insurance with Northern Capital. Last week, I was glancing thru it's paper-work, and I realized that their numbers were puzzling, to say the least. Yeah, this almost a year after the policy started - I am pretty quick with stuff like that .

The first page gives me the premium, et all :

A. Dwelling ............................1476
B. Other structures.................. included
C. Personal Property ................ included
D. Loss of Property................... included
E. Personal liability ....................30
F. Medical................................included

As you can see, this adds up to $1506. But then, the next line is this :

Total of Premium Adjustments : $1235

making the total : $2741.

The breakup of this 'Premium Adjustment' is on the next page: things like Keyfactor ($1291), Personal property Replacement Cost ($415), and some discounts (Gated community, fire alarm, etc).

I called my agent for explanation, and she conferred with Northern Capital, and came back with - 'its just something every insurance company charges'.

But what is keyfactor? and 'Personal Property' appears twice, once as part of the premium ( point 'c' above), and then also part of the 'premium adjustment'.
It sure looks like some surcharge or something, over and above the premium quoted. Does anybody know?

[frumper64]

I would guess that the second charge for personal property might be to raise the coverage to replacement cost instead of depreciated value, but don't have a clue on the big charge -My policy here in Texas doesn't include anything like that.

[isddarms]

'It's just something every insurance company charges' has got to be one of the lamest answers I've ever heard. I'd agree with frumper64 on the replacement cost issue, but 'keyfactor' could mean anything but probably means 'we want more premium income.'

I don't know if your premium is in line with similar homes, but I'd certainly double-check with some other agents.

[MilDoc]

I'd call the agent back and tell her that explanation is not acceptable, and stay on the line until it is better explained. Or call your state insurance department and complain.

It might have something to do with where you live.

[Adele]

radhak,

I am an insurance agent. The explanation given buy your agent tells me one thing. Find a new agent quick. If that is the best she can do what is she going to say if you have a claim. Unfortunitly, I can't tell you what it means on your policy. I would suspect that it is a rating issue and the company just doesn't break down the charges very well on the declartion page. However, that is really just an educated guess. I still would be looking for a new agent. The policy itself might be fine. However, I am a HUGE believer that your agent should be able to answer any question that comes at you and if they don't know the answer be willing to say so and find out the answer. At least that is the way I do business.

Hope that helps,
Adele

[OpaDC]

I have State Farm and Citizens in the panhandle and have never heard of Keyfactor. Is it possibly something to do with the hurricane premium? Regardless, I would look around, QUICKLY, before hurricane season gets too close and you can't change.

[radhak]

update

so i got to talk to the agent again. put her on the spot, and in the end took pity on her and closed the call. she had no explanation for the extra numbers, and practically admitted that she had to go by what the company was telling her.

of course, i do see that the real fault is mine : i should have asked for and seen these same figures before signing for the policy .

anyway, all this had started because an allstate agent was trying to sell me the same HO insurance; today i asked for an initial 'estimate' quote, and he's effectively quoted close to the lesser (half) figure . of course i have requested for a full and final quote, and shall wait to see if there's another 'adjustment' here too .

thanks for all your input. shall update y'all with the latest...

[gjat]

I would be extremely careful of getting 'no-name' homeowner's insurance down there. I bet 'key-factor' is a premium rate hike because you're in Dade/Broward. Before you switch to Allstate, get a quote from a few others, though isn't StateFarm on the black list and unable to write new policies? I'm not sure what my insurance rate is here (LOML handles the details) but I'm 90% sure we pay less than $2k for an averge to better house. Also, I'd negotiate putting in the auto insurance with the same carrier. Since my homeowners, auto, and life insurance is all with the same agency, beleive me, I get good effort whenever I have a question or problem. Having a good agent is key, though.

[Knottscott]

Hopefully there's a real good explanation and you're fully covered, but I'd have one large pit in my stomach if I were in that situation, and I'd seriously be shopping for a new provider...pronto. Surprises in my HO's policy is not something I'd be comfortable with.

If you do look elsewhere, AMICA is the most reputable company I've dealt with to date, and their rates have always been competitive. They've even called me after a windstorm to see if I had anything to claim.

Good luck!

[Schleeper]

Before you switch to Allstate, also ask them about their recent run-in with the Florida state insurance dept. I don't know the details, but the state says the company was being a bit footloose with the regulations, so they suspended Allstate's registration for selling auto insurance.

[twistsol]

Insurance companies' actuaries come up with a base rate which is what you see on the on the first page. Keyfactor is is a price adjustment based on the rate the actuary determined and the insurance score you were assigned. It is essentially an assessment of risk.

They assign a score to you based on your credit profile, specific characteristics of your house, claims you've made, claims people in your area have made, claims people similar to you have made, your astrological sign, color of your neighbors car, name of your dog, or any other criteria they've been able to identify as statistically significant after mining billions of pieces of data out of their computers.

For example, on my homeowner's policy, my insurance score is most negatively affected by "Lack of reported information on oil company accounts" Apparently my homeowner's insurance will go down if I get a gas card instead of using Amex.

[rnelson0]

If you do look elsewhere, AMICA is the most reputable company I've dealt with to date, and their rates have always been competitive. They've even called me after a windstorm to see if I had anything to claim.

Another happy AMICA customer here. They've never called me after a windstorm but they've still been great to deal with. They also offer reasonable prices on $0 deductibles for people with no record (zero/low claims on homeowners or zero/few tickets on auto). I've never had them try and weasel their way out of a claim, and they are happy to tell you what the results of filing a claim would be (i.e. if filing a damage claim would raise your rates and result in little financial help because of your deductible, as in a $600 damage claim against a $500 deductible that will raise your rates $300 over the next two years - you're better off sucking it up). They're a little more expensive than others, but they offset that by offering dividends at the end of the year if you don't actually have to use their services.

For all I know, tons of other companies do this. I'm not willing to try and find out, though! I'm curious if anyone has similar experiences with their companies.


Oh, on the Allstate quote at half price, make sure to look at your term length. AMICA gives quotes for a year of coverage. GEICO tried to impress me with a quote at just slightly more than half the price - for a 6 month term.