New State Farm Coverages

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sport
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New State Farm Coverages

Post by sport » Tue Mar 06, 2018 4:40 pm

I just spoke with my State Farm agent about my homeowner's insurance. He told me about two new optional coverages that SF is offering. The first is coverage for repairs on your underground utility services. The cost for this is $23 per year. The second is coverage for repairs to major items in your house such as furnace, AC, hot water tank, etc. There is a $500 deductible on these, but the cost is only $15 per year. I have not seen anything in writing yet. However, it seems that these could be worthwhile protections at a very low cost. I am generally not in favor of such maintenance warranties. However, if the cost is minimal, I would definitely consider it. I do not know if these coverages are available nationwide or just in some states.

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dm200
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Re: New State Farm Coverages

Post by dm200 » Tue Mar 06, 2018 4:44 pm

sport wrote:
Tue Mar 06, 2018 4:40 pm
I just spoke with my State Farm agent about my homeowner's insurance. He told me about two new optional coverages that SF is offering. The first is coverage for repairs on your underground utility services. The cost for this is $23 per year. The second is coverage for repairs to major items in your house such as furnace, AC, hot water tank, etc. There is a $500 deductible on these, but the cost is only $15 per year. I have not seen anything in writing yet. However, it seems that these could be worthwhile protections at a very low cost. I am generally not in favor of such maintenance warranties. However, if the cost is minimal, I would definitely consider it. I do not know if these coverages are available nationwide or just in some states.
We have had State Farm (Virginia) homeowners for almost 40 years - have not heard of these options. You can do a lot with various appliances for $500. Are there any other exclusions (such as age of the furnace, water heater, AC, etc.?) Just a guess, but I suspect very old appliances may not be covered.

sport
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Re: New State Farm Coverages

Post by sport » Tue Mar 06, 2018 4:56 pm

I don't have any written info yet. He told me that if a system failed, SF would pay for repair or replacement, whichever is less, minus the deduction.

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dm200
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Re: New State Farm Coverages

Post by dm200 » Tue Mar 06, 2018 5:10 pm

sport wrote:
Tue Mar 06, 2018 4:56 pm
I don't have any written info yet. He told me that if a system failed, SF would pay for repair or replacement, whichever is less, minus the deduction.
Make sure to read the "fine print". The boiler in our house is 75 years old (oil burner has been replaced several times over the years).

SlowMovingInvestor
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Re: New State Farm Coverages

Post by SlowMovingInvestor » Tue Mar 06, 2018 7:18 pm

sport wrote:
Tue Mar 06, 2018 4:56 pm
I don't have any written info yet. He told me that if a system failed, SF would pay for repair or replacement, whichever is less, minus the deduction.
The price you quote seems like a bargain. Utility companies charge much higher rates sometimes just for covering the furnace.

It seems that something like this has a real problem of adverse selection, i.e. people with older appliances are more likely to get the insurance. So I would assume SF has a lot of exclusions to protect themselves.

delamer
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Re: New State Farm Coverages

Post by delamer » Tue Mar 06, 2018 7:44 pm

Another concern is that there has been a trend to deny or greatly increase the cost of homeowner’s insurance when people file claims.

So it would be interesting to find out how the appliance claims might affect your cost/availability of the more critical coverage for fire, etc.

mhalley
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Re: New State Farm Coverages

Post by mhalley » Wed Mar 07, 2018 12:55 am

The underground utilities is probably not worth it, but 15 sounds WAAAY too low for that. I think in general they go for 300-500. In general, home warranties are not worth it due to the many gotchas. But fi 15, it is worth checking out.
https://www.policygenius.com/blog/is-a- ... -worth-it/

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Re: New State Farm Coverages

Post by boglerdude » Wed Mar 07, 2018 6:09 am

We were dropped by Old Republic home warranty after costing them too much

Insurance is for catastrophes

afan
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Re: New State Farm Coverages

Post by afan » Wed Mar 07, 2018 9:08 am

There has to be fine print. In our area replacing the boiler would cost 100 times that premium. Boilers don't last 100 years.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

galectin
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Re: New State Farm Coverages

Post by galectin » Wed Mar 07, 2018 10:04 am

I just signed up for the furnace, etc. coverage. I have two heating/AC units and one is 40 years old. I replaced the other one for $7500 nine years ago. I figure if the older one goes in the next 5-10 years I have gotten a bargain. My water heater is at least 15 years old, but with the $500 deductible, I would be paying most of the replacement cost.

I did not get the utilities coverage. We have a septic system and the agent was not sure if it was covered. He is checking into that, and I might consider that coverage it is covered.

sport
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Re: New State Farm Coverages

Post by sport » Wed Mar 07, 2018 11:45 am

galectin wrote:
Wed Mar 07, 2018 10:04 am
I just signed up for the furnace, etc. coverage. I have two heating/AC units and one is 40 years old. I replaced the other one for $7500 nine years ago. I figure if the older one goes in the next 5-10 years I have gotten a bargain. My water heater is at least 15 years old, but with the $500 deductible, I would be paying most of the replacement cost.

I did not get the utilities coverage. We have a septic system and the agent was not sure if it was covered. He is checking into that, and I might consider that coverage it is covered.
Have you seen the "fine print" on these coverages? If so, can you share them?

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dm200
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Re: New State Farm Coverages

Post by dm200 » Wed Mar 07, 2018 12:01 pm

afan wrote:
Wed Mar 07, 2018 9:08 am
There has to be fine print. In our area replacing the boiler would cost 100 times that premium. Boilers don't last 100 years.
My "boiler" is original in the house - about 78 years. Might make it to 100 :)

The oil fired burner has been replaced several times over the decades.

sport
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Re: New State Farm Coverages

Post by sport » Thu Mar 08, 2018 4:48 pm

I received some printed info on the SF Home Systems Protection coverage from my agent. The agent says that claims under this coverage do not affect the claims free discount. Here are the details:
$15 per year cost, $500 deductible, $50,000 limit per occurrence.

It covers:
Furnace, boiler and heat pumps
Central AC
Electrical service panels and wiring
Conventional and solar water heaters
Well pumps, sump pumps, pool and spa pumps, heating and filtration equipment
Permanent emergency generators
Permanently installed home security monitoring and control device
Renewable energy heating systems (solar, wind, geothermal)
Water purification and filtration systems
Radiant floor heating
Chair lifts and elevators

It does not cover:
Kitchen and laundry appliances unless permanently installed
Domestic and waste water piping
Computers
Electronics and entertainment equipment

There is also up to 150% coverage if you upgrade to new equipment that is better for the environment, safer for people, or more energy efficient than the original.

It includes temporary living expenses if a covered system failure makes living in the home untenable.

Seems like a bargain for $15 per year!

afan
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Re: New State Farm Coverages

Post by afan » Thu Mar 08, 2018 6:03 pm

Seems far too good to be true. But get it while you can!
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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dm200
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Re: New State Farm Coverages

Post by dm200 » Thu Mar 08, 2018 6:19 pm

afan wrote:
Thu Mar 08, 2018 6:03 pm
Seems far too good to be true. But get it while you can!
Sure does - for $15 per year? Seems like there must be some kind of "catch".

mhalley
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Re: New State Farm Coverages

Post by mhalley » Fri Mar 09, 2018 2:11 am

$15 a month would be a bargain, must be missing something.

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dm200
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Re: New State Farm Coverages

Post by dm200 » Fri Mar 09, 2018 3:58 pm

I don't know how much it costs, but in this area there is heavy radio advertising for coverage for appliances, hvac, etc. from standalone insurance company - the ads really knock homeowners ins for not covering such failures.

afan
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Re: New State Farm Coverages

Post by afan » Fri Mar 09, 2018 4:08 pm

An ad from a fly by night company offering something akin to extended warranty coverage I could understand. But this comes from a legit major insurer, apparently without the limitations we suspected. Future bait and switch? A way to retain customers?
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

sport
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Re: New State Farm Coverages

Post by sport » Fri Mar 09, 2018 10:39 pm

Perhaps it is a "teaser" rate to get you to sign up. Then the rate goes up in future years. This is my guess.

mchampse
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Re: New State Farm Coverages

Post by mchampse » Fri Mar 09, 2018 10:52 pm

Insurers are in the business to make money and usually that ends up happening. If they are selling to you for $15/year, they expect to pay out something less than $15. They may not be paying out on events that you may think that they will or fix something that you might otherwise have replaced.

That said, Statefarm is probably paying much less to a plumber to fix something than what you would have to pay a plumber either through volume discounts or even employing their own plumbers, so it could be a win-win.

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Re: New State Farm Coverages

Post by boglerdude » Thu May 03, 2018 5:28 am

Not available in SoCal yet. Probably a teaser/experimental rate to test the program

UpperNwGuy
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Re: New State Farm Coverages

Post by UpperNwGuy » Thu May 03, 2018 6:35 am

Self-insuring is a better solution for home-related expenses that are guaranteed to occur someday, such as repairing or replacing appliances. A savings account with funds set aside for such lumpy expenses is the perfect method of self-insuring.

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dwickenh
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Re: New State Farm Coverages

Post by dwickenh » Thu May 03, 2018 6:59 am

UpperNwGuy wrote:
Thu May 03, 2018 6:35 am
Self-insuring is a better solution for home-related expenses that are guaranteed to occur someday, such as repairing or replacing appliances. A savings account with funds set aside for such lumpy expenses is the perfect method of self-insuring.
+1

Insurance companies would normally book a gross profit of 40% to cover salaries, buildings and maintenance, and reserves.

I would rather book the 40% for myself. I insure for catastrophes, not common maintenance problems.

I agree the price sounds very reasonable- therein lies the problem........
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

boglegirl
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Re: New State Farm Coverages

Post by boglegirl » Thu May 03, 2018 7:56 am

sport wrote:
Thu Mar 08, 2018 4:48 pm
I received some printed info on the SF Home Systems Protection coverage from my agent. The agent says that claims under this coverage do not affect the claims free discount. Here are the details:
$15 per year cost, $500 deductible, $50,000 limit per occurrence.
...

There is also up to 150% coverage if you upgrade to new equipment that is better for the environment, safer for people, or more energy efficient than the original.

It includes temporary living expenses if a covered system failure makes living in the home untenable.

Seems like a bargain for $15 per year!
I wonder if these repairs/replacements are handled similarly to the warranty companies. As in, you have to call their 800 # and they send out their service provider, instead of you getting to choose who does the work if you had a regular insurance claim. We had 2 service calls under a homeowner's warranty for the house we bought 3 years ago, and were very unhappy with the outcome of both! I don't think I'd ever buy another house with a so-called warranty - I'd ask the seller to kick in the $550 toward other costs instead.

But for $15/year, why not try, I guess.

NAD83
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Re: New State Farm Coverages

Post by NAD83 » Fri Aug 10, 2018 8:53 am

I just spoke to my State Farm agent this week and she also offered this product. But it was quoted at $52 for the year. Still seems like a decent deal, as I have 2 older AC units.

Point being, my guess is this coverage will continue to increase as more people start actually cashing in on it.

Big Dog
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Re: New State Farm Coverages

Post by Big Dog » Fri Aug 10, 2018 9:42 am

But for $15/year, why not try, I guess.
The answer to that question depends on the other question you raised: is this just a line of business that will work like an extended warranty (company)? If so, buyer beware. Home appliance warranty service companies are not necessarily the best at repairs, nor do they tend to have many experienced workers.

A well-balanced HVAC system requires a lot of art to the science, and for that you are better off with experienced professionals. Your system will last longer that way.

orlandoman
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Re: New State Farm Coverages

Post by orlandoman » Fri Aug 10, 2018 10:11 am

Looks like SF is reselling a 3rd party warranty. Ask them who the warranty coverage is through. Then, read the reviews on the warranty company.

I remember reading a review on a company, a few years ago, that went something like, "Your a/c system has rust ... you didn't maintain it properly as required in the policy .. no coverage". Understanding, of course that most comments are placed by people unsatisfied with the servive they received and they or may not be correct.
"Not everything you read on the Internet is true", Abraham Lincoln

azwildcated
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Re: New State Farm Coverages

Post by azwildcated » Sat Aug 25, 2018 12:26 am

Can someone provide a pdf or link to the specifics of the State Farm Home Services Protection Plan. I’ve looked everywhere and unable to learn the specifics on WHO does the selection of the contractor/company that would for example replace your A/C Unit. Does the policy holder make the choice after an appraisal by StatecFarm or is a provider pre-determined or contracted by State Farm? Do I have any say in who is to do the replacement of my unit?

USMCVET
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Re: New State Farm Coverages

Post by USMCVET » Tue Sep 11, 2018 10:29 am

I work in the HVAC industry in Cincinnati, OH and I just had a customer bring this policy up to me yesterday. First time I had heard of it but seems my colleagues have had customers having issues when trying to take advantage of this policy. We are curious so I have a call out to my State Farm agent as she is a friend of mine and will give me an honest view of what this State Farm policy is about. I will post a follow-up when I have more details.

NAD83
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Re: New State Farm Coverages

Post by NAD83 » Wed Sep 12, 2018 12:25 pm

I work in the HVAC industry in Cincinnati, OH and I just had a customer bring this policy up to me yesterday. First time I had heard of it but seems my colleagues have had customers having issues when trying to take advantage of this policy. We are curious so I have a call out to my State Farm agent as she is a friend of mine and will give me an honest view of what this State Farm policy is about. I will post a follow-up when I have more details.
Thanks USMCVET. I look forward to hearing your response.

drawpoker
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Re: New State Farm Coverages

Post by drawpoker » Wed Sep 12, 2018 1:46 pm

Same here. Would be most interested in learning more about this.

franks
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Re: New State Farm Coverages

Post by franks » Sun Nov 04, 2018 9:14 am

let us know the information please. thanks

Alan S.
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Re: New State Farm Coverages

Post by Alan S. » Sun Nov 04, 2018 11:02 am

Remember that any optional coverages must be priced assuming adverse selection will drive the purchases. Therefore, if you purchase this coverage you will be overpaying unless your particular exposure (eg old heating unit) is as risky as the average buyer of this coverage.

This is not unlike the situation for the entire HO policy, but much more concentrated to a couple exposures. Somewhat similar to EQ coverage in major damage areas without the catastrophe exposure.

If you are still interested, then carefully read the coverage limitations and claims process. In many cases, you may end up replacing older HVAC units anyway. Check to see if there is any credit for the new purchase in lieu of having older systems repaired. Also check to see how this coverage syncs up with the basic HO coverages, such as a tree falling on your compressor when you have a higher deductible on your HO, such as 1%, 2500 etc/

Note that tree roots penetrating your sewer line is a common exposure that is excluded.

totesmagotes
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Re: New State Farm Coverages

Post by totesmagotes » Mon Nov 12, 2018 3:50 pm

I'm debating about moving from ASI to State Farm partly for this reason as well. We have two older A/C units at my house, and it could come in handy for only $50 (quote I was provided). My State Farm agent said the program is run through Hartford Steam Boiler, which is part of Munich Re. It sounds like a pretty incredible deal, so much so that it's pinging my "too good to be true" meter. Hmm.

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southerndoc
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Re: New State Farm Coverages

Post by southerndoc » Mon Nov 12, 2018 5:44 pm

This sounds too good to be true. I have 3 AC's in my house. If one goes out with this plan, I would only pay the $500 deductible and it doesn't affect my insurance rate? Something doesn't seem right.

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