I made a YouTube video with more details, but I'll share as much as I can here. That video can be found on my YouTube channel @RonJohnCo.
Back in June I reached out to my State Farm insurance agent. I was concerned about my apartment building flooding. I had a 2023 bmw m2 that was significantly modified. I was about $60k into modifications on that car as its used for promotional purposes for my business.
I told the agent I have records and receipts for everything, explained the value of the modifications, my concerns about flooding, the nature of the modifications and what they were specifically. I explained that I needed to be able to rebuild the car in full if it was ever a total loss, so I needed a declared value policy.
The agent said that my coverage includes all modifications to my vehicle. I clarified, does that also include shipping, labor, and tax. She said yes, as long as I have receipts I'd be covered.
She then sent me an email after confirming I have the coverage for my modifications. Here's a direct quote:
"I confirmed with underwriting that no changes are needed on your policy. However, they did confirm that receipts will be needed if there ever was a claim. The meticulous records you keep will be more than sufficient."
Because she said this, I thought I had coverage. She confirmed to me now twice that the coverage I was requesting, that I knew I needed, was the coverage I had.
Fast forward to 8/19. Massive flooding, we lose 3 cars as a family. I had a renters policy with this woman, and two auto policies.
One of my auto policies had no comprehensive coverage on it, although I cited a flood risk to her on multiple occasions. My renters policy that was sold to me under the pretense that you could turn my apartment upside down and shake everything out, how much coverage do you need? My $150k policy only covers fire. And now on the M2, which I can't afford to let go like this, they're offering me $57k. The car is worth significantly more than that, and I sent them $60k in receipts that were supposed to be covered.
I need some help. Any advice would be greatly appreciated. We lost a lot in that flood and I specifically requested coverage for this in June and was told I had it.
Thank you in advance.
An insurance agent for State Farm lied to me about my coverages when I was seeking a declared value policy and now I'm being offered $57k for a $130k+ vehicle
byu/launchslugs2 inInsurance
Posted by launchslugs2
34 Comments
Disregarded everything you said after you stated the insurance agent lied to you.
You signed your documents, maybe next time you’ll read them.
We are gonna need a little more than that and maybe some directions to get to your video. There sounds like at a minimum some miscommunication and assumptions that turned out not to be true.
I don’t know how ow if you mentioned it but what state for posterity
Eh you may be able to push the issue with your insurance company if the call was recorded and you have proof that they lied.
But in the end you signed the documents and you are at fault.
Its a contract, you agreed to it, you signed it without reading it.
Also your renters has nothing to do with your auto.
And why would you live in a flood zone without getting flood insurance.
It sounds like you’re trying to argue that a verbal agreement outweighs the written policy you signed. It will be very hard winning against the company. You could also try against the agent, but you have an uphill battle.
Any insurance company needs photos of the mods in your car not just receipts
Couple of things. Your renters policy covers a lot more than just fire, but one of the things that it won’t cover is flood. So i feel like you’re being a little disingenuous there.
As far as the agent goes, you might have a case if you can prove that the communications you have with the agent show that a) you clearly asked for more coverage/states value coverage and b) they flat out told you that you were covered when you weren’t. Agents should have an errors and omissions policy in those cases. You may have recourse there, but that will be a long drawn out process I am sure.
Good luck.
Have you reached out to the agent for help with the claim? Have you shown the emails to the adjuster? What has been their response?
What specifcally did your policy that you signed state about any extra coverage for the “I was about $60k into modifications on that car” part?
Agents have error and omissions coverage. Try to escalate this with your state’s department of insurance.
You’re getting some flak, but I think you have a valid point.
If you expressed your concern to the agent, provided proper context, asked for a way to insure it and they responded in writing that you had the coverage needed, then you likely have a valid claim against their E&O.
Work for State Farm in Texas, not sure if your state works the same, but I’ll give you what I know and ultimately it’ll be up to you to confirm the details with the appropriate people.
Starting with the renters policy, those will never cover flood damage. It most likely covers more than just fire, and I’m assuming you may have gotten the idea from someone calling it a “fire policy”. In insurance, fire usually just means any property that isn’t an automobile (boats are also a fire policy for example). If the flooding made your home unlivable, you should have loss of use coverage to can pay for other living arrangements or reimburse you for any alternate living arrangements you already have made (assuming this loss happened awhile ago)
As for the auto. The claims department has no clue what your agent’s office has discussed with you. They have the policy documents, and that’s it. If you tried giving them the receipts and they refused them or are not willing to cover them since they weren’t declared, ask to speak to the claim handlers supervisor and explain to them that you have emails with the agents office where you did declare them and you were told you didn’t need to. If they still give you the run around, ask for it in writing and then take that and all the other info and make a complaint with the office of the commissioner or insurance.
I dont know what happened, but my best guess is that the team member who wrote your policy was using our “integrated auto” quoting tool, which doesnt even ask about modifications or have a place to leave notes. After you told them about modifications, they either would have had to switch to the other quoting tool (NECHO) or use a form called a UAX form to add additional information to the quote. They also probably should have written that policy as a commercial auto depending on the percentage of usage you use it for business. However, since you have 2 autos, splitting them like that would make both lose the multi-car discount and would make it a harder sale. I think they wanted to make a sale, and cut corners to do it, but because you raised concerns and have email receipts, you get a chance to nail them to the wall for it. I will say one thing in their defense, tpyically if you have a receipts for a modification or two, the claims department will honor that, but it sounds like the modifications you have exceed the value of the base vehicle, and they honestly should’ve known better. Very sorry you’re going through this, and the way out is going to cause you to have to be a karen. there is also a large possibility that they mysteriously “non-renew you due to claims history” at your first renewal after this is all settled, but if you wanted to stay with us after this, id be surprised.
File a complaint with your state insurance commission.
Short answer: your M2 isn’t worth $130k just because you added a bunch of stuff to it. You should have read your contract.
If the agency producer or broker has confirmed in writing that your modifications and expenses are fully covered at the agreed value, you may want to consider hiring an attorney to take legal action against the agent. The agent will then bring the issue to their Errors & Omissions (E&O) insurance carrier. If the agent is found at fault, the carrier will cover the costs. If it’s not proven that the agent made a mistake, the carrier will defend the agent.
It’s important to note that just because you believe your vehicle with modifications is worth $130,000 at a stated amount value, it may not be accurate. You may have misunderstood the coverage when attempting to cover modifications, as they rarely add value to a vehicle and never do so at replacement cost. The insurance company will verify that the stated value is reasonable, but there’s no guarantee that you will receive the full amount in the event of a claim. Instead, the insurance company will pay out the stated value or the actual cash value, whichever is lower. What you needed was agreed value but you signed and paid for was stated amount coverage.
The stated amount is specifically for vehicles without symbols (specified carrier ratings), such as classic vehicles or vehicles with modifications like wheelchair lifts. Adding a wrap, body kit, or spoiler to a vehicle with a symbol for commercial purposes does not increase its market value.
This is a complicated area of law (agency, insurance, claims issues are all involved), but you have $60K+ on the line. Probably best to spend a few grand on a good lawyer ASAP so you don’t do anything to compromise any wights you do have. They may advise that you’re out of luck, but if I’m you, I’m pushing the issue (assuming things happened the way you say they did and you have clear written representations from the SF agent).
Keep in mind I don’t think the agent lied to you. I think she just messed up. It doesn’t really matter whether it was intentional or not, her words and actions can certainly bind the company she represents. State farm is careful to take all sorts of steps that might say otherwise, that only the insurance policy itself has any meaning, but they know that’s not necessarily the way a judge or jury will see it.
If you do intend to handle it yourself, escalate and send the email exchange with the agent to the company. The adjuster likely has no authority to ignore the policy language in favor of assurances made by the company’s agent, so this will have to be escalated.
Simultaneously send a letter/email to your agent stating that you expect her to inform SF that she stated you had the coverage you were seeking. Attach a copy of your full written exchange with her. Let her know in no uncertain terms that this is a significant loss and she should advise her Errors and Omissions insurer that you intend to bring a claim against her and her agency if the claim is not resolved to your satisfaction. That will get her attention and she will have no choice but to pass that up the chain of command in the agency.
It appears you agreed to purchase policies without fully reading or understanding the terms. I understand your frustration, but your signature agreeing to those terms likely outweighs any prior email discussions with your agent.
You are gonna hate hearing this homie but just because you added 60k in mods to your ride, doesn’t double the value of your car. That’s not how car modding works and anyone who’s been modding cars for any amount of time will tell you that. You just have an M2 with some custom bits on it. THAT said in the future you can add endorsements on to your policy that will give you up to a certain amount for your mods but I think the highest I’ve ever heard of is like an additional 5k. There may be some specialized insurance companies that would cover more but in general most insurance companies are going to give you the ACV (Actual cash value) of your vehicle and that’s it.
Talk to a lawyer, your lawyer, because I ain’t one, and I don’t live in your state, whatever that is. Maybe someone has better news for you, but based on what you have written, Errors & Omissions insurance is about your only real hope.
Based on what you have written, your claim against State Farm is not much. Between you and State Farm is a contract, which the courts presume you read and understood because you signed it.
Based on what you said, your claim against the agent is a different story. If you literally asked if you would be paid out $130 via a stated value policy, you have a great claim against your agent. Because that is not the policy you have, if you asked if you have coverage for $60k worth of accessories, you have less of a claim.
Under a normal insurance policy, with a modification rider, you have up to an agreed amount of coverage for modifications, based on their value as they are installed on the car right before the time of the accident. How much is a $2,000 turbo with an install cost of $1,000 worth, not $3k, but much less as it is used and installed on a car.
The other issue is that you are using this car for business, if it’s not under a business policy, you have another issue.
Regardless, the only way you can get more out of your current claim, is to force State Farm to be found liable for the negligence of their agent or underwriter, who is not an employee but an independent business from State Farm. If you are willing to throw a good chunk of change at a lawyer, you could file a claim against your agents Errors & Omissions Insurer.
I’m curious as to whether SF gave him Stated Value coverage or just told him the increased value was covered under the policy form. I never liked the verbiage associated with SV and the modifying term, “we’ll pay the lesser of”, makes it difficult to determine what and how much carrier will pay. I would read your dec pgs and see if that term or something similar is listed. Also, did you by chance add coverage for custom parts?, I wouldn’t think so, but u never know. Think the most important question is whether u paid additional monies for coverage to SF after u told them about increased value.
If not, likely you’ll only get ACV on your car.
Not surprised at all the victim blaming on here. Yet not one of you is critical of the agent’s alleged behavior. Allegedly, upon finding out that her customer modded an already powerful car into a 700+HP monster, she didn’t have state farm do a re-rate. The value of the parts aside, the risk profile of the vehicle is now substantially different.
Obviously none of us here know the truth of what happened, but agents have E&O for a reason – they sometimes make mistakes. Whether this situation is an example of that is something lawyers will have to fight about. It’s certainly worth a consultation with one.
So, can tell most of the people here are brokers/agents (it makes no difference in this case), and defending someone whose job it is to give advice, giving bad advice. If agents aren’t expected to give advice, what the fuck is there place in the insurance buying experience and why do they get to collect commissions?
They are licensed to give insurance advice and they are required to carry E&O insurance for when they fuck up in giving proper advice, this is a perfect example of when you sue your agent and access their E&O.
This agent made an absolute rookie mistake and believed, along with the underwriter, that stated amount was the same as agreed value. States amount will never pay more than the ACV, so it includes depreciation, which when you’re talking about modifications specific to your car, they depreciate fast. You went to your agent with a problem and they advised you that you were covered when you weren’t, that is clear cut E&O, and a lawyer will get you that policy, likely very quickly.
The agent does not want to go down that route because any claims on that policy will cause their premiums to increase significantly, but you need to do it.
The good news is you have some expenses you can use to cut your business taxes, so talk to your accountant. The bad news is you are really shitty at reading contracts and need a lawyer to do it for you.
“$130k” vehicle but lives in an apartment?
Do you have a NFIP FEMA flood insurance policy? Regular insurance does not cover flood damage. I had a massive flood my house but I had speciality collector car “agreed upon” value coverage my classic Mercedes convertible in my garage. Regular insurance on modified or collector cars you usually get way underpaid. I got laid the agreed upon value.
Next time you might want to contact an agent/broker that writes with American Modern or Hagerty. They write classic and collectible cars on an “agreed value” basis. Your M3 is too new to be classic (20+yo unmodified), but may fall under collectible or highly modified.
This isn’t advice specifically related to this claim, but I’m guessing that you will have modified vehicle in your future. In my opinion, you would be better to find a specialty insurer that understands modified, rare, and antique vehicles. that probably isn’t State Farm.
You need to lawyer up ASAP.
Insurance agent here.
First off, this post has lots of very wrong responses and lots of very condescending people telling you something along the lines of “next time read what you sign” when that’s the very reason for an agent’s existence in the first place. If explaining to you every detail of the policies isn’t an agent’s job, then why else would you even need an agent? People are capable of processing their own payments and print insurance cards, but people just don’t have time to read through the 100+ pages full of details of policies.
I doubt these same people have never even read anything themselves, but one day they will be here voicing their problems hoping for help and empathy.
Insurance is complicated and it’s just not reasonable for everyone to know about all the available coverages offered and all the quirks a company may have that are literally not even listed anywhere on a Dec Page or even a Policy Jacket, but sometimes only within the Underwriting Department and Claims Department.
Here’s the simple answer: the first thing you need to do is bring up the issue to your claims adjuster, which you’ve done. Next, request to speak with his superior, such as a claims manager. Run the issue by the claims manager. If the manager doesn’t budge, now request that State Farm launch a “Coverage Investigation” of this issue.
A coverage investigation is an E & O investigation, in this case it would be pertaining to your communication with the agent and how you brought up concerns about potential coverage for custom equipment on your vehicle.
After the coverage investigation is launched, I would highly recommend you find a way to reach out to corporate to file a complaint with the agent. This complaint is taken very serious and once it’s done they tend to follow up with you even after the coverage investigation has concluded. Think of the people from corporate as being you advocates because they know you have no one else on your side since that normally would have been your agent.
BTW, if the claims manager refuses to launch the coverage investigation, usually filing a complaint with corporate will.
If coverage investigation concluded and it’s still not in your favor, the very last course of action you have is to get an attorney and also file a complaint with the State’s Department of Insurance.
These 2 are the least guaranteed and can take the longest.
But for that kind of money though, it would be worth it.
——
Although I do not work for State Farm, if the agent wasn’t sure about custom equipment coverage, their answer to you back when yall discussed about it in the past should have been “No, there is no coverage, but let me check and confirm”. This is where they need to reach out to either a company contact that could tell them the right answer and they now have someone to point the finger to instead of themselves being wrong, or even someone from claims department to simply run the coverage concern by them.
At my company, Allstate, we do offer a coverage you can add called Custom Equipment, but there are limitations such as it can’t be anything that increases the power output of the motor, so no performance adders. Custom equipment is more like a special sound system, custom paint/wrap, custom or aftermarket wheels, truck lifts, etc.
It also pertains to adding a lift system for someone who needs accommodation for a wheel chair (if not already installed by the factory).
So custom equipment is an additional coverage, but this can be different from my company to another as it’s NOT one of the base level coverages, it’s an additional coverage.
Hagerty is one of the few insurance companies that will insure a vehicle for an “agreed value”. You may want to try them next time with classics, custom, and specialty vehicles.
Anyways, hope this helps, and don’t listen to any of these knuckle heads telling you that you messed up by not reading a bunch of stuff your agent is supposed to read themselves and then translate it to you. If you brought up your coverage concern to your agent before anything had occurred, then you did what you’re supposed to do, and your agent failed at doing what they were supposed to do for you.
Otherwise, what is the point of being an insurance agent, a basic paper pusher? Unfortunately there are lots of agents that just don’t care and get things wrong but out of their own pride rather than just finding out the truth for themselves and the insured (you), but those agents need to be held accountable to quit doing that, that’s the Coverage Investigation.
I would highly recommend you consider switching to another insurance company after this.
If you wish to come back to State Farm, do this after 1 year and find an agent with more experience or with a detail oriented mentality (one that clearly enjoys explaining things to you).
I wish you luck.
First off, I’m very sorry you lost your car in a flood & the coverage wasn’t what you believed it had been.
I’m a retired claims adjuster (not State Farm) and I’m not familiar with State Farm’s policies.
What I would recommend, before seeking legal counsel, is collecting copies of every single piece of written communication you had with the State Farm agent which I trust outlined what coverage you were seeking as well as what the agent outlined the policy would cover. Discussions are great but after the fact everyone’s memory of them is fuzzy. Letters and emails live forever (which is why, as an adjuster, I always followed up any conversation with a customer in writing to memorialize the conversation).
I work for State farm . We do not offer stated value policies. As others said, errors in the missions is the way to go, especially because you have their email in writing.
I was a young, new homeowner once and thought I had sump backup coverage because I emailed the agent to confirm and she said yes I did. Well, when the flood happened and my basement was destroyed I felt overjoyed and confident that I was about to get a new basement…lo and behold, it was never added to the policy or on the contract I signed, I trusted the agent and didn’t read the details myself. 50k out of my own pocket later my basement was redone. The insurance company? State Farm. They never got another penny from me. I should have read and confirmed myself, yes, but what good is dealing with an agent and having their word if it’s not going to be honored? I feel your pain.
You have plenty on answers about the M2.
For the other car, if you were opting out of physical damage, that includes flood. If you did not purchase comprehensive on that vehicle there is not much that can be done.
>My renters policy that was sold to me under the pretense that you could turn my apartment upside down and shake everything out, how much coverage do you need? My $150k policy only covers fire
That is the easiest way of explaining contents coverage. With renters the agent doesnt know how much stuff you have to pick a limit, so that is why its asked. Flood is excluded in all home/renters policies. There should be a list of covered perils in the policy documents, it is likely beyond fire
Question: was the car under business insurance? Or personal? If you’re claiming $60k modifications for promotions for your business, but the car is personally insured… you might run into a problem there. Saying it’s used for business sends a bunch of red flags to insurance companies because that’s an entirely different liability. Regardless, as a car enthusiast myself, sucks to hear this. I know you put a lot of work into the car and had pride in it. Definitely understand that feeling.
You should have read and understood your policy. Don’t just blindly accept whatever the agent produces.
You can invoke the appraisal provision and see if that helps