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Insurance Carrier: Allstate
My mother owns a second home, a cottage in northern Michigan. Police called in July indicating that the cottage had been broken into and vandalized. My mother went to file a claim and her insurance company said she is not covered. She has had a policy with this company for 25+ years. They told her because the property was vacant or unoccupied (we can't get a clear definition), she is not covered. She thought damage due to break ins was covered. My mother has asked for a copy of her policy several times and has not received a copy yet. They keep telling her they are sending it. My mother has been talking to the 1-800 line for the insurance company and now thinks she needs a lawyer to help her. What would be the next best steps to take?
Insurance Expert Answer:
Given that the policy was in force for years, and the home is probably in an area where Allstate knows or should have known many if not most homes are "vacation homes" and unoccupied large parts of the year, unless your mother specifically lied on a written application and stated it was always occupied, Allstate may not be able to rely on any provision of the policy (if it exists) that says they are not liable if the home is vacant for more than 30 or 60 days. In point of fact, to be fair, vacant homes do pose higher than average risks as they become targets for thieves who can break in and take their time. So insurance companies have some basis for not wanting to cover them, yet most agents want to write the business and don't ask and don't tell policyholders there are policy exclusions in such circumstances. The first thing to do is to have her stop merely calling the 800 number and get stuck in some backwater call center where, too often, people don't do anything. It's well beyond the time for her to start writing LETTERS -- with a real stamp -- and setting out what she expects in writing. If she calls anyone, or gets calls, she should immediately be making notes with the name of everyone she speaks to, and the date and time and substance of the call. I'd suggest that she complain to the State Insurance Department (not that most of them do very much -- but she may get lucky). Also, given the limited financial loss in the situation (although $5-15k is personally substantial, it is a fraction of what's normally needed to make it worthwhile to sue). Thus it may be hard to get an expert insurance lawyer interested in the case. (I'll forward it on to one, who will only call if his firm is interested in it, which I doubt -- at least unless it is part of a much larger Allstate pattern.) A local lawyer could always send a demand letter, and that might spark reconsideration -- and there also is small claims court.