Fulton Woman's Question Leaves Her Uninsured

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FULTON - Calling an insurance company to ask a question may seem harmless, but what many people don't realize is that it could result in higher rates or dropped policies.

According to the Missouri Department of Insurance, it is legal for insurance companies to file a claim even if there is no money paid out. This is called a "zero dollar claim."

According to the department's communications director Chris Cline, "Zero dollar claims are sometimes used by insurance companies as a manner in which to evaluate future risk that a current or potential consumer poses to the carrier."

Michelle Lallier of Fulton learned about zero dollar claims the hard way. She was a customer of State Farm Insurance Company for 23 years and had seven policies with the company. Her home insurance claim history was pretty bare, only consisting of an incident in 2009 when her husband's truck was stolen outside a hotel parking lot. 

In May, Lallier's children had a minor wreck on an ATV. She called State Farm Insurance to ask if it would cover the incident under her home policy. Her agent said if she filed the claim no money would be paid out, so she didn't. Lallier thought that was the end of it, but she received an unexpected letter in the mail.

The letter stated Lallier and her husband, Jason, were considered too high risk to cover and their home insurance would be dropped as a result. To Michelle Lallier's surprise, there were two claims listed in the letter. The second claim was the claim she never filed, but only asked about.

"It said that in 2013 there was a claim, and when I looked into what it was, it was a phone call we had made asking if something was covered," Lallier said. "They paid nothing on it, it was not covered under our homeowners insurance, but it counted against us as a claim."

Lallier received little help dealing with the issue. She said her agent tried to file an appeal on the claim, but was unsuccessful. She also said an employee at the Missouri Department of Insurance told her State Farm did nothing illegal, so there was nothing they could do.

As a result of the zero dollar claim, the Lallier's not only lost their home insurance, but are now considered "high risk," which made it even harder to find a new insurer.

"We started searching and the first couple companies we called, it was going to be several, several hundred dollars more expensive," Lallier said. "The house is insured, we did find another company, but now there's a few other things they have to look at and work through to try and continue to insure us, and so it's become a big hassle and it's cost a lot of time and more money."

Lallier's experience with a zero dollar claim can help raise awareness to consumers. People should be aware of the risks of discussing matters with their insurance companies.

"I kind of thought, that you know, your insurance agents were there to answer questions," said Lallier. "I didn't see any harm in giving them a call and asking the question, but apparently if you make that phone call and you ask, then you're running that risk of them filing it as a claim. You just kind of feel like you've done everything you were supposed to do and they've kind of let you down." 

According to the Missouri Department of Insurance, there are nearly 138 insurance companies actively offering home coverage throughout the state.

According to Cline, "Missouri has a competitive market for homeowners insurance. The department encourages consumers to take advantage of that competitive market by shopping their insurance needs with multiple companies."

To file an insurance complaint, contact the Missouri Department of Insurance.