“Like a good neighbor, State Farm is there.” That’s the slogan, but I don’t think any of my actual good neighbors would write me a check just because my backpack was stolen in Chile. That’s more of a crazy neighbor, I think. This past Thursday, I filed a claim online with State Farm and I received money the next day. Awesome. Like a crazy-good neighbor, State Farm was there*.
* I know, I know, I’ve been paying State Farm for years, so they’re just doing their job by covering the claim.
Filing a claim
My go-everywhere backpack was stolen a week ago in Santiago Chile. I got back to the United States on Thursday and made an inventory of everything that was lost. This task was made considerably easier by the fact that I published a nearly complete list of everything in my backpack less than a year ago: What’s in Greg’s go-everywhere backpack? I then called my homeowner’s insurance agent at State Farm and found out that I was indeed covered for theft and that I could file a claim myself online. This was super-easy to do. And I was able to upload the images from the aforementioned post to show what I had lost.
Processing the claim
The next day (Friday), I got a text saying that a State Farm agent would call me soon, and he did. He asked me to upload my list of items lost and a copy of the police report that was filed in Santiago. The only reason I hadn’t already done so was that I wasn’t sure what format they wanted for these things. It turns out that PDF files and image files are fine. He reviewed the documents while we were still on the call and he entered each missing item into a form after asking me how old each item was. By the end of the call (which took a total of 37 minutes), the agent told me how much money I’d receive and that I should get an email within an hour for accepting the funds electronically.
Accepting the funds
Approximately half an hour after the phone call, I received an email saying that the payment had been issued. Wow! I was given the choice to accept the money either via PayPal right away or to my bank account in 1 to 3 days. Since I didn’t need the money right away, I chose the latter.
Details
The claims agent came up with a total replacement cost for my items (which was higher than my own estimates) and then State Farm applied a depreciation amount to each item. They then subtracted my deductible. The result was the amount paid to me. Interestingly, I can get even more money back if I spend up to the estimated replacement cost. I’ll walk through an example to explain this (at least, this is how I understand it):
- The estimated replacement cost for my laptop was $1,535.
- The amount already paid to me (not counting the deductible) was $1,331.
- Now, let’s say that I buy a replacement laptop and it costs $1,600. In that case, I’ll upload the receipt and State Farm should then pay me the difference between the estimated replacement cost ($1,535) and the amount paid ($1,331) = $204.
- If I instead buy a laptop for $1,350, for example, I’ll only get $19 more back ($1350 – $1331).
Bottom Line
Overall, I’m thrilled with how quick and easy it was to file a claim and receive funds! I’ve already received enough money to replace most of what was lost, but as explained above I might be able to get back a bit more depending upon what I buy. Additionally, since we have several Business Platinum cards in our family and since each of these cards offer $400 per year in Dell credits, I’ll be looking to replace as many items as possible through Dell (or indirectly through Dell by buying Microsoft Xbox gift cards when available and then buying stuff from the Microsoft store).
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Whether or not your next year premium goes up, depends on multiple factors. Certain insurance companies do not raise rates for claims, unless there is a trend of claims. Investigate the top rated companies by Consumer Reports and none of them, treat customers based upon one claim.
Greg, for Michigan, investigate Erie Insurance. They don’t write policies in every state. Probably never will. But they do write policies in MI. I have had them for over 20 years. I have had claims. Some very substantial, and there never was any excessive rate increase after the incident. But they know that over 20 years, we only have made a few claims. On the hand companies like State Farm and Progressive, could care less about you or any other customer. Amica is also very good, but they are more difficult to get a policy from.
Regarding insurance, I assume you have travel insurance, perhaps an annual policy. Why wouldn’t you make a claim against that rather than homeowners?
No I don’t have travel insurance
I forgot which state you’re in, but if you’re in CA a state they want to pull out of, depending on the revenue you bring them you might also be at higher risk of cancellation. At the end of the day, don’t remember if this was a business or personal trip/insurance and thus may have different considerations due to your visibility.
On another note, you mentioned buying the MS giftcard from Dell; it seems that has been very hard as of late have you had any luck? or time to tell when July rolls around?
I live in Michigan.
Yes it has been much harder lately to find Xbox gift cards at Dell. We’ve posted when they’ve been briefly available. Last time that happened I jumped on and bought a bunch even though portal rates weren’t great at the moment. I was glad I did because they disappeared quickly.
Never file a claim for a small amount. Your premium increases will be many times more. The claim goes into a national database
I’m a current property (specifically, homeowners) claims adjuster for another company, active and licensed in all 50 states. You are almost assuredly going to see a rate increase for 1) filing a claim in the first place, and/or 2) loss of a claims-free discount. Whether that’s 1%, 10%, or whatever is dependent on literally 50-100 different underwriting factors at the time of policy renewal. Claims history, credit scores, and longevity are typically the three largest risk factors.
There’s a lot of speculative misinformation in this thread. I’m here to tell y’all, if you file a claim, and there is more than a $1000 impact, you are going to get a rate increase, period. Your insurance company is going to recoup the loss one way or another.
Finally, theft of contents is a usual coverage on homeowners, renters, and condo policies, but it’s usually limited to 10% of loss value away from residence premises unless specifically endorsed to full replacement value, often by specified rider or Inland Marine policies. Example: your full list of pack, computer, and contents may be $5000.. 10%=$500.. deductible is $1000.. now there’s no financial settlement for being below deductible. Your settlement being at or above full replacement, after deductible, for an off-site theft on a homeowners policy is very much a unicorn. For other readers, don’t assume you have this – you likely don’t. Call your agents.
Who was it who said “Keep your friends close, and your backpack closer”?
There is a risk that filing claims on home-owners or renter insurance may not only raise your premium but can limit your eligibility to be a “preferred insurance customer”, a.k.a. uninsurable. This status is shared between insurance companies so that it can be difficult or impossible to regain insurance once listed. This is the “blacklisting” that another commenter mentioned.
This happened to be after filing two rather small claims for theft in a five-year period. Below is a copy of the letter I received from State Farm when they cancelled my policy.
RE: Policy Number: XXXXXXXXXXXXXXXXXX
Policy Type: Renters Policy
Location: XXXXXXXXXXX
XXXXX CA 12345
EXPIRATION DATE: September 16, 2013 12:01 A.M.
Dear Policyholder:
Thank you for allowing us to provide your insurance under this policy. We
are sorry that we cannot continue this insurance. Therefore, your policy
will not be renewed, in accordance with the terms and conditions of your
policy and the laws of the State of California.
This insurance coverage is no longer acceptable to State Farm General
Insurance Company because of your overall claim activity. Our records
show the following loss(es):
CLAIM NO. DATE AMOUNT CAUSE
XXXXXXXXX 10-23-12 $495.50 Theft
XXXXXXXXX 01-10-08 $3,007.15 Theft
For your protection, you are urged to secure other insurance to prevent
any lapse in coverage.
If insurance cannot be obtained, you may be eligible for fire coverage
through the California Fair Plan. Details may be obtained from this
association at:
PO Box 76924
Los Angeles CA 90076-0924
(800) 339-4099 or (213) 487-0111
If you have any questions, or additional information is desired, please
contact your State Farm agent, XXX XXXXXXXX, at (XXX) XXX-XXXX.
If you remain unsatisfied after speaking with your agent you may have the
matter reviewed by the California Department of Insurance. The unit in the
Department of Insurance that responds to customer inquiries and complaints
can be reached as follows:
Call the Department of Insurance’s Consumer Hotline at:
1-800-927-HELP (4357)
Out of State Callers use 213-897-8921
Telecommunication Device for the Deaf dial 1-800-482-4TDD (4833)
Telephone lines at the Department of Insurance are open from 8:00 A.M. to
5:00 P.M. Monday through Friday, excluding state holidays.
Sincerely,
Connie Corbett
Personal Lines Underwriter
State Farm General Insurance Company
It doesn’t have to be a whole backpack either. (NOTE: This is also a nod to Apple AirTags.)
My daughter is living in DC and had her backpack in the back seat of a friend’s car as they went out to dinner. Nice neighborhood, considered safe by most. On returning to the car they found the rear passenger window smashed and her backpack gone. In the backpack: Her MacBook Pro, Beats Studio headphones, AirPods, a bunch of school notebooks, and the keys to her apartment (with an AirTag clipped on).
She and her friend went through a bunch of gyrations between DC and Maryland Police over jurisdictions and where to file the police report, and searched a bit in the dark area while they were told the backpack and all contents were probably gone for good.
Good news 1: When my daughter moved to her first apartment (sophomore year in college), we set her up with Renter’s Insurance through a company called Lemonade. (Nearly everything is done through their app, including claims). I messaged them and found that everything was covered, less the deductible. I just needed to figure out costs for all her stuff, the laptop being 2+ years old, and provide a reference number for the police report. Once I had that, the claim was paid a day later and we bought a new laptop the following week.
Good news 2 (AirTag portion): The day after the theft, my daughter and her friend went back to “the scene of the crime” and started walking the woods. Within a few minutes, her phone picked up the location of the a
AirTag, and they found her backpack with everything EXCEPT the laptop inside. So the insurance claim got smaller, but was paid almost immediately none the less.
I was reading my usual financial blog (bogleheads.org) and this is what happens to some people when they file claims. A different situation but unfortunately isurance companies aren’t on your side. I once called to ask about something and just by asking they counted it as a claim despite them not paying anything. This was 20+ years ago.
Stolen backpack while traveling internationally is covered under homeowner’s insurance? What coverage is that considered?
I don’t think they differentiate between local theft and international theft.
So, it doesn’t have to be stolen from inside your house? Even if you’re outside the house like locally?
Correct
Is a stolen backpack even worth filing an insurance claim?
I cannot imagine myself filing a claim for a backpack, even an expensive one, on my home owners.
I would have to be into a claim somewhere above 5K at least. Even then, I would have to think about it.
It’s pretty obvious a lot of folks that thumbed you down are not homeowners or they’re really ignorant about a homeowner’s policy works.
File too many claims on your house and your house will get blacklisted for home owner’s insurance. Home owner’s insurance should only be used in catastrophe situations, but oh well – whats done is done.
In all, there is no free lunch, and the insurance companies are not your friends.. and I’m talking as a former state farm policyholder.
I did not get one notification until you responded.
I mean, it was a question so I am not sure why I would have thumbs down anyhow. I guess they are somehow supporting their travel gurus.
I read the emails I get with consistency, but disagree with quite a bit of what I read.
My question was a very fair question, but I honestly have only ever received one reply after posting multiple questions on their posts. Oh well…
As you said, what’s done is done, but I am quite sure that filing a claim was likely not a great idea in this situation in-spite of getting thumbs down on my original post.
Thanks for the response.
I agree, and learnt my lesson the hard way.
It never even occurred to me not to file a claim. I mean I’ve been paying insurance for many years — why shouldn’t I get something for it?
I have no personal experience with this, but my understanding is that they’ll jack your rates up because you made a claim. Supposedly the optimal homeowners insurance strategy is to save money by having a very high deductible, and then only filing a claim when you have a major loss.
Insurance companies don’t give you the benefit for past years of payment, they’ll raise your next premium because of this claim. We hold insurance policies for catastrophic losses, even a laptop isn’t catastrophic.
I received bad advice from State Farm about 10 years ago to file a claim for a parking lot fender bender. What would have cost me $485 out of pocket to fix on another car ended up costing me close to $2k in higher deductibles. State Farm knew exactly what they were doing advising me to file a claim…
I’m curious if your insurance rate would go up the next year.
I hope not but I’ll post an update if it does
I came here to say the same. Will be curious to know how much it goes up, typical increases of late have been 10-15% tops so if you have a massive increase this is why. Hopefully not, my understanding is one claim isn’t going to hurt you but two in a period of a few years could be a problem. So I wouldn’t file another claim barring something being crazy expensive unfortunately. One reason why it’s great to cover things such as jewelry and expensive equipment with a separate personal articles policy.
I definitely understand that mentality, but I have always felt the way that insurance is implemented is a scam. I have had the same sentiment about insurance for years. We pay a lot of money in, but when we need a few thousand back out for a claim, rates jump. It makes no sense.
They make billions every year. Either individual, or major area incidents make premiums go up.
on the surface, they tell you that it doesn’t work that way, but it absolutely does.
I had an agent at Liberty Mutual who I had gotten to know quit well tell me that he left them because he was having so many complaints about how fickle the rates were from his customers.
My best advice is to carry a home owners, and a renters policy. They are actually not the same. Lemonade is a decent option for renters. They give you a lot of control over your options right within the app.
I could give more information about what I know, but this comment would just go on.
Hopefully, they do not hit you with a massive increase.
Not only might they increase your premium rate, but there is a risk State Farm will simply close your policy and ban you. It happened to me after filing two small claims over five years (see my lengthier comment posted below).
To be clear, it’s the contents of the backpack for which Greg was filing the claim.
That was clear, but the backpack was apparently expensive as well.
when I said backpack, it was inclusive of the entire claim, which I hope did actually include the price of the backpack.
You are spreading the paranoia without logic.
Even the insurance companies jack up your rate, the increase is NOT anywhere close to what they pay for your claim.
My car was totaled by an speeding SUV when I made a U turn at the light which turned yellow in the middle of my turn. The SUV sped up immediately when the light for her turned green, hit my car’s right front corner and made my car did an 180 degree spin, all airbags front and side, deployed. SUV was so fast that it flipped 3 times before landing on the back tens of yards away on the road’s right side where there is lined with wide swatch of lawn.
Police initially claimed I was not at fault but somehow the other driver was able to get some bogus eyewitness to claim I made an illegal turn. Even after that, police did not issue me a ticket.
The outcome was insurance paid the comparable listed prices of the 2 highest ones in the 2 county areas minus the deductible.
The other driver sued It was eventually settled without going to court after many rounds of back and forth between Geico and the other party’s lawyer, to the final payment of $35K out from the initial sued amount of $100K (my coverage). The medical bills she submitted were $20K+ in total fwiw.
The increased rate on my auto insurance? <$200 per 6 months policy, listed separately as Insurance claim surcharge. The actual rates of all other items are comparable to friend’s coverage with Progressive, with Less amount of coverage. So there is no increase in the rates but a separate surcharge of insurance claim which will remain for 5 years if I understand it, and it would decrease slowly over the 5 years period if you dont have another claimable accident.
You can do the math easily – $200 x 2 x 5 = $2000.
Geico pay $7000 for my car which no way I could get $7000 selling it myself before the accident, because Geico used dealer’s list price on used car!
Geico also paid $35K to the other driver as settlement.
Now please tell me, just HOW the insurance company would “scam” you so you are so afraid to file a claim while you still need to keep a policy, to protect for WHAT, if you could not use it?!
Such an urban myth being spread all years by people who do not have any logic nor analytical skill.
Remember, numbers do not lie. If you are lazy not get down to calculate the numbers, just go with hear say, you will forever be a Loser!
There is a lot about your statement that is not even relevant.
To the rest, ok man. Maybe you should do some research; hands on!
Why is not relevant? Talking about Home Insurance, living in Florida for decades I have seen more than my fair shares on how insurance companies operated when areas are constantly struck by natural disasters, just like those now living in CA have seen – the big insurance companies pulled out of the state. Your state government has to step up in the plate and creates an insurance pool that is supported by the state funds so to provide protection for the state residents. Florida set up the Citizen insurance corp to offer insurances to those lost their policies thru no fault of their own, some did not even hit by the hurricane and had no claim but the providers just pulled out…
All the people here paying the insurance premiums for protection, yet when the event arrives that you need such protection, you are afraid to file the claim for fear the premium will go up so you would lose the protection which you dont even dare to use?! Just what kind of the logic that is.
I do not buy the argument about that one should eat the relatively small and affordable loss in order to be protected when there is a big hit… Such foolish thinking.
Insurance companies business models are based on actuary which compiles and analyzes statistics and uses them to calculate insurance risks and premiums.
Filing a personal property loss would not jack up the premium next year, unless you are a habitual filer that would become a portrait of a fraudster. Get it?
Another thing to remember, insurance companies INVEST the premiums they collect – they prefer the relatively risk free investment – when the interest rates were very low like before 2022, insurance companies suffer because they have to venture into more risky equity market to make gain. Now in a high interest rate environment, they can earn 5+% APY without any risk just by loaning their money to the Fed. They make much more when the Fed fund rate was basically a Big Fat Zero.
There are so much urban legend style stories in the comments I could not believe people are so uneducated.
It was irrelevant because you were discussing your experience with an auto claim.
Also, you can believe what you want to believe, but rates will go up with claims. When I processed my claim for the storm that came through Texas, my desk adjuster actually told me so. I thought it was weird that she was so honest, but we discussed it, and she did say that was common.
sure enough, it went up. Oddly enough, they almost doubled my policy, but they did not reschedule the roof that they had just paid for. After rescheduling the roof, my policy went up a net of about $400.
I don’t know why you believe what you believe, but I am old enough to have seen even family members be told their policies would not be renewed because of having 2 claims in their history.
I am not here to convince you, or anyone else, but to give my personal experiences and accounts.
I wish everyone the best of luck keeping great insurance rates. Personally, I am not filing a claim for a couple grand.
I think you know as well as everyone else it depends on the size of the claim.
1) Your Uber driver set you up. It’s a common scam in South America.
2) Never put anything of value that is also easily portable anywhere but on your lap. If thieves want to steal something, make sure it’s something heavy and that slows them down. You made a fundamental mistake, surprising for someone who travels so much.
-3 those Idiots your BP on Lap and important Stuff just a little bit lower Kids..No trouble ever..V Bernie
That’s fantastic and really good to hear. I worked for State Farm 21 years and was always impressed with their claim handling process. Glad to hear that they are still as good as before.
@Greg, were you able to remotely wipe the data from your computer after it was stolen? Was the hard drive encrypted? Or maybe for traveling, you just use a sanitized laptop with no sensitive data in it…
Always a potential nightmare, a thief gaining access to sensitive data, especially financial, identity, etc.
What world is SamBam living in? Or hopefully it is just a sarcastic remark. Insurance companies are in the business to collect premiums not to pay out claims. I remember vividly filing a claim with Farmers in 1997 for a underground pipe rupture for our multi-family units. They canceled the policy the very next year. Now I have business insurance with State Farm but I have no plans to file any claim. Living in CA with fires, drought and flooding, it is virtually impossible to find another insurance company to unwrite your policy.
Agreed. Living in CA, I would never file a claim for anything that wasn’t a monumental loss. I had to file a claim for water damage a few years back and over the subsequent 3 years my (already substantial) premium doubled. Add that to the fact that insurers are fleeing CA so I probably couldn’t get anyone to cover me if I did try and change insurers.