From State Farm to Chubb: What a $300 Difference Looks Like
A long-time client switched from State Farm to Chubb after a $200,000 claim dispute — and the annual cost difference was about $300. This is the story of how that happened, and what it means for anyone with a high-value home.
Mrs. Wong Had State Farm for 30 Years
I insured Mr. and Mrs. Wong's five commercial properties for years. Every time I asked, "Can I review your personal lines?" she'd say the same thing: "Paul, I've had State Farm for the last 30 or 40 years."
Here's what I told her. State Farm is the largest insurance company in the United States. They insure the masses. They insure tract homes. Mrs. Wong had a custom-built home in Palo Alto that cost millions of dollars to build. Those are two very different situations.
"If you have a claim with State Farm, Farmers, Allstate — those direct writers — they're going to pay for Home Depot materials to repair your home."
I'd been to her house. Everything was custom. Her kitchen had a floor made from brick salvaged from a church in Italy. That floor cost something like $200,000 to install.
Then the Water Leak Happened — and State Farm Offered $60,000
While we were having this conversation, she told me about something that had already occurred. They were away from home and a water line behind the second-floor toilet broke. Water leaked from the second floor down to the first floor — right onto that $200,000 kitchen floor. Destroyed it.
State Farm's offer? $60,000.
Mrs. Wong was in a lawsuit with State Farm when she finally let me quote her home.
Why Chubb Was the Right Fit
Chubb does 100% replacement cost. If your home is insured for $3 million, they'll pay up to $6 million to rebuild it. I showed the Wongs the Duberville Rebuild videos on YouTube — Chubb rebuilt a multi-million dollar home in the San Diego hills in six months after a wildfire. Six months. The original build took years.
Mrs. Wong said, "I want Chubb to inspect my house before you give me a quote." They came out, took 50 to 60 pictures, and produced a printed book showing line by line what it would cost to rebuild: framing, plumbing, electrical, HVAC — all detailed out.
Turned out she was underinsured by a couple hundred thousand dollars with State Farm.
The Cost Difference: About $300 a Year
Chubb requires that you bundle the umbrella and auto with the home. I warned her: "You're not going to like their auto rates." But I said look at it globally — what's the total bottom line cost of your auto, your umbrella, and your home insured properly?
When the whole thing was said and done, it was about $300 more per year with Chubb.
She was totally blown away that it was that close for that much better coverage.
And the Chubb $10 million umbrella over four rental houses, her home, and two cars? About $1,000 a year.
Key Takeaways
What This Means for You
If you have a high-value home — custom finishes, imported materials, anything that can't be replaced at Home Depot — you need to look at who's actually insuring it.
The direct writers are fine for a lot of people. But if your kitchen floor costs $200,000, you need a carrier that's going to pay for a $200,000 floor.
The difference might be less than you think.
Paul Nadler has been a licensed insurance broker in California since 1976. He is the third-generation owner of Nadler Insurance in San Carlos. Let's talk about your home coverage →