Family facing foreclosure over Frankenmuth Insurance claim battle

ALTO, Mich  — Seth and Haley Budrew say Frankenmuth Mutual Insurance Company has made their lives extremely difficult over the past three years.

In February 2014, a snowstorm caused their two-car attached garage to collapse, causing structural damage to the rest of the property, the Budrews said. That includes cracks in the ceilings and gaps in the walls. They said they hired the insurance company's "preferred contractor," who may have caused more damage to the structure.

The Budrews said they got an estimate for repairs from a restoration company. "It's a 170-something thousand dollars to fix it," Seth said.

Despite paying on their homeowner's insurance policy, the Budrews said Frankenmuth Insurance denies and refuses to pay their claim.

"All I want is my house to be fixed, [and] my kids to have a secure place to live," Seth said.

But after four months and hiring an attorney, the couple said Frankenmuth shelled out a fraction of the estimated cost for repairs, about $46,500 dollars.

For years, the Budrews have been in and out of court fighting Frankenmuth to get their entire claim paid. They said they won judgments for smaller amounts, but Frankenmuth has refused to pay some and has filed appeals. The Budrews say that in August 2015, an independent panel recommended a settlement of $150,000.

"They never responded," Seth said. "They basically let it expire. We accepted [the decision]. They rejected it."

They said Frankenmuth also cut off temporary relocation assistance, as the family awaited repairs to their foundation.

"We had to have a court order for them to not drop us,"​ Haley said.

"Our insurance company then turned around and jacked our premiums to $10,421 for one year," Seth recalled. That's up from $1,300 per year.

The couple said they tried switching providers, but "we can't get another insurance company. Our house is in such disrepair," Haley said.

"I called 10 different agents. Every single one of them said, 'No insurance company is going to cover you because of the liability of the damage,'" Seth explained.

While contesting the premium hike, the couple said the state insurance commission did nothing. "They agreed with Frankenmuth," Haley said.

"They didn't do anything," Seth added. "They're like, 'Oh, well yeah. Their risk is higher.' I'm like, yeah, their risk is higher because they won't pay to fix the house."

With four young mouths to feed and Frankenmuth raising their premiums, the family said they're financially strapped and have fallen behind with the bank.

"So now they're in the process of... they're going to foreclose on us," Seth said, adding, "I purchased insurance for my home so that I wouldn't have to go through this, and the insurance company did not fulfill their end of the bargain."

"Friends don't let friends buy Frankenmuth Insurance," Haley said.

Frankenmuth declined an interview. However, vice president of claims Andy Knudsen stated, "Both parties are represented by legal counsel. Frankenmuth is currently in settlement negotiations with the other party's attorneys. We won't litigate or negotiate the issue publicly."

(You can contact Problem Solvers via email.)

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14 comments

  • PAUL

    this is pretty standard behavior nowadays with insurance companies. Al their tv ads portray them as your friend.. in time of need., until u actually need them. Then.. it is their job to pay out as little as legally possible. Really happy collecting premiums… not to happy to have to pay out. I had a claim a year or so back..and the company I had proceeded to drop me.. basically because i didn’t have a nice brand new dwelling.. extremely free from liability. It seems they really dont want any risk anymore.. just premium payments. Insurance companies are vicious and uncaring.. so dont be fooled. Policies are filled with so many disclaimers.. which free them from alot of liability.. rather than just taking care of the paying customer. I personally am in the middle of a “storm damage” claim. and am waiting for the “bad news” from the company I deal with. Good luck

  • Regina

    We had the same problem with Frankenmuth. We had a pool and it got damaged with an really hard cold winter because the ground heaved during a storm and they wouldn’t pay. No big deal we just put a different pool in to replace it. Then they decided to hike rates and then decided to be really fussy about our property. We had just built a deck off of our back door which had steps to it but we hadn’t gotten the railing on yet. They threatened to cancel us if railing didn’t get installed in 30 days. They even wouldn’t let us have guaranteed replacement cost on our policy. So after this we found another company and had gotten guaranteed replacement cost again at even a cheaper premium. We had Frankenmuth for at least 24 years and only had a couple claims and they weren’t fault of ours. Such as the windstorm of 98 and when consumers electric had installed our meter incorrectly and caught fire. We paid premiums of more than $1000 a year for that time and never made any huge claims. Not to mention no guaranteed replacement cost part of that time. Definitely don’t buy from them.

  • PAUL

    unfortunatly.. its the norm these days in the insurance industry…if they have to come out to your home… watch out.. the list will certainly be brought to your attention..of THE THings yu must do to “comply” , or else.

  • Sheri Larson

    I’m sorry…but there has got to be more to this story. We’ve had Frankenmuth Insurance for many, many years for our vehicles, home and cottage. They have been great to work with. We’ve never had a problem with claims.

  • Rick

    I had auto insurance with Frankenmuth and had a terrible experience. I was rear-ended by a drunk driver going approximately 40 mph while I was waiting at a stoplight. My car was completely totaled, and I was fortunate to survive. I had neck and back problems from that accident that progressively got worse over the next few years. Frankenmuth began contesting my medical bills after a period of time, and it was clear I was going to be in for a long, legal battle in order to get them to pay for what were legitimate medical expenses resulting from that accident.

    I finally gave up, which is probably just what Frankenmuth wanted and why they purposefully contest legitimate claims. Their goal is to wear you out. I commend the Budrew family for staying the course. I will never use Frankenmuth again, and recommend that anyone who uses them for their insurance needs to think twice. After paying for car insurance my entire life, they completely failed me the one time I actually needed them.

    • Sheri Larson

      Rick, I actually had quite the opposite experience with Frankenmuth when I was hit by a drunk driver in mid-August this last year. (I was quite surprised to be alive after being t-boned in my Buick) They were timely and handled our claim quite well. Perhaps this had more to do with the particular claims agent that handled your case, than mine. I’m sorry you had that experience.

      • Rick

        Sheri, sounds like you’re OK with that company – so good for you. That doesn’t negate the very negative experience I had with Frankenmuth. The way they handled and contested my medical bills and any treatment that I received that was 100% associated with injuries from that accident was unacceptable. I’ve been a driver for 40 years, and this was the first and only time I had ever been injured from a car accident. I thought that’s the reason I had been paying premiums all of these years, as I finally needed to use my insurance. Instead, Frankenmuth’s focus was not on me as a customer, but saving money. It was clear their legal experts knew exactly what to do to fight me every step of the way. As a business professional and someone mistreated by this company, I would never recommend Frankenmuth to anyone.

        • Sheri Larson

          Rick, I’m sorry to hear that. I’ve got 35 years of driving experience and would be happy to refer them to others. In fact I have. I’m a Realtor and have had my clients that ask me who I recommend for a homeowners policy. I reccommend Frankenmuth and a few others for them to compare and decide what works best for them. We all have different needs and have had different experiences.

          • Rick

            Again, we differ in our opinions. Frankenmuth is the last company I would recommend to any friend or family member. I also noticed you’ve come to their defense on other sites where people have expressed negative opinions. It makes me wonder if your ties to the company are only as a customer.

        • Sheri Larson

          Rick, I am not affiliated with Frankenmuth Ins in any way other than being a long time customer. I am however very concerned about someone dragging a company thru the mud and into the media spot light n order to turn things to their favor. It’s exploitive. I am such a satisfied customer, I’m more than happy to stand up for this company. We’ve had other claims prior to me being hit by the drunk driver late this last summer snd they have always done right by us. I was shocked that so many who do not, nor have never had any experience with Frankenmuth would trash them. Too many times all you hear is the negative…as they are the complainers. That doesn’t correctly portray this company (or most companies for that instance) and am intelligent to understand that. I also realize that the only side that we hear about on this particular claim is the ‘victim’. We all know that there are at least three sides. We may never hear about that, nor will we hear about the resolution…especially if it doesn’t come out in the ‘victim’s’ favor. I’d love to hear the follow up on it…not just when it makes ‘the problem solvers’ look good.

          • Rick

            Sheri, It’s fine for you to express your opinion on this article, which you did shortly after it was published. But to then continue to add additional entries trying to counter every negative post that past Frankenmuth customers have had seems dismissive. You already stated your experience with them, so why do you need to state it again after every other negative post? I’m a business professional that has had decades of work experience in customer-facing industries. I would not recommend Frankenmuth to anyone after the experience I had with them.

  • Jennifer

    It sounds to me like they had the wrong coverage on their policy as well as others that have had issues with coverage. It is important to have a good agent that understands your needs. Saving a few dollars here and there could cost you headaches in the event of such a loss. Frankenmuth has a very good policy if coverage was offered and purchased.

    • N

      Very interesting situation. There are quite a few unknowns… it would be interesting to know what was on the application, what was explained to the homeowners, how old the house is, what policy form, endorsements, exclusions, if ANY of the terms and conditions were explained or if it was simply about pricing. However, the contract is still the contract and policy language can be pretty cut and dry. There is either coverage for the weight of ice & snow or there isn’t. In addition, did the carrier do an inspection of the property during the underwriting period when the policy was first purchased? And if the carrier did not inspect the property prior that is their own fault if there was an issue prior to the loss that added to this situation. From the article it does not sound like the homeowners are building contractors or inspectors; and they used a preferred contractor how were they to know that the situation was getting worse? In my opinion if an independent panel agreed that a settlement of $150K was fair, there must be some merit to what the homeowners are saying. If there were judgements in their favor that the carrier has not paid…. there should be consequences for that. If the situation were reversed there would be consequences for the homeowners.