Home Owners Insurance Blog

For a lay person, it is difficult to imagine how there could be a correlation between credit scores and home insurance premium. However, a large number of insurance companies use the credit score to arrive at an insurance score using customized software.

According to insurers, people who better manage their finances are less likely to file insurance claims. Thus, insurers give preference to customers with better credit scores and are likely to charge them lower premium for their home insurance.

Insurers will typically use credit scores in conjunction with data like construction quality of the premises, location and risk from disasters amongst others to arrive at the risk profile and the applicable premium.

Thus, there is reason to cheer for those who command a good credit score. They must ensure that they negotiate a good premium rate for their home insurance, knowing well that insurers factor this into their calculations.

To read more about this correlation, clickhere

Most of us don’t realize, but there are several checks that we can undertake to minimize our premium outflow on home insurance.

First is to raise your deductible. Deductibles are the amount that one has to pay towards a loss before the insurance company pays the claim. If your deductible is higher, you will be able to save more on your premium. The usual recommended deductible is $500. If you manage to raise this to $1000 you can actually save as much as 25% on your premium. Also, if you live in a disaster prone area, you will be eligible for separate deductibles for the given hazard.

While buying your homeowner’s insurance, don’t add the value of the land as the land itself is not prone to damage. If you add the value of the land, you will be jacking up your premium for no reason. Try to buy your auto and home insurance form the same insurer and there is a very good chance that you can squeeze out an additional 10% to 15% discount. Always prefer a private insurer to a government insurer as the former are usually cheaper. Besides these checks, always review your homeowner insurance once a year. You may have discarded some expensive things or they may simply worn out, for which there will be no use paying a premium.

To read more on this topic, click here

When you go in for homeowners insurance, man’s most faithful pet, the dog can pose a likely problem. Depending upon the breed of the dog insures by law, can actually deny you insurance or charge you additional premium. Some insurers are even persuading their long time customers to get rid of their dog if they want to continue with their covers.

The American Kennel Club has taken a legal position on this issue. According to the organization, insurers should take into account the dog’s behaviour and not its deeds. It goes on to say that a well behaved dog is actually an asset for the home as it can deter intruders from entering the premises or alert the homeowners of an intrusion; in reality, prevent a theft from occurring and there seems to be no reason why insurers should deny covers to homeowners with dogs.

Homeowner insurance is a package policy that provides financial protection< for your home and belongings against disasters. The standard homeowners policy provides coverage for the structure of your home, your personal belongings, liability protection and additional living expenses if your home becomes unliveable due to a disaster for which it is insured.

Different types of homeowners insurance policies include HO-1 that provides limited coverage. It is no longer available in most states now. HO-2 provides protection against 16 types of disasters. HO-3 provides protections against all disasters except those specifically excluded. HO-8 is a policy designed specifically for older homes. HO-6 is a policy for condo owners. It provides protection against all 16 disasters. HO-4 is a Renter’s policy, specifically for those living in rented accommodation. To read more on these policies, click here.

Under usual circumstances, a homeowner never has a problem is getting his home insured at a reasonable premium. But, what if you own a mobile home, the same rules do not apply and you could be in for a surprise, when you hear from your insurer that your policy is being cancelled!If you own a new or relatively new mobile home, you would not have a problem in getting it insured. But, as it starts getting older, insurers tend to start getting wary and either they jack up the premiums or cancel the policy.

If we review the situation in Florida, mobile home owners in Manatee County feel that they are left with three options. They either have to pay higher premiums for their mobile homes, or they have to pay double the premium with the state’s insurer of last resort Citizens Property Insurance Co. or have no insurance at all.

What happens when the insurer of last resort is about to go bankrupt? We begin to question our faith in the insurance industry and wonder if all the dollars we paid for our home insurance might go bad.

Such is the plight of Citizens Property Insurance Corp after having made huge payouts on account of the infamous hurricanes, Rita and Katrina. It is being touted that the state run insurer is left with enough money to make payouts for another week. According to a company spokesperson, the insurer is left with about USD 64 million and has been making average daily payouts of about USD 5 million, with the rate of payouts slowing down now.

The board of the insurance company is making desperate efforts to raise bridge loans and has approached JP Morgan to recommend a strategy. It is believed that JP Morgan Chase has agreed to extend a loan of USD 125 million and will attempt to raise another USD 25 million through syndication. While, this amount will serve as a bridge loan, the insurer is expected to raise USD 200 million through a bond issue, which will hopefully pull it out of its travails.

We usually feel very happy once we get an insurance cover for our home. However, how many of us have faced the situation of making a claim against our insurance. This leads us back to introspect the fact that did we read our home insurance contract before signing on. If we did read it, was it a very reader friendly document or we couldn’t make much sense of it.

In reality, home insurance contracts are extremely complex documents and lay individuals like us would hardly have the patience to read through, leave aside understanding it. The clauses are usually drafted in such a way that they have multiple meanings. Insurance companies will tend to take advantage of these clauses in cases where multiple claims pour in due to a disaster as is in the case of the series of hurricanes.

Courts would usually tend to favor the claimants as they understand that the clauses are subject to multiple interpretations and an insurer will attempt to construe the interpretations in his favor. This implies that homeowners will need to move courts to recover their claims, which is not the best situation after having your home raised by a hurricane and having no place to go.