| These days, premium costs
are escalating at double-digit rates. Many insurance companies are
tightening renewal policies, and in some states, are no longer
offering new policies. This can make purchasing and keeping your
homeowners insurance policy more difficult.
Some factors that can affect your ability to obtain homeowners
insurance are:
- Location. If your home, or one you are thinking of buying, is
considered high-risk, meaning it might be prone to hurricanes,
windstorms, tornadoes, or hail; this can greatly affect whether an
insurer will cover you, and if so, whether it will be affordable.
Homes in high-crime areas are also prone to coverage issues.
- Age. If your home, or the one you are thinking of buying, has
old plumbing, electrical or heating systems that present a higher
chance of property damage, this can also make obtaining coverage
difficult and expensive.
- Credit. Unfortunately, your credit history can affect whether
you are insurable, and in many cases, affect the rate you pay for
premiums. Through the years insurers have found a person's credit
information to be a highly accurate predictor of risk, according to
the Insurance Information Institute. While the factors that insurers
and lenders look at are the same, each weighs them differently. If
you suspect your credit history is the reason you are denied
insurance, be sure to get a copy of your credit report. Make sure it
is accurate. Better yet, check your credit reports before you apply
for insurance.
If you have attempted to obtain insurance from two or more
different companies, but were denied coverage, there are some options
available to you. If you are buying a new home, check with your real
estate agent, lender, or builder, for a list of companies that write
policies in your area. If the home you are purchasing is an existing
home, ask the previous owners which company insured the house. In any
case, ask your current insurance agent or representative for
assistance. Find out why you were denied coverage. If the problem is
not related to your home's location, but perhaps its condition, ask
them what you need to do to bring the house up to insurable condition.
You can also contact the Institute for Business and Home Safety for
information on natural hazards, community land use and ways you can
protect your property from damage. You can visit them online at
http://www.ibhs.org.
Another option is to talk to your neighbors. Find out through which
company they are insured. Talk to their agents about specific risks in
your neighborhood.
Give your state insurance department a call. Usually, they can
provide you with insurers in your area. You may have to get insured
through a state-run risk pool, operated by 29 states and the District
of Columbia.
If you are still unable to get insurance, find out if your state
has a plan known as shared market. FAIR Plans (Fair Access to
Insurance Requirements) are insurance pools that sell property
insurance to those who can't get it in the standard market. FAIR Plans
can cost more and may provide less coverage than a typical policy, but
they offer protection that you would not have otherwise. About 12
states have some sort of a homeowners policy, including liability. In
California the plan covers brush fires, and in Georgia and New York
they provide wind and hail coverage for some coastal communities.
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