... about Homeowners’ Insurance

Are you having trouble renewing or even obtaining homeownerís insurance? Let me tell you whatís going on in the wonderful world of Big Business. You may find this hard to believe, but, according to the Washington Association of Realtors, insurance companies are actually losing money for the first time in recent history. This is the result of the decline in the economy, the lack of income from investment, claims that exceed premium revenue, plus some huge court judgments against the industry related to mold.

Let me clue you in so you can avoid some pitfalls. First, you need to know about CLUE (Comprehensive Loss Underwriting Exchange). This is a database system used by 90% of homeownersí insurance companies. It records auto and home losses and can be sorted by person, vehicle, or property. Insurers are now paying increased attention to CLUE due to more aggressive underwriting of water losses (itís that ugly mold again). As a result of these losses, insurance companies are closely analyzing risk and either not insuring high-risk clients or charging a higher premium for the coverage.

But what is high risk? According to a big wig at the Washington Insurance Council, a high-risk determination may be a result of multiple claims in a three-year period, water damage, post and pier foundations, outdated fuse box design, knob and tube wiring, rental homes, certain types of siding, buried oil tanks, bad credit reports, and new policy holders! Yes, according to industry statistics, new policy holders are more likely to file claims than established customers.

So, you may be thinking, ìDonít we buy insurance so we can protect our home and possessions and make a claim when we need to?î Well, according to the above-mentioned big wig, No. ìInsurance was never meant to be a maintenance contractóit is for catastrophic loss,î he explains. ìHomeowners need to maintain their homes and take care of small problems before they become big problems.î So folks, here is some very handy advice from yours truly for protecting your insurability.

Homeowners should:

• Be cautious about even discussing a potential claim with your insurance broker because that information could end up in a dreaded CLUE report.
• If you are thinking of making a claim, think twice, especially if it is related to water damage, unless of course you just can’t afford to repair it. I had some friends who made a claim recently after a pipe burse in their kitchen. They later got a call from a very kind person at their insurance company warning them that their policy was not going to be renewed, and that they should apply to another company before they were dropped, as the reason would be recorded and other companies would then know about it and not insure them either.
• Use reputable contractors for insurance repairs and keep repair records.
• Research home improvements that could reduce the potential for risk. The NW Insurance Council offers a couple of booklets to help with this: "The Home Maintenance Guide" and "Protect your Home from Water Damage". They are free and can be downloaded at www.wa-ic.org/in_hottopics.htm.
• Consider bundling insurance coverage. Some companies give discounts to people who purchase multiple properties.

Homebuyers should:

• Request a copy of the CLUE report for any home you agree to purchase as part of the transaction.
• Find out as soon as possible how much a homeowner’s policy will cost, to make sure you can afford to buy the house.
• Consider a local or regional carrier if necessary.
• Verify which carriers are reputable by calling the State Department of Insurance.

To get your own CLUE report got to www.choicetrust.com. It costs $12.95 for a credit/insurance score and an additional $12.95 for a history on your current home.

Please feel free to contact me if you need more info on this issue.