Homeowners Insurance Policy Denials Increasing
Occurring more frequently, owners of older homes as well as some owners of new homes are finding it difficult to obtain insurance on their property. For a variety of reasons, insurers have closed ranks on offering coverage in situations where the home is considered high risk for a claim. It becomes a challenge for these homeowners to buy a policy in certain areas due to the occurrence of extreme weather or the increased likelihood of crime involving property damage or personal injury. In these situations, the homeowner is challenged to either improve the home to withstand or avert this liability, or to seek alternative means to insure his home.
Why Insurers Refuse to Issue Policies in High Risk Environments
If your home is not up to the task of being your fortress in uncertain times, insurers will deny writing you a policy. With your physical safety and the safety of your family at risk, not to mention all of your belongings and the home itself, insurers are only interested in offering a policy to you if it is extremely unlikely you will ever file a claim. Looked at with increased scrutiny are older homes whose electrical wiring, heating and plumbing may harbor hidden dangers. Happily, it may only take bringing these utilities up to code to rectify the situation. Other conditions may make it nearly impossible to find an insurer who will be willing to risk a policy on your home.
Currently insurers are even stricter renewing policies and stingier compensating homeowners who are insured. Although insurers are reaping record profits, the industry has been hit with huge expenditures in the wake if Hurricane Katrina and the wildfires in California. The insurance industry more than ever is looking out for their bottom line rather that offering service. Yet, there are avenues of recourse for homeowners. Consult with the former owners and local real estate agents for leads where you may turn for insurance. For those who own property in hurricane territory, or in high crime areas, FAIR Plans (Fair Access to Insurance Requirements Plans) offer homeowners insurance at a higher rate in 35 states. There are also similar plans specifically on the East Coast which cover wind and hail damage. Check with the Insurance Information Institute (www.iii.org) for other alternatives. Proactively-speaking, consider hurricane window and garage-door bracing, and other preventive measures.
Vandalism and Burglary
Every community is at risk for juvenile mischief and more intrusive crime. In especially high crime areas, insurers consider writing fewer policies due to the high likelihood of claims for this type of loss. You did not choose to live in a neighborhood because of it’s crime rate, but rather in spite of it, or perhaps being unaware of it. As a member of a community, and a property owner, it is in your personal and proprietary interest to become an activist in the effort to improve the community. Initiate a Neighborhood Watch campaign, encourage your neighbors to make their presence felt in the streets where incorrigibles are likely to hang out. Learn what other measures you can initiate to burglar-proof and vandal-proof your home. Alarm systems are an effective deterrent, as well as landscaping that discourages prowlers. In the long run, this may be the best way to obtain the security to which you and your family are entitled.