Getting the best homeowner’s insurance

Will your insurance company be there for you in the aftermath of a disaster, when you most need it? The answer might be no, according to the editors of Consumer Reports.
When Consumer Reports National Research Center surveyed readers about their homeowners insurance claims in the last few years, half of those who had filed claims related to Hurricane Katrina reported problems. That’s twice the rate of problems reported by other respondents.
Even if you’re nowhere near a hurricane zone, you could face catastrophe in the form of fire, wind damage or a lawsuit. It’s in those dire situations that you truly need coverage that lives up to its promises. Yet CR’s evaluation of home insurers found that doesn’t always happen.
Here are highlights of CR’s finding:
— Excellent coverage can be costly or hard to get.
— There are claims problems with some large insurers. In CR’s survey, 35 percent of Allstate Insurance Group clients reported such problems with that carrier, the nation’s second-largest.
— Delayed payments are common. Twenty-one percent of respondents said they had faced delays having claims paid.
— Insurers are scaling back coverage. They are imposing high deductibles for windstorms in many places and cutting coverage for mold and dog bites.
Tighter underwriting
If you haven’t shopped for homeowners coverage lately, be prepared: The landscape has changed. Insurers are getting pickier about whom they will take and whom they will keep. And they’re using new tools to determine who will get the best price.
An increasingly important pricing factor is your credit-based insurance score, which includes some of the elements that make up your credit score. The industry maintains that there’s a correlation between credit history and the likelihood you will make a claim. To get the best price from a new carrier, you will need a stellar record.
Insurance dos and don’ts
To get the best value and protection from your homeowners policy, CR recommends following these rules:
— Compare prices. Every five years or so, shop for the same level of coverage, including deductibles, policy limits and riders. Visit an independent agent or check online sites such as www.netquote.com or www.insweb.com.
Bundle your coverage. Buy several policies — home, auto, boat — from the same insurer to save up to 15 percent on all policies. The more business you do with your insurer, the less chance your coverage will be dropped due to a single claim or a risky home location.
— Raise your deductible. Going from $500 to $1,000 can save you up to 25 percent on the overall premium.
— Clean up your credit report. An insurer viewing a mistake on your report could deny coverage or place you in a more costly price tier.
— Maintain and upgrade your home. Fire and smoke detectors, burglar alarms and dead-bolt locks can cut as much as 20 percent off the premium. In storm-prone areas, add hurricane shutters and shatterproof windows.
— Stay with your current company. If your insurer’s rates are competitive, you might save by staying. Companies often give discounts for loyalty. They also might be less likely to drop a longtime customer for one or two claims.
— Do a home inventory — now. Experts say one of the most difficult parts of the claims process is recalling lost or stolen items and papers. Catalog your belongings, including receipts, with video or photos.
— Don’t file small claims. Insurers can raise your premium or even drop you for making, say, two claims in two years. Avoid filing a claim if it’s just a small amount above your deductible.
— Don’t call to discuss whether to file. Even if you decide not to make a claim, your inquiry could end up in your claims record as an incident, making you vulnerable to a premium increase.
— Don’t smoke. You’ll incur higher premiums. Also considered risky and possibly uninsurable: homes with trampolines and dog breeds that are prone to biting.

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