Homeowners Insurance = Heartache for Buyers

Homeowners insurance was an afterthought, when purchasing a home. You simply picked up the phone, called an insurance company, answered a few, brief questions and "Poof", your home was insured.

No More. Today, buyers need to start shopping for insurance as soon as the ink is dry on the contract. Buying homeowners insurance in 2005, can require dozens of phone calls and internet searches. There is also a very real, risk that multiple insurance companies will refuse to write coverage, either because of the house or the buyer themselves.

Risk, be it real or insurer-perceived, is the reason for the harsh, new underwriting guidelines. Rejection can result from a buyers past claims, credit problems or suspected or known problems lurking within the property itself. Regardless of the reason for rejection, the bottom line will be a huge premium increase, even if an insurer agrees to write the policy at all. Higher premiums or rejections mean that many buyers will be priced out of the home due to higher monthly payments or will simply be knocked out of the housing market because they or the property can't qualify for insurance.

We know that big brother is watching us closer than ever before. The big difference here is, while we know that our credit history is being tracked, virtually no one knows that their insurance activity is also being tracked and recorded. Insurance tracking, like your credit score, follows you and can even affect your ability to sell your house or buy your dream home.

ALERT: ADVISE FOR HOMEOWNER'S INSURANCE SHOPPER'S

To avoid becoming a character in one the insurance nightmare stories, the best advise is to start shopping for homeowners insurance as soon as your purchase contract has been signed and executed. When talking with an insurance company:

Home Sellers should...

• Disclose up front whether they've filed a home owners insurance claim in the past five years.
• Provide buyers with proof that the prior damage was properly repaired.
• Outline property features or improvements that reduce the risk of rejection from the buyers insurance company.
• Obtain a copy of your C.L.U.E. (Comprehensive Loss Underwriting Exchange) Homesellers Disclosure form at www.choicetrust.com If you have been denied coverage, the report is free.

Home Buyers should...

• Obtain a copy of their own C.L.U.E. (Comprehensive Loss Underwriting Exchange) report and address any errors in it. Pick one up at www.choicetrust.com. The report is free if you have been turned down for insurance.
• Request a copy of the C.L.U.E. report for the home they've agreed to purchase.
• Find out as soon as possible how much a homeowners policy will cost to make sure it will not prevent you from buying the house.
• Try a local or regional carrier, if possible.
• Verify reputable carriers by calling your state department of insurance.

ALL HOMEOWNERS SHOULD:

• Use caution about discussing potential claims with an insuranc broker because that information could end up in a C.L.U.E. report.
• Always use reputable contractors for insurance-paid repairs and keep all repair records.
• Research home improvements that could reduce the potential for risk.
• Consider bundling insurance coverage. Most insurance carriers give discounts to people who purchase mulitple policies.

If you have an experienced a difficulty in getting homeowners insurance for yourself or a property you are interested in, please email tommi@infotube.net and tell us about it.

Tomorrow we look the "Tales of Insurance Woes" and give you idea's for avoiding or surviving them.