In recent years, the behavior of most homeowner’s insurance companies has changed drastically. Many companies will now cancel your policy if too many claims are filed. In some cases, policies have been canceled if only one or two claims have been filed. Some people have seen their policies canceled just for inquiring about a potential claim. Additionally, if your policy is canceled, it can become very difficult to get new insurance through another carrier. Many customers who have had their insurance canceled must go through their state’s re-insurance pool to obtain insurance on their primary residence. This re-insurance pool often has rates which are 50% to 100% higher than standard insurance rates.

Given the above information, it is important to proceed with caution in future dealings with your insurance company. First, use your homeowner’s insurance for only major/catastrophic claims. Since you will only be using the insurance for these major claims, consider increasing your deductible to $1000 or even $2,500 and reducing your rates. Increasing your deductible will help reduce your risk of being canceled. Second, if you are investigating a potential claim with your insurance company, you should probably do it anonymously. This includes not calling from your home phone, since they do use caller ID to identify the customer who is calling. Third, make sure that you are carrying enough coverage on your home in case of a total loss. Many insurers now limit their replacement cost coverage to 125% of the coverage amount. Therefore, it is important to make sure that 125% of your coverage is sufficient to rebuild your house if it is completely destroyed. You should evaluate your coverage amount once a year to ensure that your coverage keeps up with the building costs in your area.

Finally, many insurers are now using credit scores as one of the criteria for determining your eligibility for obtaining homeowner’s insurance. While some states such as California have banned this practice, many other states have not taken any actions in this area. Therefore, it is more important than ever to maintain a good credit standing. Due to a new law enacted by Congress, the credit bureaus must now provide you with a free copy of your credit report once a year. By September of this year, this law will take effect in all 50 states. To get your free credit reports you must go to the website: www.annualcreditreport.com

          - This report was provided by Carl Kiger of

                            Oak Wealth Mortgage Group

                                  www.oakwealthmortgage.com

Tags: Triangle Real Estate //