There are things about home insurance that you might not know yet but should. Home insurers do not want these things known because they will prompt complaints and stir possible investigations by insurance regulators.
But insiders who have seen these things and customers who have experienced them have revealed them to other people. Now it is your turn to know them.
Among their secrets are the ways they do to lessen their chances of paying out insurance claims. Without being upfront about them, some insurance firms do discriminate against certain people, refusing to issue policies when their insurance risk is higher.
According to findings by the Consumer Federation of America, some insurers have been instructing their agents not to sell to couples with marriage problems, older people with companions and residents of certain zip codes.
The house insurance policies of people who slightly increase their risks due to certain actions are also not renewed by some insurers, such as customers who make dog bite claims, who start a home-based business or who miss one or two credit card payments.
Worse, once a customer is dropped by one home insurance firm, the other insurers need lots of convincing before issuing a policy. Some others flatly refuse to issue a policy. Independent insurance agent Michael Grace said that insurance firms are purely business; they believe that some people are simply prone to insurance claims.
Insurance firms also use Comprehensive Loss Underwriting Exchange reports to look for past claim patterns. This service was launched to prevent fraud in the insurance industry, but it is now being used by insurers against persons who have filed legitimate insurance claims in previous years.
Former Massachusetts Insurance Commissioner Linda Ruthardt said that once insurers see a claims record in the CLUE report, many of them refuse to issue a policy even if the past claim was legitimate.
Policyholders have been asking their agents about the limits of small claims that they can file before they are branded as risky clients, but insurers do not give definite replies. Independent agent Ron Sundermann said that the policy of his client was not renewed by his insurance firm after the client made four small claims over a three-year period.
These are just some of the practices by insurance companies that you need to know. Be informed so you can get the best home insurance policy from the best company.