Understand Underwriting Goals of Homeowners Insurance

Understand Underwriting Goals of Homeowners Insurance
I'm Romie Brown. On behalf of Expert Village, I'm here to discuss your tips and tidbits on how to buy homeowner's insurance. In this clip, we're going to discuss underwriting philosophies and eligibility for coverage for insurance companies. One thing that's very important is that you realize that there are guidelines to getting insurance. Just because you buy a new home doesn't mean that it is eligible for coverage. So some of the things we have to consider is: the age of the home. Are there any perils at home, any slip, trip and falls? See if there are any prior losses. You can get this by talking to your insurance agent about doing a report, like a clue report, on said property, to make sure there are no prior losses. Plus, that helps you in the buying process. If there were prior losses on that property, that they were properly repaired, so that way before you buy the home. This can help you in the negotiation process with the price, as well. Prior losses are a huge thing in the insurance industry right now. Not only personally, but also for the house that you're buying. Insurance companies are very leery about houses that had, for example, water breakage in pipes on a constant basis. That means there's an underlying problem there that needs to be addressed. And until that problem is addressed, most insurance companies might back off that home, just because it's a loss waiting to happen. The average losses for homeowners is once every eleven years. That's taking into consideration the little old lady down the street who's been in her house for fifty years, who never had a loss. And then the young couple down the street who had two losses in three years. So the average is once every eleven years. So if an insurance company sees a house that's had a couple losses in the past couple years, that throws up a red flag. So it's very important to make sure you know the loss history of that home. And also protect your loss history to make sure that you're insurable.