Homeowner Insurance Buying Guide

October 14, 2012
House In Hand

Image: Freedigitalphotos.net

Autumn is now finally upon us in Southern California.  Along with the changes in season, comes the change in weather. Summer brought heat and risks of fires, which many homes were lost to. Now with fall and winter come rain storms, floods, and mud slides. Whatever the weather may be like, ask yourself, “Are you prepared for the unexpected?”

Homeowners have insurance to protect your home, but when a large claim is reported, their insurers may not live up to their expectations. According to a survey conducted by ConsumerReports.org, there were 11,250 of their subscribers unhappy with the way their insurer handled their large homeowners claim.

The greater the damages, the greater the likelihood that home insurers paid less than expected, our survey found. Overall, almost 10 percent of respondents reported that they disagreed with their insurer over the amount of a claim payment.

But when damage was $25,000 or more, 19 percent disagreed with their insurer’s assessment of what was due. Those in the higher-damage group who disputed estimates, the insurers paid a median of $7,000 (or 20 percent) less than the claimed loss, leaving the policyholders upset.

Insurance carriers have shifted severe risk damage to policyholders through higher deductibles on claims from hurricanes, wind, and hail. Because a home may be insured for $200,000 and the policy has a 3 percent deductible for hurricanes, the policyholder would pay $6,000 out-of-pocket on a storm-related claim.

Insurers are also using their contract language to avoid paying claims. If there was a hailstorm that destroys your home or a flood covers half the house, the insurer would not cover and pay for the specific damage unless you pay the additional $40 to $50 a year for a specific endorsement that covers it.

With all these changes in insurer’s policies, the premiums have also increased by 5 to 10 percent annually, which depends on the region. What is even more bad news is that industry sources say insurance rates will hike up to 12 percent this year.

In addition, policy holders are unaware of things not covered until they file a claim. The average homeowner files a claim only once every 6 years, and many policyholders don’t read the disclosures, renewal contracts, and updates that insurers send them.

If you need help looking over your coverage and have questions, the agents at Alandale Insurance can help you. They can answer all your questions, look over your current policy, and get you the correct coverage for your home. Call Alandale Insurance at (888) 854-4501.

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