Home Owbers Hazard Insurance

Home Owners Hazard Insurance
How the Industry Sets Your Premium Rate

The industry uses a program named “CLUE” (comprehensive loss underwriting exchange) to track claims by owner and by property. All companies share the data base. You may be impacted when renewing or obtaining a new policy by your personal past claims experience or by the claims history of the property you are acquiring.

In general, the industry cannot use information to target areas or neighborhoods for rate hikes or coverage decline. However, your personal experience or the experience of a house you are buying can impact your rate. One company as example looks for a personal claim in the past 6 years or a claim on the property during the past 6 years. Any fire or theft claim on the property results in a less than preferred rate.

Insurance companies also rely on insurance credit scores. These are similar to your financial credit score but based partially on other data. Higher scores result in lower rates. Currently there is a heated debate about including inquiries (many of which do not result in a claim) into calculating the credit score. Simply by making an inquiry about a potential claim you may trigger a change in your rating.

If you are experiencing higher than normal rates ($1,000 or more annual premium) or being declined for coverage there are several options to pursue. Give me a call to discuss some strategies to lower your premium and/or obtain current bids from other companies.