Sunday, November 23, 2014
Homeowners are highly encouraged to insure their property. Much like shopping around for a mortgage, a homeowners insurance involves an application process, whereby an applicant is accepted based on credit history as well as several important factors. Insurance agencies are essentially a business: they need to profit from their clients’ premiums to stay in the business and fund their services. Take a look at what insurance agents and agencies consider when looking at an applicant’s credibility:
Credit history. Insurance agencies look at your credit history to determine whether you’re capable of maintaining the fees. Poor credit is considered a high risk to the insurer. As such, homeowners with low credit scores are often denied insurance or offered only limited coverage.
Location. Your home’s location is important. Insurers are much less likely to provide coverage for homes at high risk of damage from environmental phenomena such as storms, flooding, mudslides and earthquakes. High crime rate is also a risk that insurers would rather not account for.
Construction. The quality and condition of your home play a part in the type of coverage insurers will be willing to give you. Homes built with materials that can withstand damage from the elements are much more likely to receive good coverage. The quality and the age of plumbing and electrical systems are also taken note of.
Use of property. Insurers take into account how the homeowner intends to use the property. Coverage may be denied or limited concerning certain activities carried out within the premises, especially those that put the residents and the property at risk.