Have you ever wondered why your home insurance company does things a certain way? Or why the cost can change so dramatically?
After helping hundreds of homeowners over the years with their insurance, we’ve learned a few things about how the companies operate. The GREAT news for you is that we can help you find out what those secrets are. The BETTER news is that we can show you how we learned it!
So without further adieu, let’s get to the FIVE things your insurance company doesn’t want you to know.
1. If you call the 1-800 number to ask a question about a potential claim, they can record this as a claim on your record.
It seems so simple. You call in to get a question answered on your home insurance. They give you a great answer. But they don’t tell you that it now shows up as a claim on your record!
So why do you even care? Because it can have two huge effects on your premiums. Many companies will hold that claim against you if you try to change carriers. Or the one you’re currently working with will potentially surcharge your account. Both of those can leave you paying hundreds, if not thousands, of dollars extra until it rolls off of your claim report three to five years later. Don’t get left holding an empty wallet over a simple question!
2. If your roof is over 15 years old, your policy will likely shift to actual cash value rather than replacement cost.
For most homeowners in North Texas, the reality is that you’re going to be hit by hail. Period. Full. Stop. If you live in the 121 Corridor, you're likely saying please not again.
As homes age, the likelihood of a roof claim goes up. The companies know and understand this. So now, many are building it into their policies that they will not do a full replacement if your roof is over 15 or 20 years old. Instead, they will reimburse you a depreciated amount based on your roof’s age. That means you eventually get paid next to nothing for your roof when the hail comes a knocking. You want to make sure you understand this when you sign on the dotted line. Especially if the roof has been up there a while.
3. If the sewer line between your foundation and the sewer main in the street backs up into your house, you will not be covered for clean up without an endorsement.
Sewers are gross. Sewer lines overflowing in your bathroom are grosser. Texas homeowners have trees in their yards that grow roots. Those roots have impacted countless sewer lines causing them to backup into your home. If you don’t have an endorsement on your policy to help remediate the situation, you’ve literally got a stinky mess on your hands. Let Insurance For Texans show you how to avoid this sour experience with a simple add-on to your home insurance policy.
4. Small claims can mean you’re married to your current company for the next three to five years.
Yeah, you got that window replaced when the lawn mower took it out last week. You definitely got your money’s worth on the $300 claim payout. BUT! One thing that most folks don’t realize is that the claim goes on to a report known as a CLUE report. It’s a central database with claim information that all of the companies use to keep track of you. So now, when you get a rate increase, they know that you had a claim eighteen months ago. Some of the companies will block you from access to their policies until that claim, or claims, is at least three years behind you. And some even look back five years! So in reality, you’re stuck together. Was the $300 worth it? Eh, maybe.
5. Your credit makes a difference on the price.
No one likes to say it out loud, but a solid credit score can save you loads of dollars. Insurance for Texans has run thousands of home insurance quotes all over Dallas, Tarrant, Denton, and Collin counties over the years. We’ve seen quotes on the same property vary wildly depending upon what an individual’s credit score is at the time of application. In the end, the insurance companies have seen that folks who don’t tend to pay their bill tend to not pay their bill and have more claims. Therefore they end up paying more for the same coverage. Don’t let this bite you in the pocket book.
You get it. You know what to watch out for now. But what do I do next? Here’s a handy checklist to help you navigate the potentially tricky waters of home insurance in Texas.
- Work with an agent who can help answer your questions so that you don’t have to worry about that question showing up as a claim.
- Work with an agent who functions as a broker and has access to many different carriers. This can lead to options to help you negotiate the process of side-stepping these issues.
- Create a savings account to cover small potential claims rather than relying on your insurance coverage.
- Simply stay on top of your bills. It will help you save money not only on insurance, but in other purchases as well.