Home Insurance Quotes FAQ

 Q: Do I have to purchase earthquake or flood insurance?

A: These losses are specifically excluded in all policies. So if you live in an earthquake or flood prone area, your mortgage lender will require you to buy separate insurance covering your particular risk – especially if such a catastrophe has happened previously in your area. If either is a distinct possibility where you live, you will probably want to buy this insurance coverage even if it isn’t required, however these are expensive coverages.

The National Flood Insurance Program (NFIP) offers flood insurance in many areas. Local insurance agents also sell NFIP flood policies, and they can describe the program in your area. The Federal Emergency Management Agency provides information on its website. Earthquake insurance is offered by state agencies in earthquake-prone areas. However, check to see if your current insurer will provide this coverage as it will probably be less expensive.

Depending upon where you live, hurricane, windstorm or damage caused by hail may be excluded from a standard policy also. A homeowner may have to purchase special coverage for these risks.  It is therefore very important to carefully review the details of your policy.

 Q: What factors will increase my homeowners rates?

A: The short answer—is claims. If you make too many claims, even small ones, your rates will go up. How many claims is too many claims? That really depends upon the insurer, but more than two claims in four years is probably a red flag to an insurer. If the claim results from some deficiency you could have taken care of then your rates will surely go up.

Large claims. Of course if your claim is large—your house burned down, for example—the effect on your rate may depend upon how the event happened. If the misfortune is your fault, or even partially your fault, your rates will surely increase. As a matter of fact, your policy may be cancelled.

Catastrophic claims. Of course huge, widespread claims increase homeowners’ rates in kind across the region. When an insurance company gets hit with many large claims, it has to replenish the capital reserves it used to paid out those claims, and then build more reserves to pay future claims. Therefore, after a catastrophe, such as a hurricane, homeowners rates will climb in the areas hit.