For some reason, I am having a very difficult time getting my newly purchased home insured. I would like some advice about whether the trouble I’m having is due to really rotten luck, hard times for insurance companies, choosing some unusually picky companies, or something else. I understand that some insurance companies are still hurting financially from September 11th - but the way they’ve treated me makes me feel wish I could give them a bit more hurtin’.
When I first bought the house, I contacted Allstate for coverage since I have my cars insured with them. Before I could even move in, though, they sent me a letter saying they were dropping the coverage because (1) there were some tree limbs touching the roof of the house, and (2) I was taking too long to move in. They did not give me any opportunity to correct these; they just announced they were terminating my coverage.
So, I head over to the nearest State Farm agent, after getting those things corrected. I explain the situation to him. The agent personally came out and had a look at the house, and said he didn’t see anything that would cause them to refuse to insure it. So I pay them for a year’s coverage and figure the problem is solved.
Well, it takes them a long time to get back to me with an actual statement of policy. I finally called them today, and asked what the delay is. The people at State Farm said that they will have to cancel my coverage in mid-December, apparently due to some damage to the wooden siding. They were a bit vague as I was only able to get a voice mail, but apparently the problems have nothing to do with the reasons Allstate wouldn’t insure the house. The exterior does have some wear and tear, but it’s hardly in need of anything major.
Is this normal to have two insurance companies drop you once you’ve bought a house? What gives here, and how can I find a company willing to insure my house? Since not all houses are sold in perfect condition, surely there must be some way to insure a house that needs a little TLC.
I get the impression from your description that the house is something of a fixer upper which may be why companies are reluctant to insure your house. Possibly they feel the risk in insuring it would be more than they want to bear if there are too many potential structural or other “gotcha’s” in the house.
Make all the necessary repairs and improvements then get the house re-appraised and insurance will likely be easier to get.
How is your credit? I recently read an article in my local paper about the fact that many people are having a difficult time getting their houses insured these days. One of the reasons is that insurance companies now use credit scoring to determine who they want to insure. In my state, an insurance company can’t use credit scoring as the only reason to refuse you…but I wonder if a low credit score could send an insurance company looking for a reason to refuse you (like, say, old siding or tree limbs.)
Prior claims (at your old residence) are another big reason for refusal. If you’ve had any in the past five years, you’re going to have an uphill battle.
I did learn that if you can’t secure your own insurance, the state of Minnesota has its own insurance plan. It’s not a very favorable plan, apparently, but it is there as a last resort. I would guess that the state of Georgia has something similar if you can’t find any insurance at all.
I second GaryM, talk with an Independent Agent. And for point of fact, when an insurance company cancels your policy they are required it issue a written statement explaining when and why the policy will be cancelled. It does not sound like you received proper notice of cancelation. I suggest a call to the Georgia Department of Insurance.
Don’t forget if they, they owe you the “unused” portion of your premium back.
They will insist that they’re investment is protected. They will in fact insure the house through one of the companies they deal with, usually at 200% or more than what you can find on your own, if you don’t show them proof of insurance.
Go to an independant agent. At our agency, we have several companies that will insure a less than perfect home as long as there are not many liability hazards. (dogs breeds with a history of biting, trampolines, broken hand railings etc.)
Thanks to everyone. I will first talk to Allstate and see if they are willing to reconsider, since (1) I have my auto insurance through them, (2) I have corrected everything they complained about, and (3) my parents have bought insurance through them for 20 years and are still current customers. If they aren’t willing to reconsider, I’ll talk to an independant agent; that sounds like a safer bet. I kinda suspected that insurance obtained through a mortgage company would be at loan-shark prices.
To answer the other questions:
My credit score is pretty good - when I checked it prior to financing the house, my FICO score was above 700. However, there is one other thing that may make them jumpy - not too many young (mid 20’s) single men own houses. No prior claims as I’ve never owned a house before.
Oxford is not near the coast; it’s about 20 miles east of Atlanta. The only hurricane that’s been through the area in 20 years was Opal, which had pretty much spent all its strength by the time it got this far inland.
The house does need a few weekends of cosmetic work, but I haven’t seen any signs of water damage, a leaking roof, or other structural problems. It’s about 20 years old.
Allstate did provide proper notice of cancellation, even though the reasons were somewhat arbitrary. Their contract did specify that they could cancel it for any arbitrary reason with proper notice during the first 60 days I owned the house. I have not yet received the notice from State Farm - I found out during a telephone call; evidently it is in the mail but should arrive in a day or so.
And you can bet I’ll be going for the unused premium.
Thanks to everyone; you’ve given me a bit of encouragement as well as lots of useful advice.