Home Insurance Articles
How Home Insurance Quotes Have Been Affected By The Fiscal Crisis
2010-08-08
Cheap home insurance quotes are becoming harder to find, and the fiscal crisis is at least to blame for some of that problem. The growing number of home foreclosures is forcing the insurance industry to shift some of its financial burden to good customers. A foreclosure means that a policy holder is no longer making mortgage payments. That cuts off a source of income for the insurer, which finds it necessary to raise premiums to compensate for some of the loss.
Most insurance companies are attracting customers by quoting the cheapest rates possible. Renewal customers, on the other hand, get higher rates because the companies understand that most people never check to see if their homeowners insurance premiums are competitive. Cheap homeowners insurance may be just that. Insurance coverage shouldn't be based on the property's price, but what it will take to completely rebuild if necessary. Make sure your insurance company has a valid reason for the amount of coverage its costs provide. Housing prices are dropping in all parts of the country. Rebuilding based on those reduced prices puts a lot of policy holders without sufficient coverage to replace or substantially repair a home.
Since the onset of the fiscal crisis, home insurance quotes have risen because of an increase in the number of claims filed by homeowners. Burglaries top the list of claims, and there have been a suspicious number of home fires in particularly hard-hit areas by the worsening economy. There have also been cases where foreclosed homes have been stripped of appliances, wiring and other items.
Another situation created by the fiscal crisis is the loss of income for policy holders, who then find their credit rating falling. Since insurance is based on the principle of implied risk, those lower credit ratings force the insurer to base homeowners' coverage on the client's ability to pay, and that is seldom to the benefit of the customer.
Despite the economic malaise, houses are still being sold and customers are paying for homeowners insurance. Clients, looking to save money where possible, want to find good home insurance coverage at a reasonable price. A large number of people are paying more than they should for home and car insurance, and don't realize it. It's smart to periodically examine your insurance policies to determine if there's room for improvement. Take advantage of any discount offered by an insurer, and let your current policy issuer know that you are interested in lowering premium costs---even if that means changing companies. Also, look into packaging your homeowners insurance with other insurance needs. That could save a tidy sum.