Home Insurance Articles
How Home Insurance Quotes Have Impacted The Real Estate Industry
2010-07-20
Home insurance quotes apparently have had an impact on the real estate industry. However, in today's economic climate, it looks as if the housing market and its attendant problems dictate most of the situations that create fluctuations for insurance costs.
There are some isolated cases where homeowners, themselves, can bring on increases in home insurance quotes. Suspected cases of arson involving properties facing foreclosure have been investigated in economically hard-hit areas. The costs involved in pursuing what happened and handling the subsequent claim can cause insurance premiums to rise.
Hurricanes, floods and other natural disasters often create huge financial problems for insurance companies, and the firms don't always respond in ways that benefit policy holders. After hurricane Andrew created massive damage claims, several insurers refused to renew homeowners' policies and even canceled thousands of existing contracts. Several insurers claimed bankruptcy and many others lost substantial reserve funds.
As it is with any industry, money that is paid out has to be recovered, somehow. For the insurance industry, that includes premium payments, investment profits or cutting back on expenses. Raising premium costs is the easiest, quickest way for insurance companies to recoup paid-out money. That, along with possibly fewer companies willing to issue homeowner policies, forces the real estate industry to work harder to help potential buyers.
Real estate agents find themselves having to help assure that a potential home buyer obtains adequate homeowners' insurance. They also should be able to advise on how soon an insurance policy goes into effect, and how large a policy is needed. If the homeowners' policy is obtained through an independent agent, the new home buyer must be informed that the actual insurance company involved has a time period during which it can reject the policy. Such a decision before closing would leave the home buyer without any insurance, and the deal will fall through.
Reliable real estate agents will encourage clients to have a potential new home inspected by a certified house inspector. Properties that get good marks from inspectors can qualify for lower premiums. New homebuyers also need to be told that homeowners insurance is as much a contingency as is qualifying for a home buying loan.
One issue involving flood insurance has caused an estimated 1,200 closings to be stalled each day. Mortgage lenders won't close loans on houses that need flood insurance until the federal program is revived. Without renewing the National Flood Insurance Program, Congress could leave the country with a monstrous financial problem. The legislative holdup is not because of the program, but comes with partisan conflicts over other tax and social spending items contained in the same bill.