Avoid Homeowner Insurance Cancellation

While traipsing through the mtgprofessor.com website the other day, I ran across some interesting information from real estate columnist Robert Bruss. He pointed out that home insurance today isn't your father's home insurance. Things have changed, and many people are finding that their insurance company has chosen not to renew their policy.

Bruss offered this advice: "Before filing claims, homeowners should consider if they risk non-renewal for filing too many recent claims. To minimize the risk of non-renewal, homeowners should (1) raise their deductible from $250 to $500, $1,000 or $2,000, which will also reduce your premiums, and (2) avoid filing small claims just barely above the deductible amount. Additional methods to lower homeowner insurance costs and avoid risk of policy cancellation include (1) lowering the liability coverage and obtaining an umbrella policy, (2) selecting depreciated personal property replacement cost, and (3) consulting at least three local homeowner's insurance agents to compare their policy coverage and costs."

Many insurers today are keeping tabs on how much you cost them. While you may still pay them more than they've paid you, you may be deemed to be just not worth the hassle. You can avoid this scenario to some degree by hiking your deductible, which has the extra benefit of lowering your premiums. So, for example, if your deductible is now $1,000 and you suffer $400 in damages, you will not file a claim, when before, with a $250 deductible, you might have.

Here's another tip -- let's say you're just thinking about filing a claim. If you call your insurance company to ask some questions, be sure to make it clear that you are not calling to make a claim, but just to inquire. Your call may end up counting as a claim that didn't go anywhere, but a claim nonetheless.