Home Guru
Nobody likes getting dumped. Whether we are dismissed from a romantic relationship, a job or political office, it can be painful.
But I assure you, few experiences compare with receiving a non-renewal notice for a home insurance policy and having difficulty finding another company to insure you. It happened to me, through no fault of my own, and it could happen to you, too.
After many years of being a loyal customer and paying my premiums on time, my home insurer sent me a notice after I had filed two claims, both catastrophic experiences. One was from Tropical Storm Irene, the other from Superstorm Sandy, each of which damaged my property, toppling many trees. All of my fencing was destroyed in one event, all of my pool equipment gone in the other.
The real rub came when my agent was unable to get any of the other companies her agency represents to insure me–not even at a much higher rate. There was one company that considered taking me on as a “high risk” client, but only at an outrageously overpriced premium, which would have increased my annual payment from $2,900 to $7,000.
In desperation, I was ready to accept this brand of extortion. But the insurer Googled my house and found that it was on the market for sale. Sorry, I was told, insurers won’t issue a policy for a home that is listed for sale. It seems that there is the fear among insurers that the home may be left vacant.
What is a homeowner to do in such circumstances?
First I tried to wrestle with my rage by seeking justice. I was prepared to complain to the state Department of Financial Services, the regulatory agency that oversees all insurance business in New York. I also planned to complain to my state and county legislators. How could this great injustice go unchecked? How could this insurance company who denies insurance after a major catastrophic event not be censured?
When I calmed down and did my online research, I found that an insurance company can refuse to renew a policy at any time following a certain guarantee period, usually three years.
Seeking another insurer, I immediately removed my house from the market and sought help from other insurance agencies. When I called a new recommended agent, he responded to my tale of woe about insurers by saying, “Those bastards!” and guaranteed that he’d help me out. After almost a week, he called me back to say that he couldn’t help me after all. None of his companies would issue a policy because I was listed as “high risk.” Listed where?
I went back to the office manager of my original agency, Lynn Hillman of Eifert, French & Ketchum, who had always been very helpful to me. I felt inclined to blame the agency and asked why I wasn’t told that filing a second claim might jeopardize my policy. I would have eaten the expense of the second claim, no matter how great, had I known.
“This is the first time I recall this insurance company refusing to renew after a catastrophic event,” she said, promising to do what she could. In a subsequent meeting, Hillman told me that insurance companies can refuse to renew a policy for any reasons, but basically it boils down to filing too many claims in a certain period of time, plain and simple, and the guidelines for individual insurers keep changing.
“First, it’s one company that has the best products and rates, then it’s another,” Hillman said. “It’s important to keep up with these changes and to move your client’s policies around accordingly.”
The really challenging part, Hillman said, is that this information is placed on a reference list called the Comprehensive Loss Underwriting Experience (CLUE), which all insurers consult before issuing a policy. Great, I thought, it’s like being blacklisted in the days of McCarthyism.
After my first lesson learned–to consider whether it pays to file a second claim in a short period of time–Hillman taught me another. When she called me within a week, I was jubilant to hear that she had found a carrier that would insure my home at a reasonable price. What she did was to ask the company that already had my auto insurance to take on my home as well.
“It’s called being a multiple-line client, or bundling of policies, which has its advantages,” she said. “First, an insurer is more favorably disposed to those clients with whom they have more than one policy and, second, credits can accrue on both policies, which provide reasonable premiums for both.”
Whew! Now fully insured, I’m a little wiser thanks to a savvy and creative agent who served as a real advocate for me.
If anyone else is having insurance challenges, I suggest calling Lynn Hillman of Eifert, French & Ketchum at 914-250-2500.
Bill Primavera is a residential and commercial Realtor® associated with Coldwell Banker, as well as a publicist and journalist writing regularly as The Home Guru. For questions about home maintenance or to buy or sell a home, he can be emailed at Bill@PrimaveraRealEstate.com or called directly at 914-522-2076.
