Home Owners Insurance
Homeowners insurance originally began when the Insurance companies realized a need to protect the second largest asset of their clients from a large catastrophic loss; that would be if their homes were to burn down. It started out as just a Fire policy and gradually evolved into an all-inclusive policy where the home would be covered from other type losses such as wind, hail; lightening, weight of snow and ice, vandalism, burglary, water breakage and water sewer backup.
As the insurance industry became more and more competitive the insurance companies started to offer additional coverage’s like personal property, loss of use, separate structures, personal liability, guest medical and many more coverage’s that also include floater’s. This all came about as companies entered the insurance industry to do business. They would offer additional coverage’s that the other companies didn’t offer at that time in order to give the newer company a competitive edge and soon after the other companies followed along with them .
The insurance companies have tremendous policies that will cover insured’s for almost anything that they own but the insurance companies do not want the insured's to file small claims as this will cause them to be unprofitable. The insurance companies are just like any other business. They have to be profitable in order to stay in business to take care of YOU; the Client.
Due to maintaining a profitable position in the market place, the insurance companies evaluate their book of existing business annually and project future rate increases based on that information. This will ensure that the companies are able to stay in business to take care of their clients, return investment objectives to their shareholders and give the client the most cost effective product that their company is able to provide.
As you can see; insurance is a very complex and volatile business. For these reasons rates are continually changing; and we still haven’t discussed how the increasing cost of repairs, labor and fraud have impacted rates.
Note: A good rule of thumb for filing claims is that if it is not more than 3 to 5 times the deductible; it would be in your best interest not to file the claim. The insurance companies will raise your rates to a point where you will pay more but not be able to go to another company.
Most insurance companies do not want to see more than 2 claims in a 5 year period. This would represent excessive claims filing and cause you to lose your coverage. Once a company cancels your coverage most other companies will not insure your home either. If you are lucky enough to find one that will insure it, you will pay a very high premium until your claims are over 5 years old.