What should I know about mold and home owners insurance?
Insurers are dropping homeowners and raising rates. During the early ’90s, average premiums were flat at about $420/yr, and then rose at the rate of inflation. That changed in 2001 when rates shot up and insurers began scrutinizing credit ratings and houses’ histories. Poor credit or unresolved mold problems may adversely affect your coverage or premiums.
In this new environment you need to:
- Shop Harder – You probably can find a company willing to offer you a policy including mold coverage or a mold rider, but you may have to scout more, and don’t forego comparison shopping.
- Check Prior Claims – Before you buy a new house, ask the sellers for a copy of their Comprehensive Loss Underwriting Exchange (CLUE) report from ChoicePoint. Or call 866-527-2600 and ask, or try http://www.choicetrust.com .
- Check Your Credit – Insurers find that people who pay their bills on time take better care of their homes and file fewer claims. Get your credit score at http://www.myfico.com .
- Raise Your Deductible – Doubling your deductible from $250 to $500 reduces your premium by 15% (typical example), while a $1,000 deductible may save 35%. A high deductible also insures that coverage renewal will not be denied because of multiple small claims.
- Don’t Leap and Lapse – Never let your policy lapse before getting a new one. A new insurer can deny coverage for up to 59 days, so don’t cancel your old policy until then.