Nobody wants to be fired by their home insurer.
We all know the size of the claims you make and the frequency with which you make them can be major deciding factors in whether or not an insurance company will renew your policy.
But did you know there are other lesser-known reasons why your insurer may want to give you the boot?
Your C.L.U.E. Report Stinks
Insurers compile something on you known as a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report.
This little-known report contains a seven-year snapshot of info about you, including a list of any claims you’ve made.
Some insurance companies, when you call up and ask questions, will log it on your C.L.U.E. report. This is a tactic that makes other insurers not want to insure you.
The good news is that you can order your free C.L.U.E. report once a year just like you can with your credit report. If something turns up false, you can challenge it through a dispute process.
You’re Trying to Insure a Home-Based Business
There are about 8 million business owners who operate their companies from their homes in the U.S., according to Susan Schreter, expert on startup sustainability and founder of Start on Purpose.
But home business owners are often surprised to learn that most standard homeowner’s insurance policies don’t offer the same level of insurance coverage they need. That can strain the insurer/client relationship and lead to ill feelings that could result in a policy nonrenewal.
For more on the ins and outs of insuring your home-based business, see Susan’s article Insuring a Home-Based Business: What You Need to Know on Clark.com.
You Have a Blacklisted Dog Breed
There are 11 breeds of dogs that are off-limits to most home insurers.
Maybe that’s because insurers forked over $675 million in liability claims related to dog bites in 2018, according to the Insurance Information Institute.
Your Deductible Is Too Low
When it comes to homeowners insurance, we’ve come a long way from the $500 deductible of yesteryear!
You should raise your deductible to either $1,000 or $2,500, regardless of whether you’re in a house, a townhouse, a co-op or a condo. Some mortgage lenders may have a cap on how high you can set your deductible. Check with yours about any limitations.
By doing this, you’ll pay less in premiums, but more importantly, you’ll reduce the risk of making a claim. That in turn lowers the likelihood that your insurer will cancel your coverage because you made too many claims.
Today, homeowners insurance can be used only in the case of a catastrophic loss. It’s a ‘use it and lose it’ proposition.
You Rent Out Your Home on a Home-Sharing Site
Renting out your home for extra cash could leave you in a lot of financial hot water with your insurer.
Money expert Clark Howard has talked in the past about sites like VRBO.com, HomeAway.com and Airbnb.com as a way to get a deal if you’re looking for a rental. Meanwhile, it’s also a way to supplement your income when you’re the owner of the property.
But what happens if your place is damaged? He once took a call from somebody with $50,000 of damage from their renters. The question becomes, who’s liable?
The owner’s insurance disclaimed responsibility because it was not an authorized use of the property and was not allowed under the homeowner’s policy. Ditto if someone gets hurt on your property when you’re renting it out on sites like VRBO, HomeAway and Airbnb.
The insurance industry has not caught up with the realities of the sharing economy. Here’s hoping it soon does!