Tag: "Losses"
What is the Best Home Insurance for Tier 1?
Living by the ocean certainly has it’s advantages and disadvantages. The beauty of ocean living however can quickly turn to a nightmare in the face of an oncoming hurricane. For this reason alone purchasing home insurance in itself can be a bit of a bad dream on it’s own.
Because insurers typically don’t like the potential for multiple losses at the same time they usually shy away from those types of risks. However, this is usually regulated by each carrier on what and where they will write home insurance. This of course doesn’t mean that they will cover “all risks” as they can and do usually exclude wind and flood.
Thankfully however, FEMA and a few others do sell both wind and/or flood coverage that can be independent from the personal home insurance carrier. Of course the premiums for insurance on homes in tier 1 areas will cost more due to the greater risk of loss, however, for many the luxury of beach living is worth the premium paid.
It is always best to start your insurance shopping by talking with your existing home insurance agent or insurance carrier to see what they offer and then requesting quotes from FEMA and other local agents in that area. Local agents will be familiar with the risks but it is still best to talk to a few local agents.
So if you’re planning to purchase a home or vacation home in these wind challenged areas that are at risk for hurricanes and/or flood, you may want to check into the insurability before purchasing. By considering the insurance costs for homes in tier 1 areas the buyer will be better equipped to budget the expenses of their dream home.
What are “Loss Runs”?
Every insurance carrier guards their bottom line by attempting to insure only the best risks by understanding the exposure in detail. When a prospect applies for insurance the obvious reasoning is that there is some sort of risk of loss that the prospect doesn’t want to be on the hook for. Therefore, the insurance carrier assumes risk for their insureds in turn for premium. By doing this they share the cost of risk over many.
For this reason “Loss Runs” are tracked. In essence “Loss Runs” is an insured’s insurance history at a glance. This report talks about past losses as well as open case losses. This report will state the time and the carrier along with other pertinent information. By having loss runs available an insurance company can then analyze the chance of risk with the prospective client.
Typically prospective insurance carriers will require anywhere from three to five years of Loss Runs before deciding to issue a proposal for business. Because all insurance carriers require loss runs all insurance carriers will provide loss runs as an industry standard of practice. Obviously the least amount of losses the better the insurance rates and the greater the amount of losses the higher the rates.
What this means for individuals and/or businesses alike is that it is always best to avoid or reduce risk as much as possible as a means of keeping insurance costs down. This is a direct strategy that has a direct impact on your bottom line.
