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  1. #1

    • insufferable know-it-all
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    Just what DOES Homeowner's insurance cover?

    I'm dead curious. Every time something happens to damage homes, I keep hearing that it's not covered by homeowner's insurance. It doesn't cover earthquakes, it doesn't cover landslide or mudslide, what does it cover, and why on earth do we get it if it doesn't cover anything?

    IMO, it sounds like "homeowner's policy" is a deceptive title. They should just make it cover everything, price it accordingly, and spread the risk by having all homeowners have the same complete coverage. True, it would make the policies more expensive, but the real estate prices will adjust accordingly (same as they adjust to mortgage rates).

    Unusually and exceedingly peculiar and altogether quite impossible to describe...



  2. #2

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    i think you can get insurance to cover those things, but to afford it, the deductable would be way to high?!?!
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  3. #3

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    I think homeowners insurance is one of the biggest scams out there- a scam that is unavoidable, unfortunately The state of the industry is so unregulated that they are not required to cover anything. If you make a single claim, they are fully within their rights to drop your coverage completely. At the very least, your premiums can often skyrocket if you make a claim. Many people do not report damage because it is not worth the risk- and end up paying huge out of pocket deductibles on top of their premiums.

    There needs to be reform and big time- the huge profits being made by insurance companies need to translate into better coverage for their customers. Instead most consumers get no coverage at all, or their coverage changed without notice.
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  4. #4

    • șoș Tom șoș
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    Quote Originally Posted by Morrigoon
    I'm dead curious. Every time something happens to damage homes, I keep hearing that it's not covered by homeowner's insurance. It doesn't cover earthquakes, it doesn't cover landslide or mudslide, what does it cover, and why on earth do we get it if it doesn't cover anything?

    IMO, it sounds like "homeowner's policy" is a deceptive title. They should just make it cover everything, price it accordingly, and spread the risk by having all homeowners have the same complete coverage. True, it would make the policies more expensive, but the real estate prices will adjust accordingly (same as they adjust to mortgage rates).
    Homeowner's insurance covers things that can be somewhat controlled. Per example theft and fire for the most part. In regards to natural events- its tough to ask a company to insure a home built on a hillside such that if it slides or is knocked over by an earthquake it can be completly recovered.

    I didn't understand this for a long time when I started in this field (mortgages) but frankly if someone chooses a great view on hillside- they run the risk moving in there. Well somebody else built my house, shouldn't they be resonsible? Frankly...yes and no. The builder consults with engineers and surveyers who make the decession which ultimatly effect how and where the house is built such that it should withstand "normal" natural events.

    It goes the same with moving in to a bad neighborhood- you can't honestly complain about theft of your plasma screen tv if you move into an area known for crime and drugs.

    Now it also has a duel purpose protecting you and the person that lends you money in the event that you should default on your home and fall in the foreclosure. This is perhaps the biggest and most important reason for homeowner's insurance.







  5. #5

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    I've heard cases where insurance companies drop people for even ASKING if their policy covers mold... not making a claim, mind you, but merely inquiring into their coverage!

    Unusually and exceedingly peculiar and altogether quite impossible to describe...



  6. #6

    • șoș Tom șoș
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    Quote Originally Posted by Morrigoon
    I've heard cases where insurance companies drop people for even ASKING if their policy covers mold... not making a claim, mind you, but merely inquiring into their coverage!
    Home Owner's Insurance is NOT very profitable. Despite what we may think as consumers who are pissed off by it. Most of these companies are in it to get you involved in other policies (cars, life policy, medical, etc) or because they have limited involvement in some other capacity in real estate transactions.

    Because of the cost of homes and and materials these companies are deserning and very tenuous about claims. The fires in San Diego two years ago caused massive waves in the industry because technically most if not all of those homes had full coverage but shelling out the checks all at once for all 100 of those homes would have put a few carriers out of business. Hence the government steps in and backs up these companies...







  7. #7

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    Quote Originally Posted by dramaqueen
    The state of the industry is so unregulated that they are not required to cover anything. If you make a single claim, they are fully within their rights to drop your coverage completely. At the very least, your premiums can often skyrocket if you make a claim. Many people do not report damage because it is not worth the risk- and end up paying huge out of pocket deductibles on top of their premiums.

    There needs to be reform and big time- the huge profits being made by insurance companies need to translate into better coverage for their customers. Instead most consumers get no coverage at all, or their coverage changed without notice.
    Reminds me of some insurance comanies who just left Florida or remained and raised their premiums... even if you didn't get hit by all 3.. (I feel sorry for Polk county..)

    Those who left brought in new people.... those who left was just cause they couldn't get a profit in FLA but get a profit in every other state...

  8. #8

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    I don't object to their rights to make a profit... just price the policies according to the concept of actually covering what people THINK it covers. True that would be expensive, but the market would adjust. I think that's better than cheaper insurance that doesn't turn out to cover anything. And perhaps they should refuse to cover some areas, and perhaps this should be taken into consideration by builders.

    Unusually and exceedingly peculiar and altogether quite impossible to describe...



  9. #9

    • șoș Tom șoș
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    Quote Originally Posted by Morrigoon
    I don't object to their rights to make a profit... just price the policies according to the concept of actually covering what people THINK it covers. True that would be expensive, but the market would adjust. I think that's better than cheaper insurance that doesn't turn out to cover anything. And perhaps they should refuse to cover some areas, and perhaps this should be taken into consideration by builders.
    awwwwwwwwww Morrigoon- there is the rub- the average consumer does not THINK about it until it is over. I look at policies everyday and most consumers have basic fire and theft at a cost of say about 100 bucks a month. Add a policy to cover earthquake, tornado and hurricane and expect that to triple- nearly 1/5 to 1/8 the cost of the average mortgage payment, which most homeowners can barely afford as is!

    Smart selective homeowners choose homes based on those factors: Am I likely to get hit by a natural disaster? fire? theft? earthquake? tornado? storms? hurricanes? And thats not to say you can't live in places like the belt way or places like Florida or California- but you don't choose dangerous homes that are a glutten for nature's punishment!







  10. #10

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    I'm saying make full coverage mandatory and wrap it all up in the payment (PITI, and all that rot), and that way people will HAVE to take it into account.

    Unusually and exceedingly peculiar and altogether quite impossible to describe...



  11. #11

    • șoș Tom șoș
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    Quote Originally Posted by Morrigoon
    I'm saying make full coverage mandatory and wrap it all up in the payment (PITI, and all that rot), and that way people will HAVE to take it into account.
    When 10% of consumers who currently own homes can't afford homes because of mandatory full coverage and they are evicted and are forced to move 5 people families into tiny 2 bedroom apartments---then that will work....and when 5 years later no one can get a loan for a new home because insurance carriers can't take new risks and lenders aren't giving out money, then it will work...its a fine balance my friend---it is on the consumer to find the right house, at the right price, in the right location...

    Do I feel bad for fire victims? The landslide victims? Hurricane victims? Yes. However builders disclose potiential risks to consumers...the builders or the city is libel if and when these facts are not disclosed.







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