Finding the right home to buy is an arduous task. Even if you do everything right, you can run into snafus regarding insuring your new investment. Homeowners have experienced issues with their homeowner’s insurance policies due to their or the previous owner’s past claims.
Before we get into how claims can affect your home purchase, you probably need to know a little bit about how the insurance works. Each state may have its own rules on how insurance companies handle renewals and payout claims. The insurance company looks at past claim history to see what potential you have of filing a claim. Claims cost them money and can thus increase the amount of premium you pay out of pocket. Before filing real estate insurance claims Austin TX, think twice about whether or not you need to. Replacing a TV set stolen may be better out of your pocket rather than seeing your insurance rates go up.
The insurance company looks at actual claims and call-ins without a claim filed as equal. If the prior owner filed a claim for a small fire in the kitchen, that is one claim. However, if they also called to see if it was worth filing a claim for a stolen TV set, that may also be seen as a claim. That’s two claims in less than three years and the insurance company may not want to insure your home even though you did not file the claims.
The insurance company looks at your own claims history when deciding whether or not to insure you. If you’ve never owned a home, they will look at your renter’s insurance claims. They may even look at your credit history and auto insurance claims to see how risky an investment you are for them. Fewer claims on your insurance policies can mean lower premiums for you which can make that home purchase more affordable.