Do you read & understand your home insurance Policy?

MURPHY’S LAW

Property home insurance premiums have risen dramatically over these last years. Ever wonder

why? Well, it doesn’t take Miss Marpole to crack the mystery here. CBC Marketplace reported that, “a couple of years ago, insurance companies were so competitive and their rates so low, they barely covered costs but their investments in the stock market allowed them to make money. Then the market crashed and September 11 led to a $60 billion loss. The solution was to raise rates and tighten up their underwriting. That meant cherry picking customers to reduce a company’s exposure to risk.” It has obviously become evident that since 9/11, home insurance companies are reluctant to take on risks that might have seemed insignificant in the past. Underground oil tanks, knob and tube wiring, marijuana grow-ops and mould were not on the

insurance companies’ radar in years gone by but they certainly are now. Homes that have these

concerns run the risk of not being able to obtain insurance, higher premiums or having their

insurance rendered void. It is not only homes that fail to meet the scrutiny of insurance companies but consumers personally can fail the suitability test. If a homeowner makes several claims, the insurance company may well choose not to renew their coverage as they might

ascertain that they are a poor insurance risk. What many consumers are not aware of is what is

NOT covered in their policies. “Exclusions” can lead to heartbreak yet it would appear that many people are happy to live in ignorance. According to a Harris Interactive Survey, “homeowners are largely unaware about the scope of the insurance policies that cover their homes.” It is easy to see how most people take for granted that they are covered “no matter what” but this is simply not true. Take for example, the everyday scenario where a Seller moves out of their home

some time before the new owner moves in. This period where the home is empty may not be

covered by an insurance policy. When a seller moves out of the house it is assumed that they

have no intent in returning and thus, most policies will not cover vandalism or malicious acts during the time the home is vacant. Similarly, if a home is left “unsupervised” for an extended period of time while you are away enjoying your African Safari, many property insurers consider it “empty” as well. It may well be that if your water pipe breaks and floods your basement during this time, you will be on the hook yourself for the clean up and repair.

Edward A. Murphy was an engineer born in 1917. He observed that if anything can go wrong it will.

Ignorance is not bliss. Check your policy today.