insurance

When I shop for a home insurance I am always asked if my home is currently insured or if there are lapses in my insurance policy. Some companies outright refuse to give me a quote when I tell them that I haven’t had home insurance in the last 3-4 months. I am wondering why this is important for them?! They just referred to their company policy and did not give me any meaningful reasoning. Who's the best company for home insurance? Thank you for your answer.

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Here you can get quotes from different home insurance companies in your area, its the best way to find an affordable home insurance with a reliable company.

Insurance companies are wary of lapses in any kind of insurance policies. In your case it just happened to be home insurance.

The single most feared factor in the insurance business is not hurricanes, not bush-fires, not wars, not meteor strikes but what's known as 'moral hazard'. Moral hazard is, in simple terms, lack of inhibition in preferring a claim under less than above-the-board circumstances.

For example, if your camera is insured for home use only, you cannot make a claim if the insured camera suffers damage during a jungle safari. Most of us, being honest persons, would not even want to claim under such circs. However, since, as a rule it takes all kinds to make this world, there exist individuals who would make a claim as if the damage occurred at home. Such individuals are considered to be 'moral hazards'.

Coming back to your original question, insurance companies know from empirical evidence that the incidence of moral hazard is greater - much greater - in those cases where there's a break iin coverage. It's likely that the insured is trying to renew the policy after a loss has occurred.

You need to provide evidence to the insurance company that you did not intend to let the policy lapse. That it lapsed, is a fortuitous happenning (please note the wording - underwriters love such language) and not a deliberate omission. 'I do not want to be penalised for something over which I had no control' is the line you need to take. You could strike lucky with this line.

There is an increased potential for fraud.

For example:

If you have been uninsured for several months...your home may have sustained damage during that period and now that you know about the damage you are trying to get insurance so that you can wait a couple of months and then file a claim.

By requiring continuous coverage, you decrease this type of fraud.

Because if your lapse is greater than 30 days, there's a HUGE increase in risk, that a claim has already happened and you're trying to pass it off on them.

There's no one single "best" for homeowners insurance. If you've had a lapse that long, you're GOING to, at best, pay more for your homeowners coverage.

If you can't find a local agent willing to write you, you should check out Foremost Insurance. They write high risk houses - like people who've had a lapse in coverage more than 30 days, and low value homes. You'll pay a lot more for it, but at least they'll give you coverage. www.foremost.com, and they have an agent locator button in the middle of the page.

They do not want coverage lapses because your home MAY have suffered damages during such a lapse, and no insurer wants to get stuck paying for something which occurred prior to their coverage. In order to insure that nothing is wrong, they would need to do an inspection of the property for such reassurance, and they're not interested in hiring people to do such work.

If I were an insurance company, why should I bother to quote?? All you're going to do is make the initial payment of premium, and based on your record, you will let it lapse and probably take your business elsewhere.

It's also a judge of your character/credit