4 claims that spike your home insurance premium

Now that the 2012 hurricane season is coming to an end, use this opportunity to shop your coverage.
Now that the 2012 hurricane season is coming to an end, use this opportunity to shop your coverage.

MYRTLE BEACH, SC (WMBF) - What would you say if someone told you you're wasting hundreds of dollars every year protecting your home from a disaster? More importantly what would you do? The company now insuring your home is hoping you won't do a thing.

Let's take a closer look at something most insurance companies don't want you to see: how they operate, and why the decision to drop you may have nothing to do with you or your home.

About the time the Northeast gets a handle on the recovery from Hurricane Sandy, you'll be getting your insurance renewal notice, and if history is any indication, your premium will go up.

In fact, half of us are already paying a lot more for homeowners coverage than we have to. And what's the reasoning for that? Your ideas about homeowners coverage are outdated.

We are now in the age of the billion dollar disasters like Hugo, Ike, and Katrina. But it was Hurricane Andrew back in 1992 that finally convinced insurers it was time for an overhaul.

Hundreds of thousands of homeowners were dropped. Insurance companies began refusing to even cover coastal areas like the Grand Stand. And yes, premiums sky-rocketed.

"We were always with Allstate from the time we bought this," says longtime Myrtle Beach homeowner, Lenny LaBlanc.

LeBlanc was one of those old school insurance customers who learned the hard way.

"I've always stayed with a named company, until now," admits LeBlanc. "[My premium] more than doubled about four years ago and then was going up every single year. And in my case,  They also insisted I keep my cars with them."

LeBlanc is among a growing number of smarter homeowners. Customer loyalty for him is right where insurance agents will tell you it should be...in the toilet.

"There's no loyalty on the part of companies to the customer either," says Jenny Taylor, an independent insurance agent in Pawley's Island. "They have to do what they have to do to protect themselves."

To that end, Farm Bureau chose not to renew thousands of customers in South Carolina this year. Allstate did the same to another 10,000. They seemingly dropped home insurance policies out of the blue, not because the homeowners were high risks, but because they are low priority in the insurer's latest financial strategy.

Angela Chandler is an agent who represents dozens of carriers for hundreds of customers.

"Cancellations, rate increases, all of these things could be merely a company decision, not necessarily anything to do with the client themselves individually," Chandler insists.

And she says there's no way to protect yourself.

"It is not your parent's insurance anymore," says the Acting Director of the South Carolina Department of Insurance, Gwen Fuler McGriff.

McGriff oversees the licenses of some 900 companies that write homeowners insurance. Only a tenth will even write policies in coastal counties like Horry County. But that still means you have about 90 choices. Ninety companies just waiting for you to compare their rates with your current company.

Afraid of signing up with an insurance company you've never heard of? McGriff says they wouldn't be here if they didn't prove their worth.

"When we're looking at licensing a company we're looking at their financials, their financial rating and how they conduct business in the state before they're licensed," McGriff explains.

Now that the 2012 hurricane season is coming to an end, use this opportunity to shop your coverage. How many of you will discover you've been spending hundreds more than you have to each year?

"Maybe 50 percent," says Taylor. "Yes, that is huge. And people just have to be aware of what they're looking at."

Insurers will still access your risk. Without exception, that risk assessment, or "clue" report will determine how low they can go with your premium. There are four specific kinds of claims that will send insurers running the other way, and push up your premiums for years to come.

They begin with dog bite claims. Even having a dog can bump your premium.

Also, liability losses. When someone falls on the front walk, your premium costs will do just the opposite. They're headed up.

Fire losses are a huge red flag to insurers, and finally theft losses tell insurance companies, if it happened once, it will likely happen again.

There's another trick some insurers will pull to determine your value as a customer. It's called the "drive-by." Agents are asked to physically check up on the properties they insure. If it doesn't look kept, it might not be worth insuring.

If you haven't taken a look at your homeowner's policy in a few years, chances are you're throwing away a lot of money, and worse, you're not getting better coverage for it.

Copyright 2012 WMBF News. All rights reserved.