Orange County Home Owners – Got Insurance Claims?

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Orange County Home Owners – Got Insurance Claims?

Orange County Home Sellers and Home Buyers Each Have an Interest in Insurance Claims

As if you don’t have enough to worry about as a home seller in Orange County these days.  Like remembering to crate the dogs before you leave the house just in case a buyer wants to come in and take a look.   Or waking up 30 minutes earlier than normal to get the laundry picked up and the living room vacuumed before you leave for work.  But all that hard work has paid off and you have a buyer, you’ve got a contract, and in a few short weeks, you’ll be closed and you can move forward with that new big home you’ve set your sights on.  But then you find out that it wasn’t four years ago that the pipe burst under the upstairs bathroom sink.  It was 2 and a half years ago.  How’d you find out??  The CLUE (Comprehensive Loss Underwriting Exchange) report that came in the disclosure package.  (Big hint here – always ask for a CLUE report in your disclosures.)  Your insurance company didn’t forget when the pipes burst.  The Insurance Companies never forget things like that.  And there have been claims on homes – that’s why you have insurance.  So here’s a brief fly by on what you need to know about Home Owner’s Insurance claims and how they can affect the insurability of the home you are trying to buy or sell.

1. Claims stay with the property AND the insured.   Kind of a double whammy.

2. Expect that every insurance company will want proof that whatever caused the loss which generated the claim has been mitigated to prevent any future losses.  (Translation: have proof that you fixed the problem – like the receipt from the plumber – with details and a date.)

3. Once your home sells and you are ready to buy the next one, remember insurance claims stay with you.  One claim in the last three years probably won’t be an issue with most insurance carriers – if the repair and mitigation against future loss is documented.  But look for red flags on your application if you’ve had 2 or more losses in the last three years.  Insurance companies have BIG concerns with the frequency of claims on a property.  And you get to take that history with you to the next property.

4. Insurance companies see your house like a cardiologist see’s a heart patient’s cardio-vascular system.  If one of your pipes leaks, it’s a part of the same system and likely to leak somewhere else down the road. 

5. Changing insurance carriers won’t make the situation any better.  It might make it worse.  According to a local State Farm agent – you have to be CLAIMS FREE for 3 years to qualify for insurance.  If you are currently insured by State Farm, you can get coverage, you just lose your “claims-free discount” making your premiums higher.

6. By law, you are entitled to a free copy of your CLUE report annually.  Check this link, this URL: or call 866.312.8076. 

I’m Leslie, just keeping it real in Orange County Real Estate.

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