PROPERTY INSURANCE

Recently we heard from a client who unfortunately had pipes freeze and break in the bitter cold last week. It started a conversation about homeowner's insurance claims and property resale. This has become a problem in the past few years as insurance companies are increasingly reluctant to insure both properties that have had claims or homeowners that have made claims. Yes, that's right, they get you twice. Say for example you make a claim for damage caused by a sewer backup and then decide to move two years later. Your purchaser may have trouble insuring the property even if they go to another company because the address is "tagged" in a national database. If they can get insurance, they may ask you to pay the difference in the premium, which can be as much as 200% higher than it would normally cost. You can always say no, but it certainly complicates the deal. To make matters worse, YOU may have similar issues getting insurance for the house you are trying to buy because the same national database tagged your personal information. And because part of the insurance application requires listing previous residences, having a spouse apply for the insurance doesn't work. We've tried. The "penalty period" for a claim is usually about 5 years.


The Maryland Association of Realtors has a helpful pamphlet on the subject  Click HERE for a copy of the pamphlet . Of course the best advice you can get will be from your insurance agent. We refer Al Fuentes and Curt Sumpter at State Farm Insurance in Bethesda 301 657 2323 if you need a name.