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how is homeowners insurance figured

Sep. 9, 2007

Do any carriers place a surcharge on homeowners policies? If so, what are they?

Jack, Massachusetts

Dear Jack,

Lucinda Woods, the director of policy for the state ratings bureau for the Massachusetts Insurance Division, says that she doesn't know of any companies that place a surcharge on homeowners policies. (Also called a "debit," a surchage is an additional charge on top of your base rate that you must pay after filing several claims.)

While an auto insurer may increase your rates after you have a couple of accidents in quick succession, Woods says that home insurers tend not to do this. Instead, if you are viewed as a high risk, the company may simply decide not

to renew your policy.

If a company nonrenews you, start shopping around for another home insurer ASAP. If you find that no one will insure you, check with the Massachusetts FAIR Plan, which is the home insurer of last resort. You can call them at (617) 723-3800. Because a policy through the FAIR Plan is expensive, make sure you've exhausted all your other options first. For more, see our story on One home insurance claim? Not a problem!

For more information on FAIR Plans, see Which states have a FAIR Plan?

Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.

Source: www.insure.com

Category: Insurance

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