Selecting an insurer
Coverage and costs vary greatly by company. It's important to shop when choosing an insurance company. Comparison shopping takes a little more time, but it can save you money!
- The key to comparison shopping is knowing what coverage you need and then getting premium estimates (rate quotes) from a number of insurers. Each policy should provide the same amount of protection for your home, its personal contents, liability protection, and medical payment coverage. If you want full replacement-value protection on your house and personal items, make sure this coverage is included in all policies you consider.
- Insurance companies use one of three methods to sell their products.
- Independent agents represent several companies and can give you several quotes.
- Exclusive agents only sell the products of one insurance company.
- Direct market sales are over the Internet or by mail or telephone.
- Have the agent explain the exclusions and limitations in the contract and quote options for perils like flood and earthquake that are not covered under the standard policy.
- Cost is just one factor to consider when choosing an insurance company. It's also important to look at the company's financial condition and how it treats its policyholders. A company's financial information is available from the agent that represents the company.
- For information on company complaint statistics visit the Insurance Division website here: Complaint Statistics.
- It's illegal for unlicensed insurers or agents to sell insurance. Business cards aren't proof that an agent is licensed. If you do business with an unlicensed agent or company, it might not pay your claims or refund your premiums if you cancel your policy. If an unlicensed agent or company contacts you, check with your state insurance department immediately, so it can investigate. Your actions may protect someone else from being victimized.
Questions you should ask the agent
- Are the agent and the insurance company licensed by my state insurance department? For how long? You can find this information on the Oregon Insurance Division website: http://www4.cbs.state.or.us/ex/ins/inslic/agent/index.cfm
- How can I find out the claims history of the home before I buy it?
- If I submit a claim, how will it affect my premium when I renew the policy?
- What discounts are available?
- What does the policy cover? What doesn't it cover? What are the limits to the coverages?
- How much coverage for my personal property do I need?
- Should I buy flood insurance or earthquake coverage?
- How will my credit history affect my premium?
Underwriting standards are rules insurance companies use to decide whether to insure your property. A company may decline your application for coverage if your property does not meet its underwriting standards. Each company has its own underwriting requirements, but typical ones include:
- Age, condition, and square footage of your home
- Property upkeep and maintenance
- Type of construction (brick, frame, stucco, etc.)
- Exterior lighting or security systems
- Home value and proximity to fire protection
Many homeowner insurance companies also use your consumer credit history as one part of the review process. See Credit Scoring. Insurance companies will review the number and size of claims that you have filed.
In 2005, the Oregon Legislature established rules dictating how insurance companies can use your claim information. Specifics about that law can be found at this link: Homeowner's Bill of Rights
What to do if you can't get coverage
You may qualify for limited coverage under the Oregon Fair Access to Insurance Requirements Plan if you have difficulty obtaining traditional insurance protection for your home. The FAIR Plan provides limited coverage and does not provide liability protection. Your insurance agent can contact the Oregon FAIR Plan Association for additional information:
Oregon FAIR Plan Association
8285 SW Nimbus Ave., Suite 104
Beaverton, OR 97008-6466