Home Insurance – critical upgrades

“The insurance company doesn’t need that info – why the hell should I give it to them?”. A similar (hopefully less colourful) line was said to a client of mine when she asked for a copy of a work order required by the insurer for some critical work that has to be done to her new home purchase. The issue is about an older heating system and the contractor does not agree that he should have to produce a work order for the upcoming job. When it comes to critical upgrades to your home, the insurance companies do have the right to demand proof that work will be done – especially if they are giving you the benefit of the doubt that it will be done soon!

Sometimes when you go searching for a quote on your insurance, you run up against brokers and underwriters that live by the book. If you don’t follow the rules, too bad. Some of us (and it is probably a good majority), tend to make room for variations to the rules. We understand that you will be renovating, and as an insurance professional, we want to put you with the best company for you at the most economical cost.

That being said, we don’t give things away for free. In the case of this client, her home inspection revealed several deficiencies that had to be resolved. Her new home had older electrical standards (80 years old) and an old heating system. The insurance company that I chose to work with wanted to ensure that the work that needs to be done is completed and they wanted proof that the work is booked and then proof upon completion.

Older electrical and heating systems, like anything can start to show their limitations over time. Knob & Tube wiring (an old standard) can’t keep up to the power demand of today’s consumer electronics. The heating system is also very old and needed replacing.

So when we get comments like above, it is best put like this: In the event of a claim, you want proof that the insurer will pay you. With insurance companies, they want proof that they won’t have to pay a claim. They have YEARS of actuarial data supporting their decisions to insure a property – If they don’t wish to insure knob and tube wiring – they probably have a pretty good reason for it. So as a contractor, if your client is required to get the work done and the insurance company wants to make sure it going to be done – don’t you think that you (again as the contractor) would help you client with a simple printout stating the agreed upon work, including the estimated time of completion?

I think that it would take a stress off your client’s shoulders and make you look better to them – heck it may help you get a referral and more work!

The insurer’s job is to insure cases (home, auto, business etc) that are not as likely to make claims. That is the basis of responsible insuring. If they are accepting a property that is not within their “comfort zone”, they are usually doing so because it is agreed upon that the changes will happen pretty quick – without proof, how else are they going to know?

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]