Homeowner's Insurance Underwriting - Part 2

The Location of your home and how it affects your insurance.

The General Area of the Country:

Different areas of the country are affected by man-made and natural disasters. Brush fires are a large concern in the Western United States as are mudslides and earthquakes. Tornado Alley stretches across the Midwest. The Eastern and Golf coastal areas are prone to hurricanes and storm surge. Flooding can happen anywhere, especially along rivers and lakes. High crime areas in cities, large and small. Sink holes and areas with past or present underground mining activity. These influence your premiums and even the availability of some coverages in a homeowner’s insurance policy.

Fire Protection:

Fire protection plays an important role in underwriting a home insurance policy. Most fire departments have a Fire Protection Rating of 1 (the best) – 9 (very limited protection.) These are not randomly assigned by underwriting, Insurance Services Office, Inc (ISO) is the leading provider of FPR for the United States. Many insurance companies use the ISO rating and guidelines to determine eligibility and premiums.

What are the basic guidelines in determining the FPR for your home? Is the home located inside city limits? If so, it will have the same FPR as the city fire department. Burlington IA is a 4. If the home is located outside city limits but within 5 miles of the responding fire department and there is a public fire hydrant within 1000 feet then the home receives a rating 1 FPR higher than the fire department. If the home is within 5 miles of the responding fire department but over 1000 feet from a public hydrant it would receive an 8B or 9. If it is over 5 miles from the responding fire department it would receive a 10 (no recognized public protection.)

In areas outside of city limits it is important to know who the PRIMARY responding fire department is. Make a phone call (not 911) to the nearest fire station to make sure you know the answer.

Response time is also a factor in this equation. How long does it typically take the fire department to arrive on scene from the time the first 911 call is received? If it is a volunteer fire department, the firefighters have to get to the station, get geared up and get the equipment on the road. Response time can be lengthened by 5 - 10 minutes. A fully loaded truck is not as maneuverable as a passenger vehicle so it takes longer for them to arrive on scene than road miles would indicate. What about water to fight the fire, without a hydrant nearby, water must be brought in and replenished. Fire departments are finding better ways to get more water on scene but it still needs to be hauled in, which takes manpower, equipment and time away from fighting the fire.

I mentioned Mutual Aid Agreements in the first post. Mutual Aid Agreements are quite common in our area. They provide for one or more nearby fire departments to respond to help fight fires, or cover calls that come in when the primary department is on another call. Most often the primary fire department has to request mutual aid.

Other Factors:

I have spent a lot of time on fire protection but other factors that are considered are the proximity of neighbors and the visibility of your home. If your neighbors are fairly close and can see your home, they are more likely to notice if there is unusual activity at your home when you are gone; helping protect you from theft, or smoke; indicating a possible fire.

A Homeowners policy is NOT designed to provide coverage for most commercial, farm or business activities on your premise. There is limited business property coverage and generally no liability coverage provided. Many carriers limit the number of acres they will extend coverage for. NEVER assume you have coverage for these without consulting your insurance agent. Depending on the exposure you may be able to endorse your policy to provide coverage. Or you may need to secure a commercial or farm policy to cover these exposures.

Trampolines and pools: Personally, I would kill for a pool in my backyard. But I also have a lot of trees so rather than spending most of my time skimming, I have no pool. But, if I did decide to have one, I would have to make sure to abide by my city ordinances, make sure my insurance carrier was aware of it and that it would pass the underwriting guidelines.  Some carriers require you to sign an exclusion - meaning they provide NO LIABILITY/ MEDICAL or PROPERTY DAMAGE, you may become liable for resulting from ownership/care, custody or control of a pool or trampoline. Some carriers have certain guidelines that must be met – fencing, alarms, locks etc. before they will accept your application or continue your coverage. Other carriers will decline your application or non-renew your coverage if the item(s) do not meet underwriting guidelines or are not removed and/or you sign an agreement to not replace them.  Consult with your agent BEFORE you buy a trampoline or pool.

Ponds and creeks are often found on rural acreages in our area, while they are not generally a reason for a policy to be declined, the carrier should be informed that they are there.