April 10 2010 by Ellen Roseman
You call a home insurance company to ask a question. Perhaps you’re thinking about making a claim, but you don’t know if it’s worth making a claim. Later, you decide not to go ahead.
Guess what? Your home insurance rates go up the next time you renew, just because of your inquiry. Who cares that you didn’t make a claim? The fact you asked was enough to raise your premiums.
Asking questions can lead an insurance company to cancel your policy. Or if you don’t have a relationship yet, it may reject you based on what you say. Read TB’s story below about Bel-Air deciding not to take her business after she asked about fixing up her new home before moving into it.
Meanwhile, home insurance companies are asking you more questions. In particular, some now ask permission to check your credit score. You’re free to say no, but this means you’ll be treated as if you had a low credit score and your rates will go up.
CBC Marketplace ran a story about home insurance and credit scores last night.
It also did a segment on Bloomex, using Terrie’s story from my blog (Feb. 17, 2010). Hey, Marketplace, I often give you credit. Why didn’t you return the favour after I helped you with your Bloomex story?
Finally, I have a tale of a couple who qualified for a home insurance discount because they lived close to a fire station. Their insurer, Coseco, refused to give them the discount because they hadn’t asked the right questions. They appealed to the consumer complaints officer and got some money back, but not what they felt they deserved.
Home insurance is unregulated, unlike car insurance (where insurers are barred from using credit scores to set rates). Maybe it’s time the provinces stepped in and imposed more discipline on home insurance.
After all, if your home is not insured, you can’t get a mortgage. And if you’re dropped by your insurer, you may find you’re blackballed. No other companies will take your business either.