Claims history can affect a property's future insurability

February 29, 2004|By Anne Lauren Henslee

Homebuyers beware: Insurance claims history can come into play for those seeking to purchase or sell a home.

"Claims history is definitely a major bump in the road," said Beverly Rasmussen, a Realtor with ReMax100 and chair of the Maryland Association of Realtors' state legislative committee.

A recent sale almost fell through because of a prior claim on the property, Rasmussen recalled. The sellers had filed a claim after a storm damaged the house. That claim was a red flag for potential insurers, who deemed the property high-risk.

During the past two years, the risk of not finding insurance for a property with a claims loss has increased, according to real estate agents.

After being hit by natural catastrophes, increasing mold-damage liability and poor corporate financial investments, insurers have become more wary and less inclined to take risks when writing policies.

In response, the Maryland Association of Realtors is putting together a disclosure brochure for consumers.

"We're trying to make people understand that they need to start looking for insurance as soon as the contract has been accepted," Rasmussen said. "That way, they'll have time to address any problems."

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