Underwriting Guidelines for Homeowner's Insurance

Insurance companies that operate profitably are able to do so by keeping their claim payouts to a minimum. Underwriters closely scrutinize any homeowners' insurance claims you have filed previously to assess their nature, dollar amount and frequency. If your claims history is excessive, the underwriter will likely consider you to be a bad risk, which can result in a higher premiums or even a total denial of coverage.

Underwriters evaluate various characteristics about the home itself. Older homes, for instance, may be more susceptible to damage, making them more expensive to insure. If the home sustained previous damage, underwriters may want proof that necessary repairs have been made and they may require a home inspection before issuing coverage. The type of construction is also important, as is the location. Homes located in flood zones or in coastal areas may be deemed uninsurable by certain insurance companies.

In addition to the home, underwriters will want to know more about you as a person. They will evaluate characteristics such as your employment history and stability, your age, and your marital status. Credit standing is also important, as many insurers make a connection between a poor credit history and a tendency toward irresponsible home ownership and maintenance habits. Insurers institute a process known as insurance scoring when using credit to determine your homeowners' insurance premium.

Underwriters want to know if the home will be owner-occupied, tenant-occupied or unoccupied. For instance, a home that is left vacant for extended periods of time, perhaps due to frequent travel by the owner or because it is not the owner's primary residence, may become a target for vandals. It might also face damage due to the lack of maintenance, rendering it uninsurable. If you plan to use the home as a rental property, underwriters may require coverage under a commercial instead of a personal policy.