Home owners insurance question

[shoopy]

Due to a wind damage claim about 2 years ago, my premium with a large well know company is a bit high. Most other companies are not able to provide a lower rate. I finally found another large well know company that would offer me the same coverage at the less than half the price I am paying currently.

On one hand, I have been with my current company for several years, and the higher rate looks better with regards to expenses, and maybe they would be more likely to keep me after I file chapter 7.

With the other company, if I wait too long, my declining credit rating might make them change their minds about insuring me at all. And if they did insure me, would they be more inclined to boot me at renewal time, if they find out about my chapter 7?

Should I switch or not?

[AngelinaCat]

If you are thinking about switching, I suggest doing so before you file.

Some companies will not insure people who file BK, no matter what. Others will only do so after you have gone five years past your discharge date. I learned that the hard way. Whether they will drop you at renewal time, I can't say. Insurance companies can and will drop coverage or pull out of certain areas because of climate dangers, poor demographics, or whatever reasons they can legally justify. We have had many insurance companies pull out of Florida because of the 2004/2005 hurricanes.

[btbeme]

While most property insurance companies are happy to collect your premiums, that is no guarantee at renewal time. Most of the time they compensate for a client's mishaps by raising premiums rather than canceling. If there is a risk that their profit margins will suffer (as measured by claims they would have to pay out vs. your premiums) they might drop you. Remember, they are insuring the property, not you. The value of the property and what might happen to it is their biggest concern. Whether or not you are squeaky-clean credit-wise isn't as important as whether houses have been mysteriously burning down around you. But, you will generally pay higher premiums for lower credit scores.

Now, as ACat touched on above, if you are in a neighborhood that has been filing BK and getting foreclosed by the truckload, there is a better chance that insurance company's risk factor is too high and they could decline to add you to that risk pool.

I say if you can save money, then save money. You don't have to cancel your current policy until after you have the new one in hand and know all of its costs. No way to predict what could happen next year with either company.