Someone trying to get Long Beach, CA Renters Insurance asked us what is a prohibited risk on renters insurance. In the course of conversation, we came to find that he needed a different kind of policy, but it’s a great question.
A prohibited risk on renters insurance is, in a nutshell, something that the underwriter has determined they will not write a policy for if it’s present. It’s something that presents more risk than the company is willing to take on for a particular type of policy. It will, of course, vary based on the underwriter, and just because you can’t get a policy with a particular prohibited risk one place doesn’t mean there aren’t options.
Certain breeds of dogs are often prohibited risks. Those breeds are alleged to present a higher risk than what the company is willing to accept. This also likely would include animals which are known to have bitten people in the past. There is a statistical correlation showing that a dog which has bitten is likely to do so again, and that’s just not a risk many companies want to take.
Renters insurance prohibited risks also often include residences which are within a certain distance of certain industrial or commercial uses. Some underwriters won’t take on a risk that’s located above a dry cleaning shop, for instance, because of the nature of the chemicals involved and the increased danger of fire. Some won’t take on a residence within a certain distance of factories for the same reason.
If you rent a home and it has a pool, particularly one with a diving board, you may find that you have difficulty with some underwriters. The reason those are prohibited risks with some underwriters isn’t that they think you’ll have a drunken party and someone will get hurt. The risk is that someone will get into the pool when you’re away or not watching it and will injure themselves. That’s a very real risk, because people seem to gravitate towards pools that they don’t own if there’s any possible way to access them.
Prohibited risks have nothing to do with you personally as a proposed insured. They have to do with the chances of that particular factor causing or increasing the likelihood of a loss. Rating based on those risks, and increasing the premium to an acceptable level, would not only require significant attention from an underwriter and significantly more detail about the property and the risk in question, but it would also drive the cost of the policy to an unacceptable level in many cases.
Risks which are prohibited are so not because the underwriter couldn’t take it on, but because no one would purchase the policy at the necessary price in many cases. These risks would price the policy so far out of the market as to not be worth quoting or writing. In cases like that, there are companies with the ability to write policies for that type of risk, and they should be consulted. These specialty companies have experience in exactly that kind of underwriting and have balanced their book of business such that they’re able to take on the risk at a reasonable price.
To learn more about prohibited risks, or about renters insurance in general, just call (800)892-4308 or click to get covered - whether you need Long Beach renters insurance quotes online or coverage anywhere else!
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