Were you declined for renters insurance? What can you do about it? How can you get coverage? If you rent an apartment, you need renters insurance. Your landlord will require it, and it’s a good way to protect yourself. No matter where you live, there are some reasons you might have trouble buying a policy. We’ll use a Nashville Renters Insurance policy as an example. Why Nashville? Because outlying nearby rural areas often have concerns over protection classes.
Declined For Renters Insurance: Protection Class
The first thing to understand is why you were declined because of underwriting standards. More specifically, is the decline a result of the home or you? Different underwriters have different standards about what’s acceptable. This means that a home or an individual acceptable to one company might not be acceptable to another. In places like rural Tennessee, your location can play a role in this.
If you’re too far from the fire station, you don’t have enough protection from the risk of fire. Many companies will view you as not insurable. As a result, you could find yourself declined for renters insurance. That’s rare, but possible. The reason is that fire moves fast, and every second counts.
The Insurance Services Office divides the country into “protection classes.” These classes factor in distance to a fire station and to a reliable water supply. The higher the number of your protection class, the greater your risk. The ISO-published “Fire Suppression Rating Schedule” determines the class for your location. While the actual schedule is a closely held document, the breakdown looks like this:
- There are 105.5 available points in total. A higher score means a lower protection class and a lower risk from fire.
- Emergency communications in your municipality are worth up to 10 points.
- The fire department’s training, response, and equipment maintenance are worth up to 50 points.
- 40 points derive from available water supply. This includes fire hydrant inspection and testing. The number of hydrants within 1,000 feet of a location also is a factor.
- 5.5 bonus points are available for proactive fire prevention practices. This includes fire safety education and fire investigation capabilities.
Most companies would decline to write a policy for someone in protection class 10. Lower protection classes create discounts on policies as the availability of fire protection improves. Verisk offers information on the ratings, as well.
Declined For Renters Insurance: Underwriting Concerns About Your Home
Underwriting standards can include other factors as well. Building construction type is a factor. Deferred maintenance is a factor. The presence of an attractive nuisance such as a trampoline can also be relevant. What is deferred maintenance? All buildings require maintenance. A landlord who chooses not to complete that regular maintenance impacts building safety. Are fire escapes rusty from neglect? Are the windows decades past their serviceable lifetime? Is the roof old and leak-prone?
Deferred maintenance can increase the risk in a particular building. A leaky roof means damage, and even mold. An attractive nuisance means liability risk. Deferred maintenance also affects life safety. If old windows don’t open, escape from a fire may be impossible. Underwriters can and do perform exterior inspections on properties they cover. These inspections can result in being declined for renters insurance. A company can even cancel a policy as a result of the inspection.
Declined For Renters Insurance Based On The Applicant
Is living in an acceptable home with adequate fire protection enough? Are there other factors that result in a renters insurance decline? Yes.
When you apply for renters insurance, the company obtains information about you. This includes claims and credit information in most states. Consumer reports are part of the underwriting process. They are always ordered when you apply for insurance. Those consumer reports confirm what you’ve told us on the application. People are generally honest, but also generally forgetful. Verifying the information tells the company that you’ve disclosed all materially relevant information.
Verification of the data you provide may add additional claims to your application. It could even result in finding household members you forgot about. Also important is verifying that the person signing the application is who they say they are. The price of your renters insurance is subject to change based on this data. Some people find themselves declined for renters insurance for claims or credit history.
Why Does This Data Matter?
Why would an individual find themselves declined for renters insurance based on this data? High frequency and/or recency of claims indicates high risk of future losses. There is a correlation between credit score and increased risk of claims, as well. The good news is that in both cases, you may have recourse against inaccurate data.
Do you have extenuating circumstances causing a drastic change in your credit? You often may request reconsideration based on that. Examples might include a divorce or something else beyond your control. This process often must start with a written request, so allow appropriate time. If claims are incorrectly attributed to you, you can challenge that as well. But what if the information is accurate?
What’s The Last Resort If I’m Declined For Renters Insurance?
That’s where state FAIR plans come into play. What happens if you receive several declines on the voluntary market? In that case, you may be eligible for coverage through a FAIR plan. This is the insurer of last resort. As a result, coverage may not match the voluntary market. Renters insurance consumers rarely find themselves in this situation, however.
Few will receive multiple declines for renters insurance on the voluntary market. Renters insurance is easily available to nearly everyone in America. The voluntary market serves the majority of people effectively. For those who need alternatives, state-sponsored insurers of last resort are often available. There may also be companies in the voluntary market that are a better fit for your scenario. The best way to get the coverage you need without spending all day shopping for it is to call Effective Coverage at (800)892-4308 or click to get covered - whether you need Nashville, TN renters insurance quotes online or coverage anywhere else!
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