Underwriting is the process by which insurance providers assess the risk of covering an individual’s property and determine the premium they will charge for the risk they are assuming.
Every insurer has its underwriting guidelines but, typically, they will include:
- Home features and systems: Outdated homes with certain plumbing or wiring that is likely to increase the frequency of claims may be denied coverage.
- Age, location, and construction of the insured home: Homes built in floodplains, for instance, might not be considered because they bear too much risky.
- Personal liability concerns: Underwriters will assess whether your property is likely to lead to a lawsuit. For example, if it comprises a staircase without railings that could pose a falling hazard.
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