By Todd Mason
Star-Telegram
Remember last summer? Insurance companies clamped limits on the homeowners insurance they're willing to write in these parts, Tarrant County being the reigning hail capital of the world.
So what happens this year? Not much. A few clouds. A little rain. But no baseball-size celestial missiles.
But that doesn't mean that you can stop worrying about roofs. Agents for State Farm, Farmers and Allstate may decline to write new policies depending on what their quotas look like at the moment.
That leaves 76 other insurance companies out there writing homeowners insurance, give or take a couple. But you may find yourself asking what you really know about Amica Mutual Insurance Co. (Inexpensive and highly regarded but picky.)
Of course, insurance companies ask the same question about you. Expect them to be finicky about past claims and the condition of your home. They may decline your business if they think that hail damage hasn't been repaired properly.
All of this is making the phones ring at the Texas Department of Insurance in Austin. The folks there asked me to help them get the word out on how to shop for homeowners coverage.
Happy to oblige:
Don't sweat it if you already have insurance. Your insurance company can't drop you unless you've made three or more claims in the past three years, and weather-related claims don't count.
And the big three let you take your coverage with you if you trade up to a more expensive home. "If we have a guy with a $10,000 renter's policy and he wins the lottery and buys a mansion, he is going to be accommodated," said Randy McCoy, a State Farm agent in Arlington.
The next few dozen applicants will hear a different story. "Every agent every month will get a report of business that has come ]
Mason
and gone from the agency," McCoy explained. The excess, or deficit, determines whether or not the agent can write new business. (McCoy cannot.)
State Farm is trying to shrink its exposure in Dallas, Tarrant and Denton counties. The insurer aims to grow modestly in Johnson, Parker, Wise and surrounding counties.
Allstate remains on a growth pattern in the Metroplex. Though homeowners may find an agent who can't take new business, said spokesman Mark Garrett, "we are continuing to write homeowners in Tarrant County."
Farmers has the most restrictive policy. In about 60 percent of the county, its agents can't add any new business, period. In the remainder, agents can replace the business they lose.
What to do if you're the odd homeowner out? Call the state insurance department at (800) 599- 7467 and order a Homeowners Rate Guide. The guide tells you which companies do business in your county and how much they charge on several sample coverages.
Then call the department at (800) 252-3439 to ask for profiles of insurers that interest you. The state can tell you how many complaints it fielded against the company in the past three years, its financial strength as reported by A.M. Best, a rating service, and a brief company history.
Once you've narrowed your search, the regulators suggest visiting the carrier's agent rather than phoning. Agents want to size you up. If they like you and the particulars of your home, they'll inspect it and take pictures.
Needless to say, a well- maintained house is easier to insure than a run-down one. Why? The common type of homeowners policy pays replacement costs. Suppose your home is damaged in a fire. Carriers are required to paint it after rebuilding it even if the siding was years overdue before the fire. Most will decline the honor of insuring such a home.
Buyers of fixer-uppers might explore the version that pays off on the market value of the home. If your house is insured for 60 percent of its replacement costs, for example, this policy would kick in 60 percent of the cost of a new roof.
A final caveat on home inspections: Insurance companies in Texas can't discriminate against you because of your age, race, sex, race or neighborhood. The insurance department wants to hear from you if you suspect discrimination.
On to the roof. Expect insurers to go over every inch of your roof looking for unrepaired hail damage. If the previous owner collected a check for hail damage and pocketed the money, your insurer wants to know about it to avoid paying for it a second time.
Because it's disconcerting to lose your insurance a week or so before closing, Allstate's Garrett suggests that you take matters into your own hands. "Have a roofing contractor inspect it," he said.
How the roof was fixed matters, too. The cheapest approach is to nail a second layer of asphalt shingles over the original roof. Alas, overlaying, as it's called, only works once.
The second time around, an overlay costs extra because of the added expense of tearing off and hauling away two roofs. In the worst case, asphalt shingles nailed over wood shingles, repair can mean stripping the roof down to the rafters and installing plywood decking.
A few months back, the big three decided they wouldn't insure homes that have roofs with overlaid wood shingles. After Commissioner Elton Bomer invited them in for a chat, they changed their minds.
Allstate is the most liberal of the three. "We're allowing overlays to be taken as long as the roof is in good condition," Garrett said. Farmers and State Farm, because of their controls, aren't likely to insure overlays unless they already cover the house in question.
Be sure to ask the other 75 insurers where they stand on overlays. You have an argument if the company is the current insurer of the home, and thus presumably saved money on the overlay.
You also have a choice. Exercise it.
Todd Mason's column appears Tuesday, Thursday and Sunday. Phone, 390-7552; fax, 390-7774.
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updated 6:25 AM on 7/17/96