IMPORTANT THINGS TO KNOW ABOUT YOUR HOMEOWNER'S POLICY

CREDIT

Most companies will check your credit report. If it's fair or poor, they are less likely to insure, or will charge you a higher premium and offer less coverage. Statistically, people with poor credit claim more losses, so bad credit is a red flag to insurors.

If your report isn't good, explain why. Be up-front! If your problems were temporary -- due to medical bills or job loss -- you'll fare better than those whose "slow pays" are ongoing due to poor debt management. People with an "excellent" rating qualify for the cheapest insurance deals. A "good" or "fair" rating means that insurance will cost more per square foot. An "ineligible" rating means you are uninsurable no matter how expensive your house is.

You might want to get a copy of your credit report before you shop for insurance . Call Credit Bureau International (in Chattanooga) at 423-855-8300.

NON-STANDARD POLICIES

Be sure to ask the agent about a "standard policy." If the agent offers a "limited coverage policy," you are not well-protected because your coverage is extremely limited in some areas. This is a lot better than no insurance at all, but find out why your house doesn't qualify for an HO-2 or HO-3 policy with broader coverage. Is it because of the type of heat, or the general condition of the house? Is it because of your past record of claims? Is it because of your credit? Simply installing a central heating unit may improve your eligibility for a much better -- and cheaper -- policy.

Reason for Limited coverage policy: ________________________________________

Suggestions for remedy: ________________________________________

You may not be able to buy a good insurance policy at reasonable cost because of your present circumstances. Improvement in the following areas will put you in a position to get a much better deal:

You may want to call the Housing Info Line in Chattanooga at (423)267-5223 for suggestions if you run into serious barriers in buying homeowners insurance. Remember that many larger companies do not insure homes worth under $60,000. Ask for a referral to another agent or company.

KNOW YOUR "NON-COVERED PERILS"! DO YOUR HOMEWORK AND DON'T BE AFRAID TO ASK QUESTIONS!!

Many common types of accidents are covered in standard policies, but probably are not covered under your limited coverage policy: Discuss each "exclusion" or "non-covered peril" with the agent and ask "What if. . .?" questions. Read your policy carefully!

Limited coverage policies won't cover:

• Flooding; water which backs up through sewers, drains, or sump pumps; foundation or wall darnage due to surface water run-off.

• Damage from weight of ice or snow on roof.

• Falling objects on the house or car, such as rotten limbs, trees, chimney bricks, or wires.

• Damage to appliances or electronics from transformer blowouts or power surges.

• Accidental discharge of water or steam: damage to carpets of wallpaper if the tub overflows, water damage from broken pipes, or a leaking dishwasher or hot water heater.

• Frozen pipes.

• Cracking or bulging or burning from mechanical systems. For instance, if you leave the oven on and it bakes the counter-top, your policy probably won't cover the loss. If the wall heater warps the woodwork or ruins your computer, you'll be out several thousand dollars.

• Collapse of your house, garage, awnings, decks, retaining walls, etc. due to hidden decay, insect damage, weight of people or furniture such as waterbeds, or because of structural fault, sink holes or earth movement, or defective remodeling or construction.

• Theft. Theft is when your possessions disappear but there isn't evidence of breaking and entering which indicates "burglary". Be very careful about filing small burglary claims! They may get you canceled.

• Wear and tear, mechanical breakdown, rust, rot, industrial smoke and pollution.

Low-value policies do not offer "replacement coverage," and they may not even insure for the "market value" of your home. If your policy has a $25,000 maximum limit, for example, and your house is worth more, talk to your agent; for under $20 a year, you may be able to raise your coverage to $50,000! Remember, the "non-covered perils" still apply, and still leave you vulnerable in many types of accidents.

IF YOUR HOUSE BURNS, HOW WILL YOU PROVE WHAT YOU HAD?

Keep appraisals, inventories, serial numbers, and photos of jewelry, antiques and one-of-a kind items stashed in the home of a friend. Borrow a video-cam and make a tape of your whole house; keep it in a safe place away from your home!

AVOID LIABILITY CLAIMS! MAKE A "SAFETY TOUR" OF YOUR HOME

Ask a friend to make a safety inspection of your home with you. Someone who doesn't live there is likely to spot hazards that make you vulnerable to lawsuit. Look for sharp protrusions, loose toilet seats, anything that might come unhinged and fall, slippery areas like steps or bathroom, things you can trip over (such as loose rugs or linoleum, or toys or pot-holes in yard or driveway), areas that aren't lighted well (they'll use it against you in court. . . ), and especially, loose railings and loose or broken floorboards. Is your hot water heater turned too high? What can children fall off of? Is the porch and every step in safe condition?

We're sorry to say it, but your family dog may be your weakest point when it comes to other people suing you for injury received on your property. If your dog spends his pitiful life in chains, he is frustrated and angry, and doesn't know how to react to people in a trusting manner. He is therefore more likely to bite anyone near his turf. The typical cost of a dog-bite claim is $1,200, and one-third of all insurance claims are for dog bites. Animals used simply as "alarm systems" are deprived of love and stimulation, and their personalities become distorted. They are often more of a liability than an asset.