5 Reasons You Were Denied Renters Insurance

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They may not seem like much to you, but these are big red flags for insurers.

Key points

  • Renters insurance companies may reject applications if they feel the applicant or the property is too risky to insure.
  • Just because one insurance company rejects a borrower doesn’t mean others will.

Renter’s insurance is not as complicated as other types of insurance, and it is not difficult for most people to obtain. This type of policy provides the necessary protection for borrowers, not to mention the protection of their assets. But every request is not guaranteed to be approved. Here are five reasons why an insurance company may reject a renter’s job.

1. Location matters

The location of a house or building affects the risk of natural disasters. Liability insurance companies assess the potential for all types of natural disasters by setting premiums. The same is true for homeowner’s insurance. Policies for high-risk areas usually cost more because there is more risk that the insurance company has to pay. And if the risk is too high, the company may refuse to write all the points.

For example, if the house or basement is located very close to the coast in an area prone to flooding, this may cause the company to be cautious when insuring it. So is a rural home away from the nearest fire station. If the rental property was flooded or caught fire, the lessor would have to pay the maximum amount of the renter’s property that was damaged or destroyed in the accident.

2. Domestic hazards

Some items, such as pools or trampolines, are considered safety hazards and can increase the cost of insurance. A pool may not be a problem for a tenant if it is a community pool that is managed by the landlord. But if someone is renting a house with a pool, insurance companies may be concerned.

If the landlord invites guests and the guest injures himself, he can sue the landlord. The renter is required to pay renter’s insurance, which can result in a large fine.

3. Animals

Tenants are required to remove their pets and more than homeowners. Insurance companies often want to know about them. Some dog breeds are known to be more aggressive and more likely to bite people than others. These are some of the factors that can cause the insurance company to incur large liabilities.

Some companies can do this by offering dog bite free rental insurance. This means that the company will pay certain types of claims, but not dog bite claims.

4. Complaints about pre-rental insurance

As with any type of insurance, the more the owner has written in the past, the higher their policy will be. And if they make too many complaints, they may struggle to get help at all. A number of renter’s insurance claims that have been filed over the past few years indicate that the renter may not be responsible or has exposed himself to unnecessary risk.

Usually, when filling out a rental insurance application, companies ask for a history of the last three to five years. The exact requirements may vary by state and insurance company. Most insurers will want to know what type of claim the claimant made, when it was made, and how serious the incident was.

5. The publication is complete

Borrowers who previously had mortgage insurance but let their work lapse may have trouble finding new coverage. A liquidated damages policy indicates that the person may not be responsible and will not be able to keep their salary in the future. This is a huge red flag for insurance companies, who do everything they can to reduce the risk to themselves.

But just because one company rejects an applicant doesn’t mean they all will. The best move for a borrower who is refusing coverage is to explore other options. Check with a few other companies and compare prices side by side to see which one is the best.

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