Homeowners are being warned about what Realtor.com calls “storm-chasing” contractors who're contributing to an artificial rise in home insurance prices in some areas. Such contractors are well known, being the kind who go door-to-door telling homeowners they need to carry out repairs on their homes to fix cosmetic damage that's not nearly as bad as it looks.
Cosmetic damage refers to things like dents and dimples in roof vents or aluminum siding, the report notes, but this kind of damage is unlikely to lead to any major problems with the home. But the problem is that when people agree to have this kind of damage repaired if several people in the same region do so, it can lead to insurers increasing their premiums for the entire area.
"There's nothing you can do about a widespread storm that damages several homes in your area and ultimately raises everyone's rates,” Billy Van Jura, an insurance broker in Poughkeepsie, N.Y., told Realtor.com. “But you can help curb your own annual home insurance costs with a little-known option called 'cosmetic damage exclusion.'"
What is “cosmetic damage exclusion”? It's a simple amendment to home insurance contracts that makes coverage for cosmetic damage optional – in other words, homeowners can choose to pay for these damages themselves, and therefore don't have to worry about their premiums rising. They only need to call the insurers if their home suffers structural damage.
Troy Thompson, an independent insurance broker with Pinnacle Insurance Agency in Coon Rapids, Minnesota, told Realtor.com that by adding this exclusion, homeowners could save up to $200 per annum on their home insurance premiums. That's because minor damages from things like hail and wind account for about 40 percent of all claims, and many of these repairs are unlikely to be that urgent.