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FIFTY YEARS AGO, Mary Ann Selva�s grandfather built the first house in Dickinson, Texas. In 1995, she inherited his homeowner�s insurance policy when she moved in. Since then, she has filed two claims, the first claim was $2,000 worth of sheetrock damage, and the second was a hefty $20,000 claim when pipes broke and flooded the house in August of 2001.
       Even though the homeowner's insurance company paid both claims, they canceled her coverage a month later.
       Selva says aging pipes caused the bulk of the damage, but her homeowner's insurance company was concerned about other potential problems.
       In 2001, insurers paid more than $850 million against mold claims in Texas.
       �If you said water, that meant mold. That meant money. That means they were going to have to pay, so if it was any kind of water claim at all, so I came to find out, you�re persona non grata and you�re out,� says Selva.
       Mold isn�t the only problem, the insurance industry, and particularly the homeowner's insurance branch, has had record losses due to a number of natural disasters like hurricanes and earthquakes.  

�All the underlying costs of homeowner�s insurance have gone up, repair costs, construction costs, the cost of getting reinsurance. And because of all these factors, basically, homeowner's insurance companies can no longer afford to do this,� says Jeanne Salvatore of the Insurance Information Institute.
       For every premium dollar they earn, companies are currently paying out an average of $1.18. Therefore, some insurance companies have stopped writing new claims in certain areas and renewing clients, and industry-wide, rates are rising.
       Homeowner�s insurance rates are expected to rise nine percent this year, an increase of about $40 on the average homeowner�s policy, yet 51 million Americans have already had to pay more for homeowner�s insurance in the last two years than they had in the past. Because the type and frequency of claims can determine how the homeowner's insurance company views a consumer, it is important for homeowners to have a copy of their claims history, called a clue report.

�That report will list the history of that home and tell you whether there�s been any mold damage, water damage, flood damage, previous fire damage, structural damage in that house,� said Robert Rusbuldt from Independent Insurance Agents & Brokers.  Consumers should check for any errors, such as inquiries that were mistakenly recorded as claims, and report discrepancies to the insurer and company issuing the report. If the insurer refuses to correct something, consumers can find help through the state. Most states offer a Fair Access to Insurance Requirements (FAIR) plan for people who are unable to find insurance through a traditional carrier.

However, FAIR coverage is usually expensive, says Norma Garcia from the Consumers Union. �The limitations on the homeowners insurance policies are greater than those you would get through your typical homeowners insurance carrier, so really FAIR Plans are plans of last resort though they are available for consumers who find themselves in a pinch.�

For Mary Ann Selva, what used to cost her $519 now costs her close to $1,600.

Home buyers can usually get clue reports, which will have the claims history on the house, from the seller or real estate agent.

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