COLUMN: Carmel Hopkins

It hasn't happened here, yet.

Homeowners insurance has started to skyrocket nationwide. And, homeowners in some areas are having trouble getting coverage at all.

Susan Bithell, treasurer of the Nevada Insurance Council, said recently that it's not as burning an issue in our state as it is in neighboring states such as California and Arizona, but it could become a problem.

She pointed out that buyers shouldn't wait until the last minute to look for insurance for a home, whether it's new or a resale.

"When someone does an application for financing, it's time to call for insurance," Bithell said. "People need to be a little more forward in the insurance process."

Face it, as long as your home appreciates, your insurance costs are going up.

Statistics from the council show that home prices in Nevada increased 5.88 percent in 2002, the 12th consecutive year that property valuations have increased in the state.

Water claims such as problems with broken pipes, leaky roofs and overflowing appliances have increased claims significantly, as have claims for household mold.

Bithell said mold is nothing new, but the publicity surrounding it is definitely a 21st century phenomenon. Lawsuits have led to an explosion in mold claims in several states, including Nevada.

The cost of satisfying those claims is shared by all policyholders.

From 1998 through 2002, Bithell said, the number of noncatastrophic losses paid by insurers per insured home has decreased 20 percent. However, the average cost of each claim has increased 63 percent. As a result of these two factors, it costs companies 30 percent more to insure a home in 2002 than it did in 1998.

A fortunate few have insurance companies that take appreciation into consideration, hiking the coverage of the home appropriately. If your company doesn't do that, you might give your agent a call and have a chat about revamping your policy. It doesn't pay to wait for a fire to contact the insurance agent, only to discover that you're insured for only two-thirds the value of the home.

Bithell said that CLUE, also known as Comprehensive Loss Underwriting Exchange, which has existed for at least a decade, is a useful tool for would-be resale home buyers.

"CLUE can tell you how many losses the homeowner has filed for in the past three to five years," she said.

This report is accessible to the average person, who can purchase it with the permission of the homeowner for about $12, according to Bithell. This report lets the prospective buyer garner information such as whether there has been a water leak that could result in mold.

"All responsible real estate agents should ask the homeowner for permission to garner this information," she said.

On the up side, Bithell said that 97 percent of homeowners haven't had a claim on their home in three years. The joy of not having filed a claim is a reduction on the annual insurance policy -- sort of like being accident-free on your vehicle insurance.

She pointed out that insurance rates are based on a type of mathematics called actuarial science (I have visions of white-bearded wizards wearing robes and pointy hats decorated with crescent moons and stars). So, insurance companies know exactly what they're doing when they post a rate on your home.

If you haven't read your homeowners policy, take a few minutes to look at it. I recently learned my home is no longer covered for mold. Bet your home isn't either.

Carmel Hopkins, real estate product manager for the Las Vegas Review-Journal and Las Vegas Sun, can be reached at 380-4574. Her e-mail address is Carmel_Hopkins@ lasvegasnewspapers.com. Snail mail is P.O. Box 70, Las Vegas, NV 89125.

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