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Watchdog says insurers are shifting risks to consumers

Though local agents said a basic homeowners policy hasn’t changed much in recent years, the Consumer Federation of America warns that more homeowners are being caught off-guard by provisions in policies that shifts risks — and costs — to homeowners.

Here’s a rundown of some policy items that the federation claims people should be aware of:

∎ Exclusions. Most policies contain exclusions for natural disasters such as floods and earthquakes. Consumers should determine if they are in a high-risk zone by checking flood maps.

∎ Deductible differences. Most insurance policies have at least two different deductibles. One applies a flat dollar amount for most losses and another applies a higher amount if the loss is related to high winds. The latter could result in significant out-of-pocket expenses in the event of a loss.

Local agents say the companies they sell policies for have not made these types of changes, though one has instituted a “named storm deductible” that kicks in whenever a hurricane or tropical storm gets an official name by the National Weather Service. The policies do not make reference to named winter storms, a new Weather Channel initiative.

In these cases, homeowners filing claims pay a 5 percent deductible, which typically comes out of the insurance award.

∎ Hidden clauses. Homeowners should check their policies to see if they include a little-known provision called an anti-concurrent-causation clause which kicks in when property is damaged by two causes acting together, such as by wind and flood. In this example, only the wind damage would be covered. This clause can limit or even negate coverage for all of the damage, even if one of the perils would have been covered had it been the only cause.

To read the federation’s announcement, visit www.consumerfed.org.

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