Spreading the risk:
As you know, the purpose of insurance is to spread risk among a large group so that no one person is subject to losses that are beyond his or her means to replace. This principle of insurance works when all participants in the group work to reduce their exposure to risk from the outset. It begins to break down when a high volume of losses occur and threaten the balance of premium collected against claims reimbursed.

Small claims add up:
When a high volume of claims is received, an insurance carrier responds by raising rates for everyone, or canceling coverage in an entire area that appears to be high risk. This has happened recently in Pennsylvania, where major homeowner insurance carriers pulled out of the state entirely after experiencing a high loss ratio -- the value of claims submitted began to exceed the value of premium collected.

This means fewer companies are writing homeowners insurance in the state. It decreases competition and eventually leads to higher rates for everyone. And, the recent high loss ratios are not the result of increased fires or natural disasters in Pennsylvania, but from the increased number of small claims submissions by homeowners. These are claims that range from $500 to $2,000 and are primarily the result of poorly maintained systems within the home. These are damages and claims that could have been prevented if properties were well maintained.

What you can do:

Use it for the major losses
Use your insurance only when absolutely necessary, when you cannot afford to pay for a loss and repair the damage yourself. Major losses may include fire and tornado damage while minor losses may include water stains to walls from leaky plumbing. Understand that broken pipes are usually not covered. The insurance will pay for damages to the walls and property, but your actual plumbing repairs would be paid out of pocket.

Put money aside for the rainy day.
Open a savings account and use it only for home maintenance repairs and to pay for those small plumbing leaks.

Maintain your property and major systems.
Routine preventive maintenance is your best protection against possible claims and increasing rates. Here are some measure you can make to protect yourself.

1. Check any accessible plumbing areas, such as under sinks and behind toilets. Have drips and leaks repaired.*
2. Shut off all exterior water taps during cold weather. Maintain adequate heat to prevent interior water lines from freezing. Pay particular attention to pipes located near the exterior walls. These should be properly insulated and checked during extremely low temperatures.*
3. Roofs should be maintained or improved to provide proper protection and drainage. Have your roof inspected annually for deterioration or damage.*
4. Keep gutters, down spouts and drain boxes clean and free of blockage. Runoff from exterior surfaces should be directed away from the foundation.*
5. Inspect trees for any signs of disease or deterioration. Trim diseased or damaged areas, or remove the damaged trees or shrubs completely.
6. Remove tree limbs which overhang any part of your home.
7. Tall trees near your home should be cabled to add support in the event of damage from wind, ice, and snow. Have trees inspected by professional landscapers to assess their strength.
8. Secure any outdoor equipment -- lawn furniture, charcoal grills, any lawn or home equipment which may be picked up in a strong wind.
9. Check power and cable lines above property to be sure they are clear of possible falling debris. Inspect antennae or poles periodically to be sure they are secure.
10. Electrical systems in the home should be properly grounded or equipped with power surge resistors.
11. Electrical appliances, including television sets, should be turned off and power disconnected during electrical storms and severe icing conditions.
12. Fireplace chimneys should be examined and cleaned periodically to reduce the possibility of fire starting within the chimney and spreading to adjacent walls.
13. Have heating and cooling systems checked before and after each season of high use.
14. Walkways, sidewalks, driveways, and steps should be cleared of snow as soon as possible after a storm. Use anti-skid materials where needed to prevent slip and fall accidents. Sidewalks and driveways should be checked at least once a year and cracks repaired as needed.

See how you can prevent fires from occuring during the winter.

Do you know what the safe clearence distances combustible materials should be from your wood, coal or pellet stove? See the diagram.

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