Anyone who buys a home and has it financed will be required to seek homeowner's insurance.  Insurance is an important part of owning a home.  You need to be protected in case anything happens to your house or possessions.  Also, the bank or mortgage company that lends you the money to buy the house will insist on insurance, to protect their own investment.    Homeowner's insurance can seem complicated, but if you know what to look for you can find a good policy.   Learn the terms and language in a policy and shop around for the best coverage available.

You do not have to be an expert to get good coverage, but there are some things you should know.

Although there are many differences in policies, there are 2 basic kinds of coverage: 

• Replacement Value - this insures your home or possessions for the cost of rebuilding the home or buying new things; and
• Market Value - this insures your home for the price at which it would sell.  If you have an older home, the market value is not enough to replace it.  If something happens to one of your possessions, the insurance company will only pay for a used one of equal value.

A good way to think about the difference is to imagine you have a serious kitchen fire.  A replacement policy will rebuild your kitchen and replace the damaged appliances with brand new ones.  A market value policy might not even give you enough money to rebuild your kitchen, let alone pay to replace your appliances. 

A replacement value policy may cost more, but it is worth more if you have a claim.  You should be able to choos which kind of policy you buy.  Unfortunately, one way that insurance companies discriminate against certain people or certain neighborhoods is by offering only market value policies instead of replacement coverage.

It is against the law to be denied home owner's insurance, or charged more, or offered less coverage, because of your race, color, religion, national origin, sex, disability, or family status.

Don't rely on someone else to get insurance for you.  There are too many choices to make.  You should call several different companies to get information before you decide which policy to buy.  Ask the following questions:

• How much is the deductible?  You need to know the size of the deductible (how much you will have to pay each time you have a claim).  The higher the deductible, the lower the cost of your policy.
• How much does the policy cost?  This should depend on whether the policy is a replacement or market value policy, the size of the deductible, and what extras the policy has.
• What does the coverage include?  Market or replacement value?  How much coverage is there for your personal possessions?  Are there any extras?  Are there any exclusions in coverage? 

Be prepared to tell the insurance company these things:

• Where the house is located.
• What kind of construction (such as brick or wood frame).
• When the house was built.
• How much the house is worth.
• How close the house is to a fire station.

Each time you talk with an insurance company, write down the date and time of your call, who you spoke to, what you were asked, and what you were told.  If no one returns your calls, write that down too.

One way insurance companies avoid doing business with certain people, or people living in certain neighborhoods, is not to return their calls.  Another way insurance companies discriminate is to charge some people more for their insurance.  Sometimes the reason for this is not discrimination (for example, if one property carries a higher risk than another).  But insurance companies make some assumptions that may not be true.  They assume that some neighborhoods carry a higher risk than others.  They may find all kinds of ways to keep from selling insurance in certain neighborhoods.  For example, they may:

• Cancel the policy the 1st time you have a claim, or just not renew it.
• Refuse to give you replacement coverage.
• Charge so much that you won't buy their insurance.
• Refuse to give you a quote without inspecting the property.
• Refuse to insure certain kinds of houses that are only found in certain neighborhoods (for example, flat roofs).
• Refuse to insure houses worth less than certain amounts.
• Say your house is too old to insure, even if it is in good condition.
• Run a credit check before issuing a policy.
• Tell you they don't insure houses in YOUR neighborhood and refer you to another company.

Unfortunately, housing discrimination is sometimes found in the insurance business, especially if you live in certain neighborhoods.  The biggest problems are cancellations, non-renewals, and differences in the cost and quality of coverage.   Many agents and companies today are fair and don't discriminate.  But if you have any doubts or questions about a policy you now own or want to buy, call the Greater New Orleans Fair Housing Action Center (FHAC) at 504-596-2100.  The FHAC will investigate the problem.

Insurance discrimination destroys neighborhoods.  By reporting discrimination you can help create a healthy, livable neighborhood.  By reporting discrimination you help stop a practice that is not only illegal, but that hurts all of us - as individuals, as a community, and as a nation.