Florida Insurance Consumer Advocate Robin Westcott calls that practice a
troubling trend and wants it to stop.
Here's how it works: Say you've been regularly paying your property insurance
premiums, but then you submit a claim. At that point, your insurance company may
check your credit
history. If it finds an unreported credit problem in your past, such as
foreclosure or even a small claims judgment, the insurer cancels your policy and
won't pay the claim.
That leaves homeowners with mess. They can't
to fix the problem and other insurance companies won't offer coverage if you've
been canceled for misrepresentation on an insurance application.
Westcott says insurers should not use
to decide whether they're going to pay a claim.
She says Universal Property and Casualty Insurance, one of the largest property
insurers in Florida, uses this practice. She wants the state to investigate.
She urges homeowners to take a close look at their property insurance
application to make sure it includes any past credit problems.
If it does not, you put yourself at risk if you make a claim and could have
trouble getting new coverage.