OK in the first place a policy is actually a contract. That contract spells out each parties responsibilities. You, the insured has to make payment either in full or by payments on time. You also have to do certain things that reduce risk. They, the company, have to pay if you have a loss and met all of your responsibilities. Some homeowners policies go so far that the company will pay some if not all of the cost of reducing risk like tree removal of a tree that threatens a property. So if you say buy a home owners policy then add wood heat to that home you have increased the risk. You are required by the CONTRACT to inform the company. If you don't then have a fire caused by that wood heat they can refuse to pay because you did not meet the requirements of the CONTRACT.
When I was an adjuster no insurance company provided flood insurance themselves. It was all through the federal flood insurance program. They may have sold the policy but they were acting as the agent of the government. That is where some people get the idea that their company provides flood insurance.
Events like those currently in TX can cause real problems for insurance companies and cause them to lose money. With the rates we pay we have a hard time grasping that but most insurance companies are set up to run about a 5% net profit margin. A super storm, wild fire, earth quake or flood can wipe that 5% margin off the books real fast.
I'm sorry but the folks in TX are soon going to find out about their companies. If they never looked at the coverage provided by the mortgage company they may find themselves in trouble because most often they go with the cheapest provider. Others who actually bought their own insurance and bought based on price may be in the same boat. The cheapest companies are the ones most likely to try to deny claims and refuse to pay. You should not buy insurance based on price "because you have to have it". You should buy it with it in mind that you may indeed one day need it!
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Today's Featured Article - Restoration Story: Fordson Major - by Anthony West. George bought his Fordson Major from a an implement sale about 18 years ago for £200.00 (UK). There is no known history regarding its origins or what service it had done, but the following work was undertaken alone to bring it up to show standard. From the engine number, it was found that this Major was produced late 1946. It was almost complete but had various parts that would definitely need replacing.
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