Residential real estate in Nashville has rebounded, as evidenced by the fact that there were more homes sold in 2011 than in 2010. This phenomenon has given hope to more than 300 area residents who have obtained real estate licenses and joined the Greater Nashville Association of Realtors in the past 12 months.

Just when they thought it was safe to join the fray, a new beast has arisen and offered new challenges to homeowners. Homeowner’s insurance, often referred to as hazard insurance, was once considered an afterthought. It now looms as obstacles to those purchasing homes.

For years, buyers could contact their insurance agents and get it in a matter of minutes. In the current insurance market, both the home and the buyer must pass the muster of the insurance company.

The buyer now must have a sound credit score. And with the tightening of lending restrictions, that would seem to be a requirement that would already have been satisfied in order to obtain the financing. But there are cases in which buyers with high scores have been denied.

Then there is the CLUE (comprehensive loss underwriting exchange) report. In the past, if a home had numerous claims for the same offense, it could be denied coverage or force a higher premium. Today, it’s more complicated.

For years, real estate agents have fielded calls from insurance agents with a few questions about the home before issuing the policy. Such queries included questions as to the age of the house, the proximity to fire hydrants, the covering – brick, siding, EIFS – and, more recently, the type of electrical circuitry. Knob and tube wiring has been difficult to insure for the past few years.

Now, however, the questions vary from carrier to carrier with many well known national companies refusing to issue homeowners insurance at all. As in the case of the banking industry, such scrutiny is understandable as hazard insurance is not a right, nor should a company be forced to participate in a practice that loses money. And, with the rise in natural catastrophes across the country in recent years, it is understandable.

However, this is Nashville, and we are accustomed to being unique and unaffected by negative national trends. As Ralph Schulz, the president of the Nashville Area Chamber of Commerce often and correctly cites, Nashville is always the last in a recession and the first out.

And that was the case with the area and insurance. It was merely a formality to obtain insurance. Then, there was the May 2010 flood. And as is the case in some football games, the city outkicked its coverage. Thousands of insurance claims flooded the carriers.

Then in 2011, it rained and it rained and it rained. While there was no real flooding, the ground became saturated and basements with foundations weakened by the big flood experienced water intrusion. The city’s canopy of towering trees had their root systems weakened by soaked soil and fell helpless in the high winds.

Homeowners filed claims, just as they had the year before. Yes, the year before. Why not? It was a process. Things were damaged and claims were filed and payment was expected.

This year, the adjusters were more frugal. And, if a person attempts to buy one of those houses, a structure that has survived scores of years of normal wear and tear only to succumb to a 500-year flood, that buyer should beware. Order the insurance during the inspection period. Better yet, make it a contingency of the contract.

Richard Courtney is a real estate broker with Pilkerton Realtors and the co-author of Come Together: The Business Wisdom of the Beatles and can be reached at [email protected].