By Christina B. Farnsworth. Home insurers reeling from investment and claim losses are mining claims databases to justify policy denials, new fees, and higher premiums on existing homes.

Why does this matter to builders? Move-up sales are often contingent on the sale of buyers' existing homes. Lenders require homeowners' insurance. But if the contingent resale fails or gets delayed because of insurance issues, the builder may have to kiss the new-home sale good-bye.

Insurers are definitely scrutinizing resale homes, says Mary King, a Realtor with Coldwell Banker, in Roseville, Calif. King has lost deals because insurers denied coverage based on claim history. Other clients have been pushed away because the resale house qualified at far more expensive high-risk rates.

Many policies now insure less and include fees to discourage claims: For example, only a few companies in California still cover dwellings against mold claims, King says. Others, such as American Family, are charging fees to those who actually submit claims.

Fire investigation specialist Robert A. Corry urges underwriters to "add by subtracting." Advanced insurance industry computerized underwriting, claims, and public record databases (many available through the Internet) quickly and easily allow underwriters to check claim history. Underwriters can search by name, address, social security number, date of birth, and/or insurance policy numbers. Corry, assistant vice president in the property claims division of American Re's Hartford, Conn., office says, "underwriting manuals typically agree on one point--'The best predictor of the future is the past.'"