Finding Insurance Coverage in Disaster-Prone Areas

Finding Insurance Coverage in Disaster-Prone Areas

Finding Insurance Coverage in Challenging Markets

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If you live in a state where insurers are leaving the market, the thought of finding insurance coverage might fill you with anxiety. However, according to Loretta Worters, spokeswoman for the Insurance Information Institute, there are still options available even in these challenging situations. Not only can you renew your existing policy with an insurer that leaves the state, but there are also other insurers that are competing for your business in most parts of these states.

Finding coverage can be more challenging in a high-risk region, such as a forested area recently hit by wildfires. In such cases, Worters recommends reaching out to a broker who represents the remaining insurers in your area. These brokers can provide you with valuable information and guide you through the process of finding the right coverage.

In high-risk areas where standard policies are unavailable, there is another option called excess and surplus insurance. While these policies come with higher premiums, it is not uncommon for insurance in high-risk areas to be more expensive. The premium increase for excess and surplus insurance is determined on a case-by-case basis and depends on the level of risk in your area and your past insurance claims history.

To help offset the higher premiums, Dave Phillips, a State Farm spokesman, suggests taking steps to mitigate risks to your property. This could include rebuilding your roof with fire-resistant materials and maintaining a defensible zone around your property by removing leaves, debris, and other flammable materials. Not only can these risk-mitigation measures protect your home, but they may also qualify you for an insurance discount.

If you find yourself unable to purchase insurance from private insurers, there are state agencies that operate as insurers of last resort. For example, the California FAIR Plan and Citizens Property Insurance in Florida offer coverage options when all else fails. Although these plans are more expensive and offer less coverage, they provide a basic policy that pays for damages caused by fire, lightning, and smoke.

It’s important to note that the California FAIR Plan, for instance, costs three to four times the price of a typical homeowners policy and does not include coverage for standard risks like earthquakes, theft, and personal liability. While these plans are not ideal, they can provide a temporary solution until you are able to find more comprehensive coverage.

In conclusion, if you are struggling to find insurance coverage in a market where insurers are leaving, there are still options available. By reaching out to brokers representing the remaining insurers, considering excess and surplus insurance, and exploring state agencies operating as insurers of last resort, you can secure coverage for your property. Remember to also take steps to mitigate risks and protect your home, in order to potentially qualify for insurance discounts.