It's been a difficult year in weather, and there's still plenty of time left in wildfire and hurricane season. Hurricane Idalia swept through Florida, Georgia and the Carolinas, potentially leaving behind billions of dollars in storm damage, while Maui is recovering from deadly wildfires that devastated the island. Otherwise this year, the West and Northeast have dealt with extreme flooding, while the South and Midwest have handled heat waves and tornado outbreaks.
It all makes it seem that much more pressing to make sure your insurance coverage is up to date — but for some regions, insurance may be hard to find precisely because of the natural risks typical to the area, making insurance companies averse.
If you live in a state where insurers are leaving the market, you still have options, says Loretta Worters, spokeswoman for the Insurance Information Institute.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If you already have a policy with an insurer that leaves the state, you won’t lose your coverage and should be able to renew it. Worters also says that in most parts of these states, there are still insurers competing for your business.
Finding coverage can be more challenging in a high-risk region, such as a forested area recently hit by wildfires. Worters suggests first contacting a broker representing your area’s remaining insurers.
It’s possible that even if standard policies are unavailable, you could buy something called excess and surplus insurance. These policies charge higher premiums, but that’s not uncommon in high-risk areas. The premium increase is set on a case-by-case basis and depends on the level of risk in your area and your past insurance claims history, Worters says.
To offset the higher premiums, State Farm spokesman Dave Phillips recommends taking every risk-mitigation step possible, such as rebuilding your roof with fire-resistant materials and maintaining a defensible zone around your property by removing leaves, debris and other flammable materials. You may qualify for an insurance discount while protecting your home.
Finally, if you can’t buy from private insurers, state agencies such as the California FAIR Plan and Citizens Property Insurance in Florida operate as insurers of last resort. The FAIR Plan, for example, offers a basic policy that pays for damages caused by fire, lightning and smoke, Worters says.
However, these plans are expensive and offer less coverage. The California FAIR Plan costs three to four times the price of a typical homeowners policy and doesn’t include coverage for standard risks, such as earthquakes, theft and personal liability.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
Visa Is the Worst Dow Stock Wednesday. Here's WhyVisa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Another Analyst Moves to the Sidelines on Tesla Stock After EarningsTesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Medicare Upgrades Could Disqualify Your Private PlanIf you're delayed taking Medicare because you have employer coverage, changes ahead may disqualify your plan.
-
Take a Mid-Year Review of Your Health Insurance CoverageWhether it's monitoring your deductible or using a health savings account, here are the best ways to maximize use of your health insurance coverage
-
Now's a Great Time to Build a Bond LadderNavigating how to proceed with new or rollover money can be daunting. Here are some of the best ways to guarantee a high yield to maturity and full recovery of principal.
-
Who Do High Interest Rates Hurt? College StudentsHigh interest rates mean college students will pay more to borrow. Savers will continue to benefit but need to remain vigilant.
-
Widows Share Their Financial StrategiesWidows discuss what helped - and would have helped - with finances and documents after their spouses' deaths.
-
10 Things You Should Know About Reverse MortgagesA look at what to know about reverse mortgages, and why caution around them is warranted.
-
5 Models That Show Hybrid Cars Might Be Right For YouA Kiplinger guide to hybrid cars with five models that could be right for you.
-
5 FAQs About Student Loans, AnsweredHow new government policies might benefit federal student loan holders.
