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
-
What's Better Than Investing in Crypto? These 'Boring' PicksCryptocurrency may be good for a thrill, but older investors are better off with assets like bonds, guaranteed annuities, CDs and maybe dividend-paying stocks.
-
Four Actions to Lessen Retirement Stress for Women (and Men)Saving for retirement is anxiety-inducing for everyone, especially women. Following this four-part action plan can help improve your financial security.
-
Should You Buy Pet Insurance?You can fend off big veterinary bills with a policy that covers your furry companion.
-
Short-Term Rentals: 10 Things to Know About Sites Like AirbnbA successful short-term rental stay requires knowing the ins and outs of booking sites. Here's our take on Trip Advisor, Expedia, Booking.com, VRBO and Airbnb.
-
The Strange Gap Between Busy and Bored in RetirementBob Sipchen offers his observations on filling your schedule during retirement.
-
9 Year-End Money Moves to Make NowBoost your retirement savings, lower your taxes and get the most out of your health insurance.
-
Why Does One Claim Jack Up My Insurance After Years of No Claims?Even loyal customers can be hit with an insurance premium hike after a claim, despite going many years without any claims. There's a reason for that.
-
5 FAQs About 529 College Savings PlansThanks to recent policy changes, families have more options for what to do with money sitting in tax-advantaged 529 accounts.
-
How Lower Interest Rates Affect Your FinancesThe Fed's rate cuts will provide relief for some borrowers, but savers will have to work harder to get decent returns.
-
How to Use a Dependent Care FSA to Lower Child Care CostsWith a dependent care FSA, you can set aside pretax funds to cover care expenses.
