When Your Insurer Decides Your Property Isn’t Worth the Risk
A recent story in the Wall Street Journal (reposted on Realtor.com) explored about how some California homeowners recently found out their insurers wouldn’t renew their fire-protection policies. They reported that, in response, California announced a one-year moratorium forbidding insurers from dropping customers who live in or adjacent to ZIP Codes affected by this Fall’s wildfires. In addition, the California Department of Insurance said that over the past four years, insurers have declined to renew policies for 350k California homeowners who live in areas at high risk for wildfires. They say the problem isn’t just limited to California and that homeowners on the East Coast are losing coverage as well. Homeowners basically have three options (but each one has drawbacks): 1 – Adding disaster-resistant features could make your home more insurable; 2 – Shopping for comprehensive coverage from a different insurer; and, 3 – A state’s FAIR plan, which stands for Fair Access to Insurance Requirements and is considered the insurer of last resort. Meanwhile, in California:
There are also fears that insurers will ask the state’s Department of Insurance for across-the-board rate increases—or stop doing business in the state altogether to avoid further losses. “The problem with that is that carriers are not nonprofits. If you strip away their ability to underwrite, they can’t afford to do business,” says Karl Susman, a Los Angeles-based insurance broker.
Click here to read the full story at Realtor.com.
Click here to read the full story at the Wall Street Journal.
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