7 Things To Do Immediately If Your Homeowner’s Insurance Drops You
Written by
Jordan Rosenfeld
Edited by
Renee Ross
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Devastating natural disasters are becoming a more common occurrence across the United States, often destroying personal property and homes.
As if that isn’t bad enough, overwhelmed insurance companies are dropping policy holders, sometimes without warning, who live in areas known for higher hazard risks, such as wildfires or hurricanes, as some devastated homeowners in the recent Los Angeles fires learned.
What should you do immediately if your homeowners insurance drops you? Experts weighed in.
Contact Your Insurance Agent
The first thing a consumer should do is to contact their insurance agent, and maybe more than one, since some agents will have more companies available to them than others, according to Jennifer Gambill, a client advisor at World Insurance Associates.
Start Looking For New Insurance
If an insurance company drops your home insurance or part of your policy that you need, start looking for another insurance company right away, said Melanie Musson, a home insurance expert with InsuranceProviders.com. “If your insurer pulls out of your area, it’s likely others have, too. But it doesn’t mean that every insurer has pulled out,” she said.
Budget For a Higher Premium but Shop Around
If you live in a high-risk area and insurers are pulling out, you can expect that if you can find coverage from a different provider, the premiums will be much higher than you’ve been paying, Musson warned.
However, when searching for a new provider, don’t give up if you can’t find someone with your first request. “Ask others around you what they’re doing and who they’re going with. Get quotes from every reputable insurer in your state.”
Consider Upgrades to Your Home
If an insurance provider turns you down, ask if there’s anything you can do to your house to make it insurable, Musson said.
“The insurance company may have completely pulled out of the area, but maybe they haven’t. If they’re still able to write policies in your neighborhood, you may be able to make home improvements that make your home insurable.”
Gambill agreed, pointing out that many consumers, herself included, have found themselves in a situation where a complete re-roof was needed before any insurer would agree to provide insurance.
“Needing a new roof is a big expense, but it really shouldn’t necessarily be a surprise especially when it comes to insurance. I always counsel my clients to understand their roof’s remaining life span and budget for expenses for a few years before the end of its life expectancy to avoid any surprises.”
While less costly to replace, other home components are also scrutinized, such as electrical panels to ensure that known faulty brands are not in use and that there is no presence of cast iron plumbing, she said.
Obtain Inspections
Even if your insurer suggests you need to do more work to your home before they’ll insure you, consider getting inspections, Gambill said, such as those to verify the condition of the roof, electrical and plumbing systems (known as a four-point inspection) depending on the age of the home.
“They will also want to obtain a wind mitigation inspection to verify any wind mitigation protections such as impact windows or shutters or a new roof to ensure they are receiving premium credits,” she said.
Look To Your State’s High-Risk Pool
Be patient with the process. Gambill pointed out that “[the] homeowner’s insurance marketplace is in turmoil across the country, and that is particularly true in Florida where there has been a constant churn of regional and untested insurance companies entering and leaving the state since Hurricane Andrew in 1992.”
If you can’t find insurance on the competitive marketplace, you may be able to get a plan from your state’s high-risk pool, Musson said. For example, California FAIR Plan is an option when you can’t get insurance elsewhere.
Ask Questions
Don’t be afraid to ask questions, Gambill said. “Your agent should take the time to carefully explain the policy coverage, limitations and deductibles that have been quoted.”
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