Changes to Homeowners Insurance – What You Need to Know
If your home has any of the following characteristics, please pay attention to this post:
• Single Wall Construction
• Roof over 15 years in age
• Tall trees near home
• Unpermitted areas
• Lack of hurricane clips/ties
• Lava Zone 2
Recent years have seen a surge in claims from natural disasters. Insurers are now paying higher re-insurance premiums to spread that risk, which has triggered three major trends:
1. Withdrawal from certain markets – Some carriers are exiting high risk regions.
2. Rate hikes – Premiums are rising across the board.
3. Coverage limits – Insurers are tightening eligibility for specific homes.
The last point is the focus of this post. If you receive a letter from your insurer asking questions about your home or asking that you change/correct a matter on the home, we recommend responding to it promptly. We are hearing reports of insurers canceling policies in the case of inaction.
You might think of simply switching companies, which may be a good option. That said, your current carrier may be your best, and in some cases, only choice. This is also important if you have a mortgage on the home since the terms of your mortgage likely read that if your insurance is canceled, the mortgage company has a right to place insurance for you, at your cost, and they’re not required to pick an inexpensive option.
If, like us, you’ve thought of your homeowner’s policy as an automatic renewal it may be that, but in this current environment we wanted you to be aware of the changes we are seeing in the way insurance companies are handling home insurance.
