Some home insurance ending coverage for major disasters

[Innisfree]

Better check for yearly changes in the terms of your policies. This isn’t a new phenomenon, but it sounds like it’s increasing. Hardly surprising, but something to be aware of.

Gifted article:

Quote

In the aftermath of extreme weather events, major insurers are increasingly no longer offering coverage that homeowners in areas vulnerable to those disasters need most.

At least five large U.S. property insurers — including Allstate, American Family, Nationwide, Erie Insurance Group and Berkshire Hathaway — have told regulators that extreme weather patterns caused by climate change have led them to stop writing coverages in some regions, exclude protections from various weather events and raise monthly premiums and deductibles.

Major insurers say they will cut out damage caused by hurricanes, wind and hail from policies underwriting property along coastlines and in wildfire country, according to a voluntary survey conducted by the National Association of Insurance Commissioners, a group of state officials who regulate rates and policy forms.

https://wapo.st/45T2qGa

Edited September 3, 2023 by Innisfree

[Ditto]

Thank you for the heads up and the article.  Ugh.  Just one more thing to worry about.   What in the world happens when people can't get insurance?  I mean the mortgage co requires it if you carry a mortgage.   And whether you have a mortgage or not, if something happens and you have no insurance and don't have the means to rebuild out of pocket (many of us, including me, couldn't afford it),  then what?  Just lose everything and walk away from your destroyed home?

[Melissa in Australia]

Yes, that is what is starting to happen here.. Half a small village burnt down in the black summer bushfires near me. Only a hand full of houses were allowed to be rebuilt between insurance issues and councle rebuild approval issues. People now have worthless land that they can't build on and can't sell. Some are camping on their land, they have been issued eviction notices for illegal camping. 

Also happens with floods.. Many insurance companies don't cover floods

Edited September 3, 2023 by Melissa in Australia

[Corraleno]

I had to search far and wide to find ANY insurer that would cover my father's house in FL and the cheapest one I found charges nearly $8,000/yr for coverage on a very modest 2 BR, 1-story house — and there is a separate $7,000 deductible for any hurricane-related damage. And as bad as that is, at least it's better than last year, when the only company I could find charged $12,000 for coverage! My dad said that most of the older people in the area simply can't afford insurance anymore, so they just have to take their chances and hope nothing happens, because if their homes are destroyed they will be homeless and financially ruined.

Edited September 3, 2023 by Corraleno

[prairiewindmomma]

California is a cautionary tale. After the year of the Paradise fires, California precluded insurance companies from raising rates or dropping anyone for a year. As soon as that year expired, a lot of companies left the market altogether. 
 

We should want to pay risk based assessments lest the insurance companies leave everyone without the ability to purchase insurance. Companies on average have paid out about 1.50 per 1.00 in premium for the last four years straight across the board. You can’t run a business like that. People who live in hurricane territory or urban wildlife interfaces are potentially ruining it for the rest of us. IMO, low lying areas are going to devalue/market correct in price, and a lot of the rest of us are going to be getting metal roofs with high wind tiedowns, fire resistant landscaping, and concrete siding to lower our premiums. 

[Innisfree]

People need to start being very careful about assessing risks when they buy property. And, like @prairiewindmomma said, anyone building or remodeling needs to take into account every possible scenario.

We bought a house last year. I looked at everything I could find: flood zones in future decades, fire risk. It’s well out of coastal hurricane zones, though the remnants of storms do sweep way inland sometimes. On all those measures, the house looks safe for the foreseeable future.

But then came the Canadian fires this year, in areas that haven’t had much risk of wildfires in the past. Small ones, sure; but those of us in moist temperate regions aren’t used to worrying about large scale wildfires, because mostly they just don’t happen. Except now they can. Enough years of drought can turn even our moist woodlands into places where wildfires are a real threat. It happened in the Smokies a few years ago. So suddenly I’m looking at the lush, forested mountains within sight of our house with new eyes, and wishing the last homeowners hadn’t just put on a new roof, because a metal one might be better.

[Melissa in Australia]

https://www.abc.net.au/news/2023-09-12/thousands-australian-homes-becoming-uninsurable-rising-costs-730/102833374

News article about a house that was not even flooded but yard was in Sydney. insurance has gone from 2k a year to 33k a year

[Faith-manor]

We are getting hit with it. Northern Alabama, 1250 ft elevation, no flood zone, and thought the valley get tornados, but not really much up on the mountain. When we applied for our current insurance, they told us the house was super low risk so the premium was very reasonable. Now that insurance company is pulling out of the whole state because of the the gulf coast. I am very scared of what our premium will be, and even more scared that more insurers will pull out of the state, and we won't be able to get insurance. I am very concerned.