Homeowner’s Insurance: Will I Be Able to Get It?

For the most part, you probably won’t have trouble finding quality, homeowner’s insurance if you do enough shopping around. However, there are plenty of individuals who find that many companies aren’t willing to insure their homes. And sometimes even state-regulated insurers won’t either.

There are some basic things to keep in mind as you look for a new home. After all, you likely will not want to live in a place that is not protected by insurance or perhaps you’re not willing to pay outrageously high insurance rates to make sure it’s protected. Some homes may take extra effort and/or money to insure, while others may just be a lost cause. Here’s what you should know ahead of time.

It’s probably not surprising that some homeowners in California pay a lot of insurance to cover natural perils like wildfires and earthquakes, while Floridians have to cope with floods, and Midwesterners, tornados. But did you know that if a flood is expected in an area at the time you are shopping for insurance, you probably won’t even qualify for insurance at all? There are probably a lot of other things you don’t know as well.

If you are eyeing a home (or already live in one) that’s close to a fault line, watch out. Insurance that covers earthquake damage is hard to find. There are special laws and companies in California that make such insurance more available, but by in large earthquake coverage is not easy to get and when you do get it, it will surely be very expensive. Not all state-regulated insurers (in the shared market) are even legally bound to provide coverage for earthquakes.

But this is not a bad thing – you don’t want insurance companies overextending themselves and pretending to have resources they just don’t have. Earthquakes can cause such catastrophic damage to so many houses, that an insurer simply can’t afford to provide coverage for everyone.

Floods are similar to earthquakes, in that they can cause devastating damage to countless numbers of homes. In fact, floods are the leading cause of natural disaster in the United States. This is why, typically, flood insurance must be bought separately from your basic homeowner’s insurance.

Hurricanes are another natural peril that you may not be able to get coverage for. The closer you live to the coast, the more of a risk your insurer will deem your home and thus you may find insurance is just not available.

There are other less obvious factors that will affect how likely it is you will be able to find good insurance, if any insurance at all. Make sure your home is safe and in good shape! Install a burglar alarm; make sure your smoke detector works. These small changes can make a big difference in the availability of insurance and the rates you pay. But all of your efforts amount to a hill of beans if you insist on living in a house that lies right over a fault line or right next to the water. Stay informed about what locations have the best availability of insurance – and availability will change – and only scout out the homes in those locations.

Also remember that private insurance companies can always turn you down, whereas the companies that practice in the shared market are often required to insure you (and the rates are usually less too). So investigate all your options before you give up.