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How to insure a “hard to insure” property

How to insure a “hard to insure” property

By Ruth Stroup

Carrier Options are the key:

  • Preferred Carriers
  • Specialty Carriers
  • Surplus Lines Carriers
  • California FAIR Plan

Whether you’re shopping for a new home, or facing a notice of non-renewal, you may find yourself in a situation where it’s difficult to get a new insurance policy.

Common situations that require a special approach to insurance include:

  • Prior Claims – your claims or claims associated with the property
  • Property condition –roofing, siding, plumbing, & electrical systems
  • Roof Type –wood roofs and flat roof
  • Age of home – limits based on year of construction
  • Vacant property –when the owner moves away or passes away
  • Short term rentals – vacation rentals and AirBnB
  • Properties with a second residence (ADU) on the parcel, not a duplex.
  • Renovation/Remodeling – especially large-scale remodeling projects
  • Slope –not something you can change; you’ll need a company that accepts the location
  • Excess vegetation – trees and vines are the most common issues
  • Properties on a street without dual egress – dead end street or cul de sac
  • Wildfire zone – properties with high propensity for wildfire
  • Properties not owned by a “person” – example: LLC, estate, irrevocable trust

Understanding the insurance market will make shopping for insurance a bit easier.

  • Preferred carriers: these companies are household names because they advertise.  Policies can be purchased in a variety of ways including a local agent or agency, an 800#, or even the internet.  Many of these companies provide a multi-line discount and encourage you to “bundle”.   Most policies are issued this way, and if you qualify, this is usually also the best value for the consumer.
  • Specialty carriers: these companies are usually offered by insurance brokers.  They provide coverage for special situations.  Each company has different areas of specialization. Things like mobile homes and income properties including vacation rentals.
  • Surplus Lines carriers: these companies provide insurance only when you can’t get a policy from a more traditional carrier.   There’s no consumer direct option to purchase these policies, you’ll need a broker.
  • California FAIR plan: this is the “carrier of last resort” designed to make sure there’s a market for insurance regardless of location.  The CA FAIR plan requires properties to be in good condition.  Some preferred carriers now partner with the FAIR plan to offer coverage in wildfire zones.

One of things I appreciate about being a Farmers agent is that we can offer policies on all four platforms.  It gives me the flexibility help people in a wide variety of situations.  If you have questions about your specific situation, please email rstroup@farmersagent.com

 

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Ruth Stroup Insurance Agency
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