Sometime just asking the question can hurt you–Changes in the Insurance Industry

by arlene on April 1, 2016

After the spring rains came additional things falling: trees. This is a good time to re-evaluate your insurance, and be sure that you know what would be your coverage in case a tree fell either on your property, or one of your trees fell on your neighbor.  Do you have a deductible that is so high that you might only use your insurance in a truly catastrophic situation? That’s a reasonable approach, so long as it’s on purpose. And know that there can be consequences of simply making inquiries, even if no claim is paid out.

Over the past couple years two major carriers, State Farm and CSAA, have been unwilling to offer new policies on homes that have *any* knob and tube wiring. This is a zero-tolerance definition. State Farm also now requires seismic retrofitting for them to write any new policies. For some time most carriers have been unwilling to cover homes in designated Wildfire zones. So if those were not significant enough limitations, now Allstate has made some curious determinations about where those Wildfire zones are. Up on Grizzly Peak, or on the other side of the ridge in Montclair, you can understand their concern. But two blocks above above College Avenue? That’s a curious definition I recently encountered! And then I learned that State Farm has excluded entire zip codes, on the grounds that they have too much exposure in those areas. So they will write no new policies in Piedmont, Albany, Elmwood or Claremont. And heaven help you if you have any claim related to water damage. For most carriers “water damage” is a huge red flag, and may make it difficult for you to get coverage from any standard carrier. One of my buyers had an especially frustrating experience when he discovered that simply having called his carrier about damage from an irrigation system was enough to make him ineligible as an insured, even though his carrier had paid no claim. So before the next storm you might have a *philosophical* conversation with your carrier, before you have an actual incident to discuss, and make sure you understand your options, and at what deductible amount.

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