Welcome to the final chapter of our insurance series tailored for Homeowners Associations (HOAs) and homeowners. In Part 1, Understanding Your HOA's Master Insurance Policy, we examined the essential elements of what your HOA's insurance covers, focusing primarily on common areas and external structures. Part 2, Top 10 Tips for Managing Rising Insurance Premiums for HOAs, provided methods to help manage and potentially lower escalating insurance costs for the HOA.
Last week, State Farm, California's largest homeowners insurance provider, announced that approximately 30,000 homeowner's policies would not be renewed, just nine months after announcing it would not issue new home policies in California[1]. Earlier this year, Texas-based American National Group stopped offering homeowners' insurance in California, Arkansas, Colorado, Louisiana, Minnesota, Oklahoma, South Dakota, and Washington[2]. In Florida, three major insurers, Farmers Insurance, Bankers, Insurance, and Lexington Insurance have withdrawn from the state[3], while AAA[3], Progressive[4], Nationwide[5], and will not be renewing over 100,000 homeowners policies.
This concluding segment tackles a critical and pressing issue: what homeowners should do if they find themselves without insurance coverage due to non-renewal or cancellation by their insurer. It is vital to understand that while the HOA may insure the exterior and common areas, individual homeowners must secure their policies for the interiors of their homes and personal belongings.
Here are the 10 essential steps to secure homeowners insurance after coverage loss.
Keep detailed records of your home's condition and all communications with insurance companies. This documentation will be crucial when securing new coverage.
2. Understand the Reason for Cancellation/Non-Renewal
Identify why your previous insurer canceled or chose not to renew your policy. Ask if there are any specific actions you could take to retain your coverage. Knowing the specific reasons will aid you in addressing these issues when applying for new insurance.
3. Consider Filing a Complaint with Your State
If you think your non-renewal was unfair, consider filing a complaint.
California: File a complaint with the California Department of Insurance[6].
Florida: In Florida there is no longer a "Department of Insurance." In 2003, the Florida Department of Insurance was merged with the Department of Treasury, State Fire Marshal, and the Department of Banking and Finance into the Department of Financial Services (DFS). Under DFS, you can file a complaint under the Division of Consumer Services where insurance complaints are handled[7].
Texas: File a complaint with the Texas Department of Insurance[8].
4. Act Quickly to Find New Coverage
Search for a new insurance policy without delay. The longer you remain uninsured, the more difficult it can become to secure coverage.
5. Educate Yourself About Insurance
Deepen your understanding of the factors influencing insurance decisions. This knowledge will help you navigate the insurance market effectively.
6. Make Home Improvements:
If your property is considered high-risk, implement safety upgrades or make your home more resistant to disasters. Keeping up with home improvements could make you more eligible for insurance.
7. Use an Independent Insurance Agent
Consult an independent agent who can assist in navigating the insurance landscape, especially if you have a non-standard insurance history.
8. Advocate for Legislative Support
Work with local and state government officials to support legislation that could lead to more favorable insurance conditions for homeowners. Advocacy can be a powerful tool in shaping policies that affect insurance availability and cost.
9. Check for State-Specific Rights and Programs
Investigate if your state offers special protections or assistance programs for individuals who have lost their insurance coverage. For example the Fair Access to Insurance Requirements (FAIR) Plan is a last-resort insurance option for homeowners in over 30 states.
California: Consider the California FAIR Plan, which offers basic insurance for homeowners unable to secure coverage through traditional means[9]. The FAIR Plan website's broker finder tool assists you in finding a broker in your area[10].
Florida: As Florida's version of the FAIR Plan, Citizens Property Insurance Corporation acts as the state's last-resort insurer, essential for areas frequently affected by severe weather[11].
Texas: The Texas FAIR Plan Association (TFPA), managed by the Texas Windstorm Insurance Association (TWIA)[12, 13]. It isn't a permanent solution for home insurance so their policies are in one-year terms, and the plan requires applicants to reapply for coverage in the voluntary market every two years.
10. Stay Positive and Persistent
Although securing new insurance after losing coverage can be challenging, a positive and determined approach will enhance your chances of obtaining a new policy. Remain proactive and well-informed throughout the process.
Final Thoughts
As we wrap up our series on insurance for HOAs and homeowners, it becomes apparent that a swift and thoughtful strategy is essential after losing insurance coverage. Identifying the reasons for your policy's cancellation, seeking new coverage promptly, and ensuring your home meets current safety standards are crucial steps toward regaining your protective safety net. Let this guide serve as a key tool to take the necessary steps to protect your property and secure your peace of mind amidst the constantly changing conditions of insurance policies.
Footnotes and References
- Redell, Bob and Hernandez, Jodi. State Farm indicates where homeowner's policies won't be renewed in San Diego: Report. NBC San Diego. 4/10/2024.
- Sellers, Matthew. Tens of thousands hit as yet another insurer looks to leave state. Insurance Business. 2/29/2024.
- Crowley, Kinsey. Another company avoids risky Florida home insurance policies: Here's what caused the crisis. USA Today. 7/19/2023.
- Murphy, Rachel. More bad news for Florida homeowners' insurance market. Another company to stop renewing.. Wink News. 10/1/2023.
- Petit, Rebecca. Next steps if Nationwide notifies you of nonrenewal of Florida homeowners insurance. ABC News. 12/5/2023.
- California Department of Insurance. File a Complaint.
- Florida Department of Financial Services. The Division of Consumer Services. File an Insurance Complaint.
- Texas Department of Insurance (TDI). How to get help with a homeowners or renters insurance complaint.
- California Department of Insurance. California FAIR Plan.
- California FAIR Plan Property Insurance. Find a Broker.
- Florida's Citizens Property Insurance Corporation.
- Texas FAIR Plan Association (TFPA).
- Texas Windstorm Insurance Association (TWIA).
