Be in the Know

The future of Insuring a Coastal Home

With the recent intensity of these climate driven storms, it is no surprise that home insurance carriers are re-evaluating exposures. Coastal and especially flood prone areas are in the bullseye of that evaluation. Distance to the coastline and then your property’s elevation are the drivers.

Here is what you need to know to be prepared!

Policies written by home insurance companies are divided into 2 primary licensing classifications. Admitted – which are companies that file premium rates and underwriting guidelines with the State of Connecticut for approval. Once approved, the insurer must follow the identified underwriting guidelines and all changes to premium rates need the Insurance Commissioner’s approval.

And then Non-Admitted insurers, sometimes referred to as Excess and Surplus carriers. Non-Admitted insurers are really the last option in providing coverage if an Admitted Insurer is not available. Premium rates and policy forms are not under any administrative control by the Insurance Department.

If you have an admitted insurer like Chubb or PURE that is a good position to be in, because of the state insurance department oversight.

What you need to Know

Driven by intense storms Admitted Insurers are pulling away from the coastline to distance their exposure to wind, and secondly to the changing flood zones and exposure to water surge.

Here are a few thoughts that may help you maintain affordable insurance for the long haul:

1) Think Catastrophic – Submit only large claims that are beyond your economic ability. A claim could give your insurer a reason to raise rates, change coverage, or even non-renew your policy. Non-renewal of coverage leaves you exposed to significant premium cost increases.

2) Build in Prevention –

a. Impact glass for windows

b. Reinforced garage doors

c. Roof replacement early rather than later

d. Water main shut off device to control a water leak inside the home (here is a link to Chubb’s suggestions Water Coverage | Chubb )

3) Organize Maintenance with electronic calendar reminders

a. Clean the gutters

b. Secure the downspouts and leaders

c. Annually test your generator

d. Trim overhanging trees away from the house

It is no surprise that insurance premium rates for homes are rising. Areas that are coastal or are being re-designated as in flood zones are even more exposed to those premium increases. Taking a different view on when to submit a claim, adding prevention tools, and finally taking a more proactive effort on maintenance can only serve to protect your insurance and premiums long term.

If you have any questions on your home insurance drop Kyle an email at kshepard@shepardinsgrp.com or call 203.698.9342 to get more details.