Here’s what you should do if your insurance company drops your fire (or flood) coverage

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Los Angeles County is currently suffering apocalyptic scenes deadly, uncontained wildfires. Unfortunately, insurance doesn’t work like a gas or electric company; even in the face of a catastrophe, insurers are not obliged to service your home. Instead, these companies can choose which properties to insure based on their risk assessment models. This has become selective reporting more and more frequently in areas prone to natural disasters, especially in regions with an increased risk of forest fires or floods. Although receiving a cancellation or non-renewal notice can be stressful, there are a few steps you should take before accepting Compulsory insurance. Here’s what you can do.

Make sure you read your notice carefully. Document both the date you received the notice and the effective date of the termination/non-renewal. Identify the specific reason(s) for the change in coverage and then determine whether the notice meets state notice requirements.

Contact your insurance company from here:

• Request a detailed written explanation if it is not provided.

• Ask about specific risks or issues that led to their decision.

• Ask if improvements to the property might change your decision.

As always, keep all communications in writing for your records. And make sure you understand and fight for your rights here. You may be eligible for a grace period, or your state may require insurers to help you find new coverage. If they don’t, document any violations of state insurance laws.

Another place to start is the insurance requirements of your mortgage agreement. Contact your lender to discuss the situation and, if necessary, request additional time to secure new coverage.

State insurance options

If your insurance coverage concerns you, check out these national and state insurance programs:

California FAIR Plan

New York FAIR Plan

Property insurance for Florida residents

• Coverage as a last resort for Florida residents

• It must be proven that it is not possible to find private insurance

• Special valuation risks in the event of major catastrophes

Texas FAIR Plan

• Basic coverage for qualified properties

• Available after two rejections on the private market

• Requires adherence to property maintenance compliance

National Flood Insurance Program (NFIP)

• Building insurance up to $250,000

• Content coverage up to $100,000

• Available in participating communities

• Covers direct physical flood damage

• Property must be present NFIP participant community

• The insurance coverage comes into effect after a waiting period of 30 days

• Must meet minimum flood plain management standards

• Annual premium based on flood zone and coverage

You can also look into private flood insurance, which often offers shorter waiting periods – unfortunately at a higher cost. Whenever you want to purchase insurance, you can look into policy bundling – combining multiple policies to get better rates. In this case, do your research to work with insurers who specialize in high-risk properties.

What else you should do if you live in a high-risk area

The risk of losing your physical home makes your community and the people in it all the more important. Join local disaster preparedness groups and participate in local emergency planning. You could join neighborhood insurance pools, community-based catastrophic insurance, and other types of DIY safety nets, or start building them if insurance companies let you down.

When it comes to your own finances, natural disasters are one of the main reasons for maintaining a robust balance sheet Emergency fund. Remember that while losing insurance coverage can be worrying, there are usually several options available. The key is to act quickly, understand your rights and consider all possible alternatives before accepting more expensive or more limited insurance options.

If you would like to help the tens of thousands who fled their homes in California this week, you can visit us redcross.org, Donate here to support United Way’s effortsor the California Community Foundation The Wildfire Recovery Fund can be found here.