Grant Wilson was a week from closing escrow on a home near Santa Barbara, California, when his mortgage lender asked for proof of homeowners insurance. He called his auto insurer, thinking his new home could be easily added.
His agent quickly dispelled the notion. Wilson’s new home had previously sustained some wildfire damage; other homes in his neighborhood had burned down. His insurer would not write a policy because the risk was too high.
Wilson’s story is not so unusual. Wildfires, tornadoes, hailstorms, hurricanes, and freezes affect many states, and more homeowners nationwide are struggling to secure coverage. In fact, 2 of California’s biggest insurers recently stopped writing new homeowners policies in the state, citing skyrocketing construction costs and the high probability of natural disasters.
As extreme weather becomes more common and more severe, insurers are reassessing how much risk they want to take on. Talk to your insurance agent to understand what natural-disaster coverage you have and whether it’s enough.