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When shopping for a homeowners insurance policy, factors such as location, home value, coverage levels and discounts will determine your quoted homeowners insurance price. In this review, we’ll discuss these factors and help you find the best home insurance policy for your home. For the home insurance pricing in this article, we used a home insurance report from the National Association of Insurance Commissioners (NAIC) that was published in January 2021.

MarketWatch has highlighted these products and services because we think readers will find them useful. This content is independent of the MarketWatch newsroom and we may receive a commission if you buy products through links in this article.

If you’re considering purchasing homeowners insurance, it’s important to understand what your policy will cover. Each homeowners insurance policy will look slightly different depending on the coverage you choose, the add-ons you include in your plan, and where you live. However, most policies will cover your home’s structure, personal property, living expenses if you’re displaced from your home and liability protection if there’s an accident in your home.

Your homeowners insurance protects you from financial devastation should your home be damaged or destroyed. Finding out that your homeowners insurance is canceled may be stressful and frightening. Understanding the types of home insurance cancellations, what causes them and what you can do about each scenario might help you feel more confident in managing your homeowners insurance.

Types of homeowners insurance terminations

There are different types of homeowners insurance terminations. Some have easy solutions, while others might mean you need to find a new insurance company. These types of cancellations apply to condo and renters insurance as well. The three main types are:

Lapses

A homeowners insurance lapse may be the simplest type of issue to fix if you handle it quickly. A policy typically lapses if you failed to make your insurance payments. Having a coverage lapse could put you at risk of having no insurance if your home is broken into or disaster strikes.

Most home insurance companies offer you a grace period in which you can make your payment to reinstate your coverage. If you are responsible for making your payment, paying your premium right away is the fastest way to resolve a lapse issue, as long as you are still within the grace period. If your mortgage company pays your insurance from an escrow account, you may need to call your mortgage lender and request that they release the payment immediately.

Nonrenewals

A nonrenewal letter notifies you that your policy will not renew automatically when your coverage period ends. Nonrenewals can be initiated by you or your carrier. You may decide to initiate a nonrenewal if you have gotten quotes from other companies and decided to switch insurance carriers at your renewal date. Your insurance company may decide to not renew your policy for several reasons, including your claims history and the condition of your home. If you no longer fit into the company’s underwriting profile for any number of reasons, your policy may be nonrenewed.

In other cases, your insurance carrier may no longer operate in your area or might withdraw coverage after a series of costly claim scenarios such as a major flood or other natural disasters. Regardless of the reason, insurance companies are required to notify you in writing if they decide not to renew your homeowners insurance. Most states require companies to give you at least 30 days advance notice, to give you enough time to shop around and find an alternative.

Cancellations

As with nonrenewals, both you or your insurance company may initiate a cancellation. Cancellations differ from nonrenewals in that the last day of coverage does not line up with your policy’s renewal date. For example, if your homeowners insurance policy starts and ends on January 1 every year, a nonrenewal notice will only ever cancel your policy on January 1. A cancellation notice can stop coverage anywhere within the policy term.

Insurance companies may choose to cancel your policy for a number of reasons. If you misrepresented yourself or omitted information during the application process, for example, your policy may be canceled, even if you have only recently purchased your home and policy.

One of the most common reasons that insurance companies cancel home insurance policies is related to inspections. Insurance companies generally do exterior inspections of homes when new policies are written, and on occasion after that. For example, if your roof is in poor condition, your home has structural issues or your company discovers that you own an ineligible dog breed, you may receive a cancellation notice requiring you to correct the issues or risk your policy being canceled altogether.

Insurance companies are required by state laws to send you a written notice of cancellation. Typically, companies must give you at least 30 days of notice. This gives you time to discuss the cancellation with your carrier, correct any concerns so that the company will continue coverage or find a new home insurance company.

You can also initiate a home insurance cancellation. Perhaps you found a cheaper company or you have sold your home. You can call your carrier to request that your policy be canceled on a certain date. You may need to sign a cancellation form to confirm your request.

What to do if your homeowners insurance is canceled

Depending on the type of notice you receive, there are steps you can take to remedy the problem. If you receive a homeowners insurance lapse letter, contact your insurance carrier right away and make your past-due payments. Once you have reinstated your policy, you may also need to let your mortgage company know, since home insurance is required by mortgage lenders. Your lender may purchase a new home insurance policy on your behalf and expect you to pay for it, even if it is far more expensive than your current lapsed policy and does not include any coverage for your personal property. It is important to let your lender know if your coverage has been reinstated, so that it can remove this force-placed coverage. If you receive a lapse letter and your insurance is paid through an escrow account, you may want to contact your mortgage carrier and ask them to send the payment to your insurance company.

If you receive a nonrenewal notice, your first step is to find out why your policy is being terminated. The letter you receive will likely include an explanation or you could call your carrier to get more information. Depending on the situation, you may be able to make changes to your home or policy that will satisfy the insurance company and convince them to keep your coverage.

Similarly to a nonrenewal, if you receive a cancellation notice, talking to your insurance company is a good first step. If your homeowners insurance was canceled after an inspection, you may be able to make the necessary changes to your home, like repairing a deteriorated roof. This could be enough for the company to rescind the cancellation and keep your coverage.

If you are not able to convince your insurance company to keep your policy, it may be harder to find coverage, especially if you have numerous claims or your home is in poor condition. If you are having trouble finding affordable home insurance after a cancellation, check with your state’s insurance commissioner. They may provide a list of carriers who are tasked with providing coverage for harder-to-insure homeowners.

Frequently asked questions

Why is my homeowners insurance being canceled?

There are many reasons why your home insurance could be canceled. You will typically receive a letter with an explanation, giving you a specified amount of time before your coverage ends. Your coverage may have lapsed for nonpayment, your insurance company may decide not to renew your policy due to claims or your company may have discovered issues during your inspection, among other reasons.

Can I contest a home insurance cancellation?

You may be able to contest a cancellation, depending on the situation. If you have an agent, they may be able to work directly with an underwriter to come to a compromise, or you could call your company directly. If you have filed numerous claims, for example, you may be asked to increase your deductible or remove a certain coverage in exchange for the company keeping your policy. However, it may be a good idea to get quotes from other companies as a backup, so that you are not left scrambling to find coverage in a short period of time if your negotiations fail.

4,000 house fires are caused by wood stoves each year, according to Environmental Protection Agency (EPA) estimates. If you use a wood stove each winter to heat your home, it is possible you could be paying more for homeowners insurance than your neighbors who only use an HVAC system. When it comes to heating sources in your home, it is important to understand the risks associated and what insurance considerations should be kept top of mind.

Does homeowners insurance cover wood stoves?

The EPA estimates that approximately 10.1 million wood stoves are in operation across the U.S, and that 65% of all wood stoves are old, inefficient and possibly dangerous, due to leaking fumes and confined fires within chimneys and flues. Because of this risk, homeowners insurance companies may adjust rates accordingly for anyone using a wood stove as a major source of heat.

Having a wood stove does not always disqualify you for coverage with most providers. However, it is very likely your provider will want to verify it is properly installed. Fortunately, this process may be as easy as taking a picture of your wood stove to ensure your approval for a policy is not delayed. Insurance companies may want to verify the following:

• Your wood stove’s make and model
• The stove’s connection to your home’s chimney
• The proper amount of fire guards are in place (such as a fire safety rug)

If it cannot verify any of the above information in a photo, or if a more comprehensive evaluation is required, your provider may require an inspector to come to your home and inspect your wood stove.

Requirements for wood-burning stoves

If the wood stove is old and has been in place for a while, your provider may have some requirements to fulfill. Having the wood stove inspected by a certified technician to ensure it complies with local code regulations may be a part of that process. Fire codes frequently change, and the old stove may not meet today’s standards.

If you are planning on putting a wood stove in your home, it is generally advised to get a licensed contractor to install it for you. When not properly installed, wood stoves put houses at a severe risk of fire and extensive damage. Smoke can spread quickly throughout the house and lead to carbon monoxide poisoning, and chimney fires can rapidly escalate to whole house fires. For context, the EPA estimated that house fires accounted for 400 deaths, 1,520 injuries, as well as billions of dollars in damages in 2011 alone.

An inspection is of great importance because if it is determined during a claim that a house fire was caused by an improperly installed wood stove, you might not qualify to receive a payout. In a worst-case scenario in which your house is burned down, this could have disastrous financial impact.

Do wood stoves increase homeowners insurance rates?

In many cases, the added risk of a wood stove could increase a homeowners insurance premium. This is because the likelihood of your home being damaged by a fire is significantly increased with the presence of a wood stove.

Compared to other types of heating methods, wood stoves are considerably more dangerous. For example, a gas and electric fireplace do not have:

• Smoke
• Ash
• Creosote/soot buildup
• Backdrafts

Furthermore, to start gas or electric fireplaces does not require any matches or fire starters, which makes them even safer.

Wood stoves are dramatically different in how they are activated. To start a wood stove, you must first establish or enable a draft within the fireplace to prevent smoke build-up. Once the draft is started, kindling is burned beneath larger stacks of wood with the wood stove’s door open. This step alone presents two risks: popping embers onto the floor, and smoke accumulation inside the home.

Aside from the initial risks involved in starting a wood stove, they present a long-term risk, too: the accumulation of creosote within the chimney, which is both cancerous and highly flammable. Over time creosote can catch fire within the chimney, putting the whole house at risk unless a steel liner is properly installed.

Overall, there are multiple risks involved with wood stoves compared to other home heating methods.

Wood stoves versus pellet stoves

Both a wood stove and a pellet stove burn wood, but a pellet stove burns smaller (manmade) portions of wood compared to a wood stove. Typically, pellet stoves require less ‘tending to’ than wood stoves. As pellets are burned, an onboard computer system detects when more pellets are needed and automatically adds them to the fire. Consequently, with a pellet stove, it’s easier to control how hot you want your pellet stove to get, making it more heat efficient than most wood stoves.

Both a pellet and a wood burning stove require a trained professional to install them, as both need to be properly sealed and connected to a chimney or vent. However, a wood stove requires a chimney whereas a pellet stove can be connected to either a chimney or vent. Therefore, with a pellet stove there is more flexibility when it comes to placement. As long as it has the proper amount of clearance and ventilation around it, it can be placed virtually anywhere in your home. Your woodstove, however, must go wherever your chimney is. The impact to your insurance with a pellet stove will likely vary by provider, so when setting up a homeowners policy, be sure to discuss the implications or requirements involved.

Wood stoves and pellet stoves have different risks and other practical considerations to keep in mind:

Wood stoves

Pros:

• Wood is cheaper than pellets
• Does not need an electrical power source
• Lasts for years
• Low operating costs if near locally sourced wood supply

Cons:

• Less efficient than a pellet stove
• Requires regular maintenance throughout the year if it is your primary heating source
• Considered more dangerous to operate than a pellet stove
• Woodpile in or near house may attract pests (such as hiding rodents or termites) which could cause damage to your home
• More expensive to buy and install than a pellet stove

Pellet stoves

Pros:

• Heat is easier to control and is more efficient
• It is cheaper to operate and maintain
• Installation is cheap and fast
• Safer to operate than a wood stove
• Better for the environment

Cons:

• Requires an electrical source
• Does not last as long as a wood stove
• Pellets must be kept indoors away from pests
• Pellets can be harder to source than traditional firewood

TAMPA, Fla., May 21, 2021 (GLOBE NEWSWIRE) — TypTap Insurance Group, Inc. (TypTap), a rapidly growing, technology-driven insurance company and a subsidiary of HCI Group, Inc. (NYSE: HCI), has received regulatory approval to write homeowners insurance in Massachusetts.

The approval is part of TypTap’s planned nationwide expansion announced in August of 2020. TypTap has received approvals in 13 states outside of Florida.

About TypTap Insurance Group, Inc.
Funded by HCI Group, Inc. (NYSE:HCI), TypTap was founded in 2016 with the mission of utilizing technology, data, and data analytics to simplify the insurance experience. TypTap is a rapidly growing, technology-driven insurance company that provides homeowners and flood insurance in Florida with plans to expand its operations nationwide. TypTap uses its innovative, proprietary, online platform to quote and bind policies quickly and efficiently. It also has powerful algorithms, enabled by artificial intelligence, designed to identify policies that deliver profitable results while mitigating risk.

HCI Group, Inc. is an InsurTech company with operations in insurance, software development and real estate. HCI’s leading insurance operation, TypTap Insurance Company, is a rapidly growing, technology-driven insurance company that is expanding nationwide to provide homeowners and flood insurance. TypTap’s operations are powered in large part by insurance-related information technology developed by HCI’s software subsidiary, Exzeo USA, Inc. HCI’s largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., provides homeowners’ insurance primarily in Florida. HCI’s real estate subsidiary, Greenleaf Capital, LLC, owns and operates multiple properties in Florida, including office buildings, retail centers and marinas.

The company’s common shares trade on the New York Stock Exchange under the ticker symbol “HCI” and are included in the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc. regularly publishes financial and other information in the Investor Information section of the company’s website. For more information about HCI Group and its subsidiaries, visit www.hcigroup.com.

TypTap Company Contact:
Kevin Mitchell, President
TypTap Insurance Company
Tel (813) 405-3603
kmitchell@typtap.com   

TypTap Media Contact:
Jordan Schmidt, Managing Director
Gateway Group
Tel (949) 386-6332
TypTap@gatewayir.com

HCI Company Contact:
Rachel Swansiger, Esq.
HCI Group, Inc.
Tel (813) 405-3206
rswansiger@hcigroup.com

HCI Investor Relations Contact:
Matt Glover
Gateway Group
Tel (949) 574-3860
HCI@gatewayir.com

Owning a home can get expensive fast. In addition to your mortgage, you’ll have to pay property taxes and utility bills — and, to protect that substantial investment, 

homeowners insurance as well. But there are ways to save money on the latter. 

Most mortgage lenders require you to have homeowners insurance policies for as long as your mortgage term lasts. Even if you don’t have a mortgage, it’s still a good idea to protect the equity you’ve built in your home with insurance, experts say.

“Homeowners insurance covers your house, your belongings, and typically additional expenses for temporary housing if your house is damaged,” says Ken Gregg, CEO of Orion180, an insurance provider that specializes in homeowner insurance in the Southeast. “You want an insurance company that offers appropriate coverage limits to fit your needs and has the financial means to pay out claims.”

The good news is you don’t have to settle for an expensive rate; cheap homeowners insurance can include great coverage and customer service, too.

Quality homeowners insurance shouldn’t break the bank, so we compared homeowners insurance companies across the country to find ones that offer the lowest rates, good customer service, and high-quality coverage. 

Our Picks for Cheap Homeowners Insurance Companies of 2021

Company Overview

Nationwide

You may recognize Nationwide for its auto insurance policies, but you can also get home and life insurance with the company. Nationwide’s homeowners insurance covers things you’d expect, like the physical structure of the home and personal liability. It also offers a type of insurance that other companies often charge extra for: ordinance or law coverage.  

Because Nationwide offers policies in home, auto, and life, it’s possible to have multiple insurance policies with the same brand. It offers more discounts for homeowners insurance than most companies, up to eight, which makes it easier to keep your insurance premiums down. You can get homeowners insurance with Nationwide in every state except Alaska, Hawaii, Louisiana, and Massachusetts, as well as in Washington, D.C.

Average annual premium for a $250K dwelling: $1,042

Nationwide Coverage Types 

• Personal liability insurance
• Medical payments insurance
• Dwelling insurance
• Personal property insurance
• Other structures insurance
• Loss of use insurance
• Ordinance insurance
• Credit card coverage
• Identity theft insurance
• Replacement cost plus insurance
• Valuables plus coverage
• Water backup coverage
• Earthquake insurance
• Flood insurance
• Brand new belongings coverage
• Better roof replacement coverage

Nationwide Home Insurance Discounts

• Multi-policy discount: You can get a lower rate by bundling your home, auto, and life  insurance policy.
• Protective device discount: If your home is equipped with smoke detectors, fire alarms, or a security system, you can qualify for a discount.
• Claims-free discount: If you have no insurance claims on your record within the last several years, you may be able to get a discount on your premium.
• Home renovation discount: If you have recently renovated your home’s plumbing, heating, cooling, or electrical systems, you can get a lower rate.
• Roof rating discount: Nationwide policyholders can save money on their insurance policy based on their home’s roof age and surface type.
• New home discount: If you insure a home purchased in the last year, you might be able to qualify for a discount.
• Prior insurance discount: If you switch to Nationwide from a different insurance provider, you can qualify for a discount based on how long you were insured by the other carrier.
• Gated community discount: Homeowners who live in a gated community protected by security guards, residence cards, or key-lock devices can get a lower rate on their home insurance.

Progressive

Progressive offers many types of insurance, from auto and life to homeowners insurance. Progressive’s homeowners insurance, which is technically underwritten by American Strategic Insurance (ASI), has built a reputation for being relatively cheap. 

The company’s home insurance is fairly basic in terms of coverage and doesn’t offer many optional coverages, but there are numerous discounts that can help you get a cheaper rate. You may be able to save money if you are a new homebuyer, sign up for paperless statements, or have an alarm system. Progressive also has a user-friendly online tool that lets you compare its rates with other big competitors.

Average annual premium for a $250K dwelling: $1,026

Progressive Coverage Types

• Dwelling insurance
• Other structures coverage
• Personal liability 
• Personal property 
• Loss of use coverage
• Medical payments coverage
• Water back up coverage
• Personal injury coverage

Progressive Home Insurance Discounts

• Multi-policy discount: You can save an average of 5% when you bundle a home and auto insurance policy with Progressive.
• Safety and alarms discount: If your home is equipped with a security system, fire alarms, or automatic sprinklers, you qualify for a discount.
• Quote in advance discount: Getting a home insurance quote from Progressive at least 10 days before your policy starts can lower your rate.
• Pay in full discount: Policyholders who pay their annual premium upfront and in full can save some money on their insurance.
• New home discount: If you recently purchased a new home or switched from a Progressive renters insurance policy, you’ll get a lower rate.
• Newly built home discount: Newly built homes qualify for a discounted insurance rate.
• Digital documents discount: Policyholders who sign up for emailed statements can get a discount.

Honorable Mentions for Cheap Homeowners Insurance Companies of 2021

USAA

USAA sells all types of insurance policies to active and retired military members and their immediate families, including homeowners insurance. The company consistently scores high in various rankings, making it a competitive candidate for homeowners insurance if you’re eligible.

USAA’s average premium for homeowners insurance is already low, but you may still be able to save. For example, it offers discounts for bundling your home and auto coverage with USAA, having a home security system, and being claims-free.

Average annual premium for a $250K dwelling: $992

USAA Coverage Types

• Dwelling coverage
• Personal belongings
• Loss of Use
• Personal liability
• Other structures
• Home-sharing coverage
• Earthquake coverage

USAA Home Insurance Discounts

• Multi-policy discounts: If you bundle your home insurance with auto insurance from USAA, you can save 10% on your premiums
• Claims-free discount: Policyholders who don’t file any claims for five years will receive a 10% discount
• Protective device discount: USAA partners with ADT and offers discounts to homeowners who install their home security systems

Erie Insurance

Erie Insurance is the 11th largest insurer for homeowners policies, even though it’s available only in 12 states. It offers coverage in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and Washington D.C.

It offers the cheapest average premium on our list but doesn’t cut corners with its coverage. The company not only offers standard coverage for homeowners but also has a guaranteed replacement cost and optional add-ons to help personalize your coverage and meet your needs. 

There are many extra ways to save on your premium with Erie, such as multi-policy discounts, protective device discounts, and advanced quote discounts. If you prefer handling your insurance in person, Erie has over 13,000 agents nationwide. 

Average annual premium for a $250K dwelling: $897

Erie Coverage Types

• Dwelling coverage
• Personal property 
• Personal liability 
• Home business protection
• Extra coverage for valuables
• Water/sewage backup coverage
• Guaranteed replacement cost

Erie Home Insurance Discounts

• Protective devices discount: You can get a percentage off your premium for having a smoke alarm, burglary alarm, and automatic sprinkler system installed in a home.
• Advance quote: If you get a quote before your renewal deadline, you can qualify for this discount.
• Multi-policy discount: Erie offers multi-policy discounts from 16% to 25%, depending on your state.

Auto-Owners

Although Auto-Owners’ average premium is the highest on our list, it’s still below the national average. If you are looking for a reputable company and live in one of the 26 states it operates in, Auto-Owners could be a good option for you. Auto-Owners’ homeowners policies are fairly standard but highly customizable, with add-ons like jewelry and valuable items coverage, water backup coverage, and identity theft coverage.

You may also be able to lower your rate by taking advantage of the company’s discounts. It offers nearly 10 different discounts for homeowners insurance, from being a new homebuyer and having a green home to bundling your policies.

Average annual premium for a $250K dwelling: $1,165

Auto-Owners Coverage Types

• Dwelling coverage
• Personal property
• Personal liability
• Other structures coverage
• Medical payments
• Additional living expenses

Auto-Owners Home Insurance Discounts

• Multi-policy discount: You can get a discount for having multiple policies with Auto-Owners.
• Payment history: You may qualify for a discount if you have paid your premiums on time in the past 36 months.
• Green discount: Get this discount by enrolling in paperless billing and paying your policy premiums online.
• Protective devices discount: If you have protective devices, such as smoke detectors, deadbolt locks and fire extinguishers, you may be eligible for this discount.
• Paid-in-full discount: Save more if you pay your annual policy premium in full and on time.
• Mortgage-free discount: You can qualify for this discount if you don’t have a mortgage or line of credit on your home.
• Automatic backup generator discount: Get this discount if you have a qualifying backup generator.
• Advance quote: A discount is available for new applicants who request a premium quote prior to the effective date of the policy.

Cheap Homeowners Insurance Companies of 2021 Summary

How to Save Money on Homeowners Insurance

Finding ways to save money on homeowners insurance after investing in a home doesn’t have to be complicated, although some cost-reduction tactics may take a little more effort than others. Here are some actions you can take to help lower your homeowners insurance costs.

Get Multiple Homeowners Insurance Quotes

Just like auto insurance, you should never buy the first policy for which you get a quote. Shop around and compare rates from at least three to five companies to find an affordable policy that meets your needs. 

Insure Your Home for the Right Amount 

First things first: make sure you’re insuring your home based on how much it would cost to rebuild it, not its current market value. That is crucial in order to insure your house for the right amount. 

You can do this correctly by asking your home insurance agent or company to estimate your home’s replacement cost. Keep in mind the replacement cost of your home significantly affects your premium, so every few years, have your insurer reassess its replacement value to ensure you’re not over- or underpaying. 

Consider a Higher Deductible

Opting for a higher deductible will lower your monthly payments for homeowners insurance, but you should only go this route if you feel comfortable accepting a larger portion of financial responsibility. If there’s ever an accident or a catastrophic event involving your home, you’ll have to pay out more when you file a claim. 

Be Strategic With Your Claims

If you can, avoid filing claims for minor damages and incidents. Too many claims, especially in a short period of time, may set off warning signals to insurance companies and lead to higher rates down the road. Some insurance companies will even offer a discount if you haven’t filed a claim in the last three to five years.

Ask About Discounts

Discounts are an easy way to lower your insurance premiums, although they can vary significantly from company to company. Whichever company you choose for homeowners insurance, ask about their discounts and see if you qualify for any. Many companies are willing to give you more than one discount, especially if you have multiple policies with the same insurer. Here are the most common home insurance discounts to ask about:

• Multi-policy discount
• New home discount
• Advance quote discount
• Payment methods: paperless, automatic, or pay in full
• New home construction
• Senior discount
• Protective devices in the home: Home security systems or fire prevention systems
• Roof upgrades
• Smoke-free

Frequently Asked Questions

Methodology

To determine our picks for the cheapest homeowners insurance companies, we started with a list of 25 of the largest home insurance companies by premiums collected, based on data from the National Association of Insurance Commissioners. From there, we applied a series of filters to narrow the field across key categories like cost, availability, and customer satisfaction. 

For starters, all our top picks must be universally available to all consumers in at least 40 states. To gauge affordability, we looked at Bankrate’s average annual premium across these carriers and eliminated any with an average yearly cost of more than $1,200. (Bankrate, like NextAdvisor, is owned by Red Ventures.) Next, we looked at J.D. Power’s 2020 U.S. Home Insurance Customer Satisfaction Study, and ruled out any companies that scored below 800 on a 1,000-point scale (the industry average was 842).

Finally, we looked at each insurance company’s A.M. Best rating, which evaluates a company’s financial standing. Financial solidity matters for insurance companies because their customers depend on them to pay their claims if they’re in an accident or experience an insured loss. In other words, an insurance company that has the wherewithal to stay in business is more dependable in the long term. We ruled out any company that doesn’t have A.M. Best’s rating of A+ or higher. We also eliminated any companies that are involved in any active fraud investigations.

Two House bills dealing with the handling of homeowner insurance claims following major disasters were approved by the Senate Insurance Committee Wednesday and move to the full Senate for debate and final action.

Rep. Gabe Firment, R-Pollock, an insurance adjuster for over 20 years, is sponsor of both measures. House Bill 457 provides for certain standards of conduct for claims adjusters. HB 591outlines what are considered best claims settlement practices. Both bills received unanimous support in the House.

Hurricanes Laura and Delta devastated Southwest Louisiana, and Firment said north central Louisiana was also hit hard. He said those hurricanes caused destruction from Cameron Parish to Ouachita Parish.

“If (insurance) companies were doing the right thing, I wouldn’t be doing this,” Firment said of his legislation. He added that putting the owner back to where he was is not happening. He said roofs, for example, shouldn’t be spot repaired and insurers should pay to replace the whole roof.

The claims adjuster measure by Firment repeals nine provisions in current law and adds 19 standards of conduct. Adjusters shouldn’t have any direct or indirect financial interest in any aspect of the claim, can’t recommend employment of attorneys or contractors and can’t accept any compensation from either group.

Adjusters should make truthful and unbiased reports of the facts, report violations of the Insurance Code and exercise care when dealing with elderly claimants. And whenever applying for a license or renewal, the claims adjusters should read and acknowledge the claims adjuster standards of conduct.

Firment said over the years and after recent hurricanes he has seen insurance companies and adjusters that weren’t taking care of business. He added that it is critical for the state commissioner of insurance to enforce the state’s insurance laws by holding companies and adjusters accountable with fines and other measures.

Some engineers and building consultants are beginning to play active roles in handling claims, which Firment said is causing some problems.

HB 591 tackles the issue of depreciation, which confuses many property owners. The legislation says insured individuals should be notified that depreciation is being applied, and the insurance company shall provide a written explanation as to how it was calculated.

Firment said some adjusters don’t know how to handle depreciation, and his legislation removes the ambiquity (uncertainty) of the process.

The legislation says insurance companies shouldn’t require that repairs, replacement, restoration or remediation be made to a homeowner’s property by a particular vendor or contractor.

When settling a claim, insurance companies are required to include the general contractor’s overhead and profit. And when replacing items, the insurance company shall replace all of them to conform to a reasonably uniform appearance.

The bill also provides for a mediation process if the insurance company and the home or business owner disagree on the amount of a loss.

Water damage can happen when you least expect it—and depending on the source, it can be expensive to fix.

There are lots of issues that can lead to water damage in your home. There are the obvious ones, like severe weather, floods, and burst pipes. But water damage can also be caused by sneaky leaks, like the condensation that drips out of your air conditioner or a dripping pipe.

Recent data shows that one in 50 insured homes has a water damage claim each year.  When left untreated, water damage can lead to all sorts of major problems, like mold and foundation cracks.

Here are the specifics of when a water damage claim is covered by homeowners policies, when it’s not covered, and the steps to take if you need to file a water damage claim. 

Does Home Insurance Cover Water Damage? 

There are instances in which water damage will be covered by your home insurance and others when it is not. 

Water damage is covered if it is “sudden and accidental, such as if a washing machine supply hose suddenly breaks or a pipe bursts in your home,” according to Quentin Coolen, CEO and co-founder of Waffle Insurance, a national insurance group. 

The caveat is that exclusions and payout limits apply. In general, “homeowners insurance does not cover water damage resulting from poor maintenance of the home,” says Coolen. For example, a neglected issue that occurred years ago and is now causing major problems may go uncovered. 

”Some policies limit the amount of water damage to a home, sometimes to $10,000,” says Jason Pruitt, regional director at Florida-based Altieri Insurance Consultants. 

Situations when water damage is covered by home insurance:

• Accidental overflow from appliances, like a toilet or washing machine
• Water damage from rain or snow
• Plumbing issues, like burst pipes and frozen pipes
• Water damage that results from extinguishing a fire
• Roof leaks that cause water damage inside your home

Situations when water damage is not covered by home insurance:

• Poor maintenance 
• General wear and tear
• Gradual leaks that worsen over time
• Ground seepage
• Water backups
• Sewer pipe backups
• Flooding

How Much Will My Insurance Cover?

With most home insurance claims, your insurance company inspects the damage and writes you a check for the cost of repairs, minus your deductible. But with water damage claims, it’s not always that simple. The source of the water damage may be covered, but not the secondary losses.

For example, let’s say that your water heater unexpectedly bursts, causing flooding in your basement. As a result, stored holiday decorations are now damaged by the water. The damaged water heater and pipes will likely be covered because it was sudden and accidental (the two criteria for a covered water damage claim). However, it’s very unlikely that your insurance company will cover replacing the damaged decorations. 

Standard home insurance does not cover flood damage, so unless you had a separate flood insurance policy, replacing the items would be your responsibility.  Flood insurance can be purchased as a separate policy through the National Flood Insurance Program (NFIP).

How Do I File a Claim? 

When it comes to filing a water damage insurance claim, acting quickly is important. Here are the steps you should take to file a water damage claim: 

1. Document all the damages.

Document all of the damages with pictures and videos. Even minor damage should be noted. Document the evidence before you start cleaning up or throwing out damaged personal items. If someone else caused the damage, like a contractor or plumber, get their contact information. Package up the files and be ready to send them over to your insurance company. 

2. Contact your insurance company.

The next step is to contact your homeowner’s insurance company and notify them of the water damage. They will start the claim process, have you fill out paperwork, and match you with a claim adjuster who will oversee your claim, review the damage in person, and recommend your final payout. 

3. Meet with a claims adjuster.

If you’re dealing with severe water damage, a claim adjuster will likely visit your home to evaluate the damage in person to assess the extent of the damage, how it happened, and estimate the cost to fix. 

You can also hire your own public claims adjuster to get a second, and potentially less biased, opinion. “I recommend always hiring a licensed public adjuster to handle your insurance claim,” says Pruitt. “They are licensed through the state and handle all aspects of your claim from start to settlement.”

For a comprehensive list of licensed public claims adjusters, you can check the National Association of Public Insurance Adjusters (NAPIA). 

4. Prevent further damage and secure surviving valuables. 

Don’t hire a contractor or spend thousands of dollars on major fixes, but do what you can to prevent further damage. For example, turn off the main water line to stop the water from flowing, make temporary or minor repairs to help stop the damage from continuing, or move stored items to a safe place. If you purchase anything, keep your receipts to include in your claim.  

What to Do If Your Claim Is Denied

Even if you think you have a valid water damage claim, it’s possible that your claim could get denied. If this happens, you have the option to appeal the outcome and renegotiate.

“You always have the opportunity to escalate a case if your water damage claim is denied,” according to Coolen. This is where good record-keeping will come in handy. If you want to appeal your claim, you’ll need to have detailed documentation that clearly shows that the damage is, in fact, covered by your policy.

“With your resubmission, consider adding new evidence of the water damage such as an independent appraisal, and hire an attorney to help support your case,” adds Coolen. Keep in mind, though, the overall cost of paying for additional services could add up and eventually outweigh the reimbursement amount denied from the insurance company, Coolen says. 

This is another situation where working with a public adjuster can come in handy. “Public adjusters are the only entity other than attorneys who have the authority to negotiate with insurance companies to correctly settle your claim,” says Pruitt. 

Will Rates Increase After a Water Damage Claim?

After a water damage claim, you should expect your home insurance premium to increase, even if it’s your first one. Having a claim on your record means that you are riskier to insure, and there’s a greater likelihood that you will file another claim at some point in the future.

You might not be able to avoid the rate hike, but there are ways to lower your premium after a water damage claim. First, make sure you are taking advantage of every discount you qualify for. You can also consider paying your annual premium in full, raising your deductible, and even switching insurance companies.

WINK NEWS

You wouldn’t want to head into Hurricane Season without this necessity. Some homeowners insurance carriers are canceling thousands of policies with little notice to their customers.

When Becky Ghrist’s homeowner’s insurance dropped her just weeks before hurricane season was set to begin, she was floored.

“This isn’t just. I thought it was just happening to me because my house was older, but that’s not the case at all. I’m finding out that it’s happening to many people all throughout the state,” Ghrist said.

“Especially the coastal areas. A lot of these companies are pulling out because of risk assessment they say. And they just don’t, you know, it’s not profitable for them anymore,” said Ghrist.

Tens of thousands of Florida policyholders are in that same boat. They are now in search of new homeowner’s insurance carriers after several Florida-based companies dropped them.

The Insurance Information Insitute says the reason for this is over-the-top expenses hitting insurers, who lost $1.6 billion last year alone.

Mark Friedlander works with the Insurance Information Institute. “What led to those losses primarily were roofing schemes, door to door solicitations for roof replacements, where they don’t necessarily need to be roof replacement,” Friedlander said.

“More than 100,000 property lawsuits were filed against Florida insurers last year,” said Friedlander.

These lawsuits, plus costs from last year’s record-setting Hurricane Season put heavy pressure on insurers. Now, they are looking to reduce risk by canceling policies, policies like Ghrist’s.

“And even what I was told if I even do get a policy, I can expect rates to go up 30 to 50% which is a huge increase,” Ghrist said. “And it makes you wonder how you were going to afford it. But like I said you know you have to have coverage. Especially with hurricane season coming. It’s a very scary thought not to have coverage.”

Joyce Ramos’ insurance company told her to put on a new roof or she’d be canceled. “It’s upsetting,” Ramos said. “I just think that’s it’s very unfair.”

After she complained, the company changed its tune and renewed her policy.

If you’ve received a notice of your policy being canceled, the Insurance Information Institute says the best thing for you to do is talk to your insurance professional to see what your options are before making any decisions.