Tuesday, May 22, 2012

So There's A Fire! Why Can't I Buy Insurance?

Fire season is here for most of the country. One thing that happens when a large fire occurs is that carriers place a moratorium, or to put it more practically, they stop writing policies in the area until the fire is out.

Makes sense. They don't want to insure a house today and then have to rebuild it tomorrow.

But what if you are trying to buy insurance? You are in escrow on a house and about to close when a large wildfire breaks out. Your agent tells you that there is a moratorium and that they can't provide proof of insurance or bind the policy. Or you paid cash and did not get insurance on the property.  In short, you wait and hope the house is ok.

Or you can call around. I work with different carriers. Where one carrier will not write during a moratorium, another may. They usually block out by zip code and each carrier determines what they want to do in these situations. You might pay more, or you might pay less, or you might not find anyone at all until the moratorium is lifted. At least you tried.