California — A Shocking Number of Underinsured and Uninsured Homeowners

The San Francisco Chronicle looked at data produced by Lending Tree and found a huge number of Californians are underinsured and if disaster strikes, they won’t have enough insurance to rebuild the home to a home that compares equally to the one that was destroyed.

Worse, the data found 806,600 residents in California — 10.5% of all homeowners — are not only underinsured but they don’t have insurance at all. The uninsured rate, says Mercury Insurance VP Kelly Butler, is 10.5% of all homeowners in the state.

This is especially worrisome in Lake, Kings and Humboldt counties where the uninsured rates are very high.

“Being underinsured can turn a crisis into a financial disaster. Waiting until after a catastrophic event such as a wildfire to review your coverage is far too late,” Kelly said. “That’s why it is essential to meet with your insurance agent at least once a year to ensure your policy reflects current replacement costs and risks.”

The increased concern of wildfire risk, the rise of construction costs and changes in the insurance market are driving the underinsurance and non-insured crisis. Butler said work is in progress to improve the availability and affordability of insurance in high-risk areas.

“Fortunately, it’s not all doom and gloom,” Butler said. “The state is beginning to make meaningful changes. Last year, Insurance Commissioner Ricardo Lara introduced California’s Sustainable Insurance Strategy, which supports more accurate pricing in wildfire-prone areas and aims to expand coverage options for homeowners who need it most.”

Source link: Insurance Business America — https://bit.ly/3ZLSVaU