Homeowners Insurance

Multiple hurricanes along the East and Gulf coasts over the past few years have left more than debris in their wake. One ripple effect that's slamming coastal residents is double-digit increases in their once-stable homeowner's insurance rates.
From Florida to Massachusetts, many coastal homeowners have seen their insurance rates climb by 20% or more. "Someone in Ohio who's moving to coastal South Carolina should expect to pay more for insurance than what they're paying now," says agent Wendell Sutton, of Kinghorn Insurance Services, in Hilton Head, S.C.
In many cases, insurance companies are not renewing policies. Dennis Slattery, 60, a 19-year resident of Hernando Beach, Fla., lives in a house on the beach. He recently learned that his carrier was dropping his coverage because of "catastrophic risk management" – in other words, the risk from future hurricanes. Many other Floridians, he notes, are facing rate increases that they can't afford. "People are worried, and some are thinking of moving," Slattery says.
Insurance companies are raising rates and dropping coverage in an attempt to reduce their risk exposure. "The old view was that we would have a bad hurricane every few years," says Robert Klein, director of the Center for Risk Management and Insurance Research at Georgia State University. "The tone of insurers started changing after the fourth hurricane hit in '04."
Not ready to give up the surf? There are some ways you can reduce your insurance costs.
Shop Around"You can easily pay twice as much from one company to another," says Robert Hunter, director of insurance for the Consumer Federation of America. Compare rates of two or more carriers.
Most state insurance commission websites offer price information, a list of the state's leading insurers, and buyers' guides. Visit www.insureuonline.org to find links to each state commission.
If your coverage has been dropped, you can learn about "last resort" options at the commission sites. Most states have insurance pools for coastal residents who can't get coverage, but be prepared to pay higher rates than other residents who still qualify in the private market. For example, those in Louisiana's last-resort option, called Louisiana Citizens Property Insurance Corp., pay premiums that must be 10% above the average of the top ten writers in the parish they reside in. "By law it's more expensive than the private sector," says Jim Donelon, Louisiana insurance commissioner.
Keep Coverage Up to DateIf you've fixed up your house or property, tell your carrier; maintaining your home will reduce your liability. Also, don't overinsure. Madelyn Flannagan, a vice-president of the Independent Insurance Agents and Brokers of America, notes that "homeowners just need to insure the cost to replace the house."
Seek DiscountsImprovements for safety, such as installing windows that can survive winds of 150 to 180 miles per hour, could cut your premium. Ask for a senior discount or for a longevity discount if you're a longtime client. Cobbling together several discounts could offset any increases in your premium. Also, you could save money if you buy your homeowner's, auto, and other coverage from the same insurer.
Adjust Out-of-Pocket Costs"Play with your deductible," says agent Kathy McKay, of McKay Stelling & Associates, which serves Charleston, S.C. Raising your deductible from $250 to $1,000 might save you 10% to 15% on your premium.
In many coastal areas, you may need a separate policy for wind and hail. And flood insurance is a must, insurance experts say. You can purchase flood insurance through the federal subsidized program, and you can buy extra coverage from private insurers.
Reprinted with permission. All contents © 2007 The Kiplinger Washington Editors, Inc