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Your mortgage lender required homeowners insurance, so you’re fully protected, right?

Think again.

The insurance industry operates through a complex network of insurers and reinsurers. When you purchase a policy from companies like State Farm, Travelers, or Erie, they transfer portions of their risk to other companies, often international firms. This process mirrors how your mortgage may be sold to a third party shortly after closing.

Recent catastrophic events have exposed cracks in this system. The cascade of disasters – hurricanes devastating the Southeast, the 2023 Lahaina wildfires in Maui, and the Palisades fires in Los Angeles – has overwhelmed insurance companies. Thousands of homeowners are now stuck in limbo, waiting months or even years for rebuilding funds as insurers struggle with depleted reserves and unresponsive reinsurers.

Don’t wait for disaster to strike. Take these critical steps now:

1. Contact your insurance company to understand their exact claims process and timeline
2. Request information about their reinsurance partnerships and those companies’ track records
3. Obtain a complete copy of your policy – not just the Declarations page
4. Review all coverage limits, exceptions, and exclusions in detail
5. Monitor your mail vigilantly for policy changes or non-renewal notices

A disturbing trend has emerged: in both Lahaina and Los Angeles, insurance companies sent non-renewal notifications to many homeowners shortly before disaster struck. Missing these notices could leave you completely unprotected.

While legislators debate reforms around reinsurance and claims processes, you must protect yourself now. Know your coverage, understand the claims process, and assert your rights as a policyholder. Your financial security depends on it.

Remember: The time to review your insurance coverage is before you need it. Make that call today.

Thinking about buying a home and want more tips for handling insurance? Contact Properties on the Potomac at 703-624-8333 today!