#5 How To Shop For Insurance

#5 How do I shop for insurance?

We recommend that you start by looking at the insurance buying tips offered by United Policyholders. Finding a new policy will be easier if you use an insurance broker who has access to a variety of insurers and plans.

More Details: Finding an insurer who will write a new policy on your home can be a very frustrating process. Companies may say they won’t insure your home simply based on your address. This may change, based on the company’s desire to limit their exposure by limiting the number of homes they insure in a high-risk area. Although social media often have threads on which companies are writing insurance policies in the foothills, the situation is changing constantly, and the information may be out of date or not applicable to where you live.

The Colorado Division of Insurance recommends using an insurance broker that has access to all insurers, both admitted and non-admitted (see below). This will make the process of shopping for a policy easier. A good relationship with your insurance broker or agent is important, especially if you have a claim.

“Admitted” and “non-admitted” distinguish between insurers who are subject to Colorado insurance statutes and regulations; and whether the forms, rates and rules are filed with the Division of Insurance.  Non-admitted insurers are more likely to insure high-risk properties. An admitted insurance company that fails and is unable to pay out on claims is backed up by the Colorado Insurance Guaranty Association, which will help you process your claims and will provide up to $300,000 toward paying your claims.  If you opt for a non-admitted insurer, ask how the company will handle your claim if the losses due to a catastrophic wildfire exceed their ability to fully pay the claims. Finally, understand that the Division of Insurance cannot provide dispute resolution help if the dispute is with a non-admitted insurer.

If you are shopping to find a lower premium (see FAQ #2), don’t give up your current insurance until you have another policy in place.  Although an agent may tell you that you have been accepted, your new policy is not in place until it clears an inspection process that usually takes 30-45 days. Understand that you may need to shop each year, and you will lose whatever protection you might have based on your longevity with your insurer. This might include protection from a non-renewal notice.

Colorado now has a FAIR plan, an insurer of last resort, if you are unable to find an insurance company to insure your home.  This insurance is expensive and limited in what it covers. See FAQ #6 for details on the FAIR plan to understand why it is “an insurer of last resort.”