Property and Casualty Insurance Deserts
Whether its AllState no longer offering new property and casualty coverage to new customers in California. Or Farmers. Or State Farm. Or AIG. You may be getting fewer property and casualty insurance (P&C insurance) options than you were used to — and not just in the West.
Climate change-fueled disasters and limitations on the rate that insurers can charge for homeowner’s coverage make for tough insurance math.
FAIR plans are an option. But coverage is limited and likely to be on the basis of actual cash value rather than replacement cost value — a tough proposition with ever-increasing building costs.
So, what are your options if you live in a state where traditional insurers are pulling back on providing new coverage?
First, let’s level set.
Why property and casualty insurance is vital
Property and casualty (P&C) insurance looks to safeguard your financial well-being and protect your assets.
Property insurance typically covers physical damage to your property, such as your home or business premises; Casualty insurance focuses on liability and covers claims resulting from injuries or damages caused by you or your property to others.
Having the right insurance in place can mitigate the financial impact of such incidents and ensure that you can recover and rebuild.
Factors contributing to P&C insurance deserts
Insurance deserts are usually associated with medical coverage but P&C insurance deserts are becoming more common — whether they are driven by hurricanes, floods, wildfires, or societal factors increasing crime.
As with any insurance, insurers will charge exorbitant premiums or decline coverage altogether if the area is deemed high-risk. The increasing cost — and frequency — of large climate events has added an outsized risk to the insurance pool. Some P&C insurers have determined they can no longer bear it.
Finding solutions for insurance deserts
You need an insurance agent in your corner. They don’t just have the experience to help you understand your options — including all the things that could go wrong — but also insight into why the cheapest option might not be the best.
However, having a buffer between you and the agent is helpful. Our clients engage with our PCFO services, not the insurance company directly. I’ve worked with several clients whose insurance agent point of contact shifted from a named individual to the anonymous triage of an off-shore call center. I’ve seen enough to know that movie doesn’t usually end well. In those cases, we leverage our list of preferred providers to find a better fit.
Here are two ways we help clients navigate insurance deserts:
- Leverage local experts: Brighton Jones PCFO service teams know your local community and understand the challenges they face and the P&C insurance that most successfully meets them. Local agents and brokers give you access to specialized coverage options that may not be available through larger national providers.
- Consider alternative insurance options: By specializing in certain areas, niche insurance providers can focus on specific industries or regions—filling the gaps left by traditional insurance companies. Examples include Cyber Liability Insurance for digital threats, Event Insurance for gatherings, and Professional Liability Insurance for negligence claims. These tailored products offer targeted protection for businesses and individuals in diverse sectors.
The cause of insurance deserts can be debated ad nauseam. But this isn’t an academic debate for the homeowner simply wanting to protect their most significant asset. The “why” is far less important than the “what can I do?” Yes, there are options, but they require some navigation and assistance from an expert.
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