There are 2 difficult to miss regulations, which govern homeowner’s insurance coverage in Alaska:
One, is that an ‘insurance company providing insurance coverage may not refuse to issue a new policy or renew an existing policy, limit coverage, cancel an existing policy, deny a covered claim, or increase a premium based only on the fact that a person was a victim of domestic violence or a provider of services to victims of domestic violence.’ (Alaska Statute 21.36.430)
The second is that ‘a company providing insurance coverage in Alaska may not deny a claim if an excluded cause of loss is in a chain of losses which began with a covered cause of loss.’ (Alaska Statute 21.36.212) Yet, complaints are filed fairly regularly about people being unable to obtain a Homeowners Policy. Why?
There are a number of reasons why a person is not able to obtain a policy:
Options for coverage may be limited if you have filed claims on a policy taken previously, or if your home is above a particular age, if you stay in a remote location or even if your claims history bears a record of losses like theft or water.
So, if you are denied a homeowners policy, enquire about other policy forms which might provide coverage for your property. There are many types of homeowner’s policies, which may be able to provide limited coverage for your home and your personal property given your circumstances.
A dwelling fire policy may be another avenue to explore. The dwelling fire policy is available with a variety of coverages and is of many types. Most dwelling fire policies cover only the listed or named perils, which means that they protect you, only if you incur a loss through the list of perils included in the policy. For example, a basic dwelling fire policy, sometimes called a DP-1, may only provide coverage for losses from fire and lightning.
Additional Coverage
However, using the DP-1 as your basic policy, you may obtain additional coverages to protect your dwelling against losses from perils: windstorm, theft, and vandalism and malicious mischief.
One type of dwelling fire policy known as the DP-3, has an exhaustive list of named perils and even offers coverage for all perils except those specifically excluded. Losses under a dwelling fire policy are usually paid on an actual cash value basis, but sometimes these may be paid via the replacement cost basis. This however varies from company to company. While this type of policy may not offer the comforts provided by a homeowner’s policy, it does provide some basic protection for your investment.
When enquiring about homeowner’s policies, do find out about the surplus lines insurers. These companies are not certified by the Alaska Division of Insurance, but are allowed to sell policies for the ‘hard to insure situations’. A list of surplus lines insurers is available on the Division of Insurance’s website at http://www.dced.state.ak.us/insurance/bulletins/bulletins.htm.
Lastly, if you have been unable to obtain or maintain insurance on your property, your lender may offer coverage. Known as the “forced placed” coverage because the circumstances have forced the lender to offer this coverage in order to protect their interest in the property, this policy provides protection for the lender and not the homeowner. A forced placed policy provides coverage limits equal to the balance of your loan and you may not have any protection under this policy for your personal property or liability exposure.
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