Homeowners face confusing issues with home insurance

Posted at: 09/25/2013 6:17 PM
By: Erica Zucco, KOB Eyewitness News 4

Homeowners across the state are reeling after the past month’s flooding. For many, it’s created confusion over what insurers will cover – and what more they could have to pay in the future.

Janet Ellweard was one of those homeowners. A summer storm sent a wall of water into her home of 21 years – one that settled in at 8 inches. She couldn’t make an insurance claim because she doesn’t pay an extra “flood coverage” premium.

But along with that, she says the cost of her insurance is rising.

“Nothing has changed in my circumstance,” Ellweard said. “I don't have flood insurance now, I didn't upgrade my insurance in any way. It's just wrong.”

She claims an agent said it was because flooding prompted more payouts than usual, and the company needed to make up for costs.

“It just seemed outrageous to me that the insurance companies would raise the rates to pay out...to whom?” Ellweard said.

But the company – Foremost Insurance – says there’s some confusion here. They say the new rate increase was actually filed for – and approved – last year, and that homeowners were notified.

They say the drivers were wind, hail and wildfires, not flooding. They plan to reach out to the insurance agent involved to make sure they understand the reasons for changes.

Last year, several insurance companies announced rate increases as a result of natural disasters. Most of those are just taking effect now.