Location Can Affect Availability and Cost

The location of a property can be a primary factor of insurance availability. Homes located in areas with a greater exposure to losses due to a particular peril pay a higher cost for coverage than areas less exposed to that peril. For instance, insurance premiums for homes in the Midwest may reflect the higher cost due to tornado coverage. Those with greater exposure to wildfire, such as designated brush zones in California, may have difficulty finding available or affordable coverage in the voluntary market.

Another factor affecting the availability of insurance is a pending event. For example, if a hurricane or a wildfire is approaching, insurance companies will often issue a temporary prohibition on issuing coverage, and no new coverage can be written in the area threatened by peril until the threat passes.

Exposure to Earthquakes
Homeowners who live on or near major faults are exposed to earthquakes, and the soil type in certain areas may be more susceptible to earthquake damage as well. As a result, the closer a home is to a fault line, or sits on soil types with greater exposure to loss in an earthquake, the more limited insurance options may be because of the extreme risk of earthquake loss.

Recent earthquake activity can also be a determinant of earthquake insurance availability. As more earthquakes occur, more companies are likely to experience significant claims from earthquakes, and the companies may become financially distressed. These companies may find it difficult to provide coverage to the same volume of policyholders, and this can cause an overall availability problem. In certain areas, state associations are established to ensure insurance availability in constricted markets. These publicly-run entities provide insurance coverage when availability and affordability problems arise. (See section on voluntary and involuntary markets on page 9.)

Exposure to Hurricanes
Homes in coastal areas of the U.S. are more exposed to direct hurricane impacts than homes further inland. As a result, homeowners in these areas may find fewer hurricane insurance choices. Like earthquakes, frequent storm activity can constrict hurricane insurance availability and markets. Also as with earthquakes, publicly-run entities typically fill gaps in the market and may provide insurance coverage when availability and affordability problems occur.



Home Features Can Affect Availability

Homeowners can encounter insurance availability problems due to location as described above for earthquake and hurricane zones. However, if a home has unusually hazardous features, insurance companies may be unwilling to provide coverage regardless of location.

Some of the features considered hazardous could include inferior construction, a low performing roof shape or roof covering, an unbolted frame, an unsecured chimney, and/or water heater or structurally weak features such as awnings or other exterior ornamentation. Further, older homes that do not meet current building codes and poorly maintained homes may be difficult to insure.

Ensuring the “Insurability” of Your Home

Homeowners can ensure the insurability of their homes by keeping them current to local and modern, model building codes, by performing regular home maintenance, and by implementing the loss mitigation measures described in the following pages. Homeowners may also evaluate their available insurance options by staying informed of changes in the local insurance marketplace.



The Actuarial Foundation, a 501(c)(3) organization, was established in 1994 to help facilitate and broaden the profession’s contribution to society. The Foundation explores innovative ways to apply actuarial skills in the public interest and brings together broad partnerships of individuals and organizations to address social problems in creative ways.


The nonprofit Federal Alliance for Safe Homes, Inc. (FLASH®) is an award-winning coalition of government agencies, professional associations, and private industry committed to strengthening homes, safeguarding families, and protecting economic well-being by promoting disaster preparedness.

©Copyright 2015 by Federal Alliance for Safe Homes, Inc. (FLASH®) and The Actuarial Foundation.