In an insurance market in which homeowners are struggling to maintain coverage and prices are skyrocketing, Chicago residents have it worse than the norm. According to ABC7 Chicago, the Chicago area experiences more than the national average rate of home insurance drops and denials.

What’s happening?

It isn’t unusual these last few years for homeowners to lose coverage, even if they have maintained a longstanding policy with a reliable provider. Insurers are trying to minimize risk by bumping homeowners who they feel may encounter disasters in the near future.

For those homeowners who can secure coverage, rates have jumped in the last few years, even compared to the general inflation. Many people who qualify for insurance can’t afford it.

According to data obtained by ABC7 Chicago, the local area is hit harder than many, and denials are common.

In some cases, insurers seem to be doing everything they can to get rid of homeowners without paying them.

For example, homeowner Vivien Jones had insurance through “The Hartford” and had filed multiple weather-related claims to replace her roof, ABC7 Chicago reported.

However, rather than pay her enough to get the job done, the company dropped her coverage, citing the unrepaired roof itself in its notice as the reason for the decision.

“I told them what the problem that I was having, and that’s why I was calling in for a claim,” Jones said.

In total, the company had given her $3,200. She had used the money to make what repairs she could.

Another local resident, Julie Gillette, told ABC7 Chicago that she and her husband were dropped by State Farm for being “high-risk” customers, simply because they filed claims according to their policy.

Why is this lack of insurance coverage important?

Without insurance coverage, homeowners are at major risk of losing their homes. As soon as a disaster strikes, whatever money they have invested in the property will be lost, and they will have no way to recover it.

Meanwhile, when buying or selling a home, lenders generally require that the property be insured. Without insurance, families are stuck.

What’s being done about this insurance disaster?

Shopping for deals every year or two and bundling different types of insurance can help you save money. 

However, in the long term, only government regulation can fully solve this problem.

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