Underinsurance Help

Former CA Insurance Commissioner John Garamendi with independent agent/UP advisor David Shaffer and Amy Bach at a hearing on solving the underinsurance crisis.

Home and business owners whose property is severely damaged or destroyed in natural disasters often find themselves far short of the insurance dollars they need to replace what they lost. Underinsured is the word that describes this situation. When you’re underinsured there is a gap between the actual cost of replacing your destroyed home or business and the payout you receive from your insurer. Underinsurance causes the claim settlement process to be delayed and often derailed. Underinsurance is one of most challenging obstacles to recovery.

United Policyholders first saw the underinsurance problem when we tackled our first disaster-- a northern California wildfire that destroyed 3000 homes in 1991--and we've seen it ever since all across the country. We’ve seen it in Arizona, California, Kansas and New Mexico after wildfires and in every one of the Gulf Coast states that have been hit by hurricanes in recent years. The underinsurance problem most often affects disaster victims, but it also affects people who lose structures in isolated incidents. UP staff and volunteers now spend approximately half their working hours helping underinsured consumers.

Insurers sell the promise that they'll "put you back where you belong," but they don't always deliver. Homeowners and businesses (policyholders) take insurers at their word and rely on agents to set their policy limits at full replacement value. But when policyholders come up short, they are shocked to learn that the laws in most states give agents immunity for failing to fully insure property.

UP is working hard every day to help individuals and policy makers solve the underinsurance problem.

The following links will lead you to resources to help you avoid being underinsured in the first place or solve the problem if you lose property and find yourself underinsured.