How to Shop for Home Insurance

So what's a home buyer to do?

First of all, if you already have homeowners insurance and you are considering moving to a new home, you probably do not have to worry. Most home buyers who already have insurance--even renter's insurance--have been able to hang onto it, brokers said, unless they are moving into fire-prone areas or into a significantly pricier market.

Many people moving into California from out of state have also been successful at persuading their current insurance companies to continue their policies.

It is the first-time home buyer or the person whose coverage has been canceled who faces a tough situation. Philip Roberto, of the consumer-oriented Prop. 103 Enforcement Project, said his group has fielded numerous complaints from people who have had difficulty in finding insurance, particularly if their home was built before 1950 or is located in a particular area judged to be susceptible to earthquakes.

"It's not fair to deny earthquake insurance or make it prohibitively expensive, particularly to those people most likely to need it in case of a large earthquake," he said. "Society in general has an interest in making sure that people in the hardest-hit areas can recover adequately."

Experts working in the real estate and insurance industries listed these tips as ways to work the tight insurance market:

--Contact the company that sells you car or life insurance. If you already do business with them, they may be more willing to sell you homeowners insurance also, even though they are not technically writing new policies.

--Get in touch with an independent agent. The 4,000 brokers in the Independent Insurance Agents and Brokers of California work with smaller companies who are still selling homeowners insurance policies. Look in the telephone book under "insurance" to get in contact with independent brokers in your area. One warning: You may have to pay more.

--If you are buying an older home, be aware that many insurers are rejecting any houses built before World War II. "It used to be that wood-frame or masonry was the only question they asked," said Candysse Miller, spokesperson for California's Department of Insurance. Now, many other factors that make a house riskier to insure, such as the type of soil in your neighborhood, are being scrutinized.

"We've had people call us and say that renter's insurance is difficult to get based on the age of the structure they're renting," Roberto said. "People have been asked whether their home is bolted down to the foundation."

--Shop around. Do not expect to call one or two companies and secure a policy in an afternoon. Plan on shopping for insurance as you would shop for a car. You may have to call six or eight carriers before you find one selling new policies. The California Department of Insurance may be able to help you with comparison shopping. Its consumer hot-line number is (800) 927-4357.

--Check with the FAIR plan, which has a Los Angeles office. The consumer telephone line is (800) 339-4099. It is costlier and does not cover theft or liability, but it will get you the fire insurance you need to get through escrow. You may then be able to go to the standard market and purchase a wrap-around policy to cover the rest of your needs.

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