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Families Need to Shop to Find Good Home Coverage

Families need to shop hard to find affordable, comprehensive home insurance policies

NEW YORK May 29, 2008 (AP)

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Since Hurricane Katrina blew ashore nearly three years ago and caused massive damage along the Gulf Coast, families in many coastal states have found it difficult and costly to get comprehensive homeowners insurance.

People generally are paying more to get less coverage, experts say. That means that as this year's hurricane season begins, it is especially important for homeowners to shop around for the best policies, be aware of what is covered and what isn't, and consider purchasing federal flood insurance.

Government forecasters expect the 2008 hurricane season to be slightly heavier than average, with an estimated six to nine hurricanes forming. The National Oceanic and Atmospheric Administration also said at least two of the storms could reach major status, with winds of more than 110 miles per hour.

If creating an emergency evacuation plan is a family's No. 1 priority, then getting good property insurance should be No. 2.

Tom Crowley, a regional director with the Independent Insurance Agents & Brokers of New York, said that after Katrina, a number of major insurance companies such as Allstate and State Farm refused to renew some homeowners' policies to reduce their exposure in coastal areas, even if the homes were a half-mile or more from the water.

Companies that continue to write policies for houses along the coasts have sharply increased premiums, he added.

"Three or four years ago, insurance for a $300,000 home cost about $1,000 a year," Crowley said. "In the past year, it's gone to $1,800 to $2,000."

Richard Attanasio, vice president for property/casualty ratings at A.M. Best Co., a credit rating agency based in Oldwick, N.J., said consumers needed to shop around to try to hold down costs.

"It might require more work than it did in the past," he said. "There are risks where people are living, and companies have to price for those risks."

Consumers need to pay close attention to what's included and what's excluded from coverage, Attanasio added.

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