There are many uncertainties that come with homeownership. One of them is weather, which is unpredictable and can be incredibly destructive. Below-freezing temperatures can cause pipes to burst and flood homes, or a fire can break out and destroy every piece of property in its path.

In these cases, homeowners traditionally turn to their home insurance policies to help cover the costs associated with loss events. However, a noticeable and troubling trend emerged in 2017 and 2018, as insurers increasingly dropped or decided not to renew homeowners insurance policies. Homeowners who once thought insurance was a given are struggling to find coverage at all.

Why Are Home Insurers Dropping Coverage?

A growing number of homeowners insurance providers are refusing to renew coverage for homes negatively impacted by major natural disasters and other events. Researchers studying the impact and frequency of natural disasters have noted that, although the number of deaths related to natural disasters has fallen, the number of reported disasters and their associated costs have increased in the past two decades.

Insurers are now responding in two key ways to the greater risk of providing coverage: Increasing premiums and dropping coverage where the financial risk outweighs the benefit of offering insurance.

Premium increases are not entirely uncommon in the homeowners insurance industry or any other insurance market. However, dropping coverage to an extensive span of the market is an unusual development. It's one that has been notably observed in two key states: Florida and California, which endured costly natural disasters in the past two years.

Following the 2018 hurricane season, Florida insurers dropped coverage for more than 87,000 homeowners in the third quarter alone. In California, where fires caused billions of dollars in damage last year, many insurers pulled out of the most impacted and vulnerable markets. And many homeowners who weren't impacted by the fires, but are located in California's "brush-heavy" regions, are being dropped by their insurers. Others are finding it difficult to get insurance from providers who are creating stricter underwriting requirements.

It's unclear whether this trend will be sustained, as many insurers are responding to the pressures that come with profitability in different markets. In the case of Florida, in particular, the increase in dropped coverage may be a short-term reaction to major events in just the past two years. As noted by the Sun Sentinel, the Florida insurance market was deemed "healthy" last year following a decade of few major hurricanes impacting the state.

Can Homeowners Renew Insurance or Find Alternatives?

Homeowners are not without some recourse should they lose coverage on their homes. Many states, including both California and Florida, offer what is known as "last-resort" or "high-risk" home insurance.

More technically referred to as Fair Access to Insurance Requirements (FAIR) programs, these government-backed programs provide an option for struggling homeowners. FAIR programs are designed to help give homeowners a last resort in case privately operated insurance providers refuse to extend coverage, including cases where a homeowner is considered a high risk based on the property's location.

In Florida, for example, Citizens Property Insurance Corp. offers last-resort or high-risk home insurance coverage. In 2017, the company predicted it would have to increase its number of written policies following years of declines. This was due to the particularly active and damaging hurricane season in 2017, which also resulted in thousands of Florida homeowners losing their insurance coverage.

In California, homeowners can access the state's Fair Plan Property Insurance website to find an insurance broker that offers high-risk fire insurance or insurance for homeowners who received nonrenewal notices.

As might be expected, any homeowners pushed into high-risk insurance policies should expect higher rates. Additionally, many providers offering these state-backed "last resort" coverage options are also proposing or instituting rate increases. This is partly due to the increased demand for such insurance and the increased potential that insurers will have to provide coverage for loss events.

Homeowners who have received nonrenewal notices or have trouble finding insurance should strongly consider investigating their state's FAIR program, if available. Additionally, homeowners who live in regions that are traditionally at a higher risk for natural disasters should consider ways to mitigate potential losses or damage to their home, based on the type of natural disaster that's common in the region.

Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.