Fire Season | Insurance Non-Renewal Notices

| Insurance Non-Renewal Notices | WAIT – WHAT?

Receiving notification of an insurance cancellation can overwhelm and frustrate any policyholder. What matters most are the steps you take to regain coverage essential for the protection of your property, assets and loved ones. For those who live in high risk fire areas, another concern is the possibility that the policy insuring the property will not be renewed by the insurance company. In California, there are no laws that prohibit an insurer from non-renewing a homeowner’s policy.

If you receive an Insurance Non-Renewal Notices from your carrier, you need to understand—why your insurance policy is being discontinued; how you can avoid this situation in the future; and what insurance program will be the best fit for you moving forward. As part of this process, seek consultation from a trusted and qualified insurance professional who can help you safeguard against future losses and headaches.

As California fire season heats up, insurance companies drop long-time clients

Residents in the Santa Cruz Mountains, Berkeley hills and elsewhere are getting non-renewal notices from insurance companies dropping fire coverage from their policies

Frances Mann-Craik loves living amid the trees along Highway 35. But her quiet life in the mountains above Silicon Valley is about to get a lot more expensive.

Along with more than a dozen of her neighbors, Mann-Craik recently received a letter from Walnut Creek-based CSAA, a AAA insurer, informing her the company would not be renewing the fire coverage she’s had for nearly two decades.

In an Aug. 20 letter sent two months before her coverage expires, the company said it had changed requirements for home insurance policies and that “based on the new requirements, we are no longer able to continue providing insurance coverage for your property.”

CSAA is not the only insurer dropping customers. Across the Bay Area, from the Berkeley Hills to the Santa Cruz Mountains, insurance companies are declining to renew policies that include fire coverage — sending families scrambling in the heart of fire season to lock down alternatives that tend to be more costly and less comprehensive.

“I just feel betrayed,” Mann-Craik said.

According to figures published recently by the state’s Department of Insurance, companies have dropped nearly 350,000 home insurance policies in the past four years in areas at high risk for wildfires — a figure that’s likely to rise as the market continues to react to the deadly Camp Fire that tore through Paradise late last year.

“I have heard from many local communities about how not being able to obtain insurance can create a domino effect for the local economy, affecting home sales and property taxes,” Insurance Commissioner Ricardo Lara said in a recent statement.

It’s hard to know exactly which companies are dropping coverage, where and to what scale. CSAA did not respond to specific questions about how many non-renewal notices it has sent out recently.

“After careful review of our exposure, we are non-renewing a very small percentage of insurance policies with the highest risk,” the company said in a statement. “Non-renewals are being handled with great care and with enough advance notice to allow people time to review their options for coverage.”

“Information is in relatively short supply,” said Amy Bach, executive director of the consumer advocacy group United Policyholders.

Regardless, good fire coverage is getting more difficult to find at a time when California wildfires are increasing in frequency and ferocity.

“Everyone in my neighborhood who has AAA has received a letter,” said Kathleen Hart, who lives near Mann-Craik and got one of the dreaded mailers.

Hart is particularly frustrated because, like Mann-Craik, she and her neighbors have painstakingly removed vegetation from their properties that could fuel an inferno. They’ve created volunteer firefighting teams and made roads accessible for firetrucks.

But insurance companies aren’t required to take such measures into account when they’re deciding whether to offer coverage and in some cases, they’re moving away from personalized assessments of individual properties and relying on algorithms to analyze neighborhoods.

“We’re doing everything we’re supposed to be doing for fire prevention and then to not have that acknowledged, it’s frustrating,” Hart said.

Mann-Craik agrees. The non-renewal letter said her property did not meet at least one of the company’s guidelines related to nearby flammable vegetation, wind patterns, and poor road accessibility. But Mann-Craik pointed out she has cleared away vegetation and has a long driveway that trucks regularly use to turn around.

“We are already organized up here to take care of each other and our community and to prevent wildfires,” Mann-Craik said. “It counts for zero with the insurance companies.”

According to a recent state report on coverage in wildfire-prone areas, most insurers do not take mitigation efforts by homeowners into account and consumers have little ability to successfully appeal decisions. Mann-Craik appealed her non-renewal and was denied. She has received quotes from multiple other companies for plans that are more expensive than the one she has. Read the full article here…

If you are a homeowner in California and face non-renewal of your policy, utilize the time to find another policy that works best for you. If you believe the reason given for the non-renewal is a little fishy or lacks any reasonable basis, you may want to consult with an insurance professional.