Last week I blogged about how rain-induced mudslides are of concern to homeowners who live in wildfire burn areas. 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.1
In the event of a non-renewal, California’s Insurance Code does require the notice of non-renewal be sent at least 45 days prior to policy expiration and include the following:
(A) The reason or reasons for the nonrenewal.
(B) The telephone number of the insurer’s representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other
text of the notice of nonrenewal.
(C) A brief statement indicating that if the consumer has contacted the insurer to discuss the nonrenewal and remains unsatisfied, he or she may have the matter reviewed by the
department. The statement shall include the telephone number of the unit within the department that responds to consumer inquiries and complaints.2
So what should the homeowner do if his or her policy is not being renewed by the insurance company? The California Department of Insurance gives the following helpful advice:
– Ask for help from your current insurance agent or insurance company to see if there are any improvements you can make to your home to mitigate your fire risk and maintain your current policy.
– Shop the market. Not all insurance companies have the same eligibility guidelines. You may want to consult with a local agent familiar with your neighborhood. Residential insurance protects your largest financial investment. Plan on taking enough time to conduct a comprehensive search when purchasing insurance. The greater the extent of your search, the greater the opportunity to find residential insurance that meets your specific needs.
– Contact the California FAIR Plan at (800) 339-4099. The FAIR Plan was created by the Legislature to make property insurance more readily available to people who have difficulty obtaining it from private insurers because their property is considered "high risk." Please note that the FAIR Plan provides only basic fire protection. If you purchase a FAIR Plan policy, you may also want to consider purchasing supplemental insurance known as "Difference in Conditions" (DIC) coverage. DIC policies are designed to provide coverages such as liability, theft and Additional Living Expenses, which are not covered by the FAIR Plan policy.
– Visit the California Department of Insurance web site for additional resources on homeowners insurance and for a list of insurance companies that are licensed to sell residential insurance coverage in California.
– Call the Department’s toll-free Consumer Hotline at (800) 927-4357 if you have an insurance question or need assistance resolving an issue with your insurance company.3
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.