Hot Top: Homeowners Insurance - High-Risk Homes & Non-Renewals

If your insurance carrier refused to renew your policy, don’t stress. It’s happening to more and more homeowners, particularly throughout California where wildfire losses are causing huge upheavals in the insurance industry. Knowing you’re not alone may make you feel a little better - but it doesn’t help cover your house.

Here’s what you need to know about high-risk homes and non-renewals.

If you live near a high-risk fire area and received a non-renewal notice of your homeowner's insurance, it is important to know your rights and options. While there are currently no laws in California that prohibits an insurer from non-renewing a homeowner's insurance policy, California law does provide consumers with specific rights in the event of a non-renewal:

  • The notice of non-renewal must be sent at least 45 days prior to policy expiration.
  • That notice of non-renewal must contain: (1) the reason or reasons for the nonrenewal; (2) the telephone number of the insurer's representatives who handle consumer inquiries or complaints; and (3) a statement indicating that if the consumer has contacted the insurer to discuss the non-renewal and remains unsatisfied, the policyholder may have the matter reviewed by the California Department of Insurance.
  • The insurance company must determine whether to renew or non-renew based upon its underwriting guidelines, which must be objective, have a substantial relationship to the risk of loss, and be applied consistently among insureds in the particular group being non-renewed.

Just because you receive a non-renewal notice does not mean that you will be unable to get coverage from another insurance company. The California Department of Insurance recommends consumers who receive non-renewal notices do the following:

  • 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.

We encourage residents who receive non-renewal notices to contact the California Department of Insurance if you have an insurance question or need assistance resolving an issue with your insurance company. You can call them at 1-800-927-4357, or visit their website at insurance.ca.gov to send them an email.