SAN DIEGO COUNTY, Calif. — As wildfires up and down the state continue to threaten and in some cases destroy property, homeowners rely on their insurance policies for protection and peace of mind. However, many companies that have paid out billions in claims in the last few years are now much more restrictive in the coverage they offer.
For some California homeowners, however, the peace of mind of having insurance has been shattered after learning they were dropped by their carriers.
Danielle is one of those Californians. Over the weekend, she was given 60 days notice that her policy would not be renewed despite being a loyal customer for nearly 40 years and paying premiums in excess of $3,500 a year.
“It is peace of mind, and that peace of mind has now been shattered. Kind of felt betrayed by them because I had been with them for so long,” she said.
Aaron Farmer owns Aaron J. Farmer Insurance. He said that more and more homeowners living in areas prone to wildfires are receiving non-renewal notices from their insurance companies.
“We are getting a lot of calls. What started as a trickle a few months back has almost turned into a small avalanche,” he said.
Earlier this year, California’s Department of Insurance Reported that in 2018, non-renewals increased by six percent, meaning that 88,187 homeowners last year were forced to find replacement coverage – usually at higher prices.
This past August, state insurance commissioner Ricardo Lara said he is fighting to give customers more than 45 days’ notice before their police is dropped.
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Danielle said she will now shop around for a new insurer, but she is concerned.
“This is ridiculous. People need more than 45 days to be able to assess once they’ve been non-renewed. Are other insurance companies now going to drop other people? There is nobody who wants to cover us,” she said.
It is an issue that Aaron Farmer said will most likely increase as so many insurance companies have sustained losses over the last few years.
“I think it is going to definitely get worse before it gets better,” he said.
What can homeowners do if they are dropped?
Just because homeowners have 45 days before they are dropped does not mean they should wait until the coverage drops to shop around. New policies most likely mean an increase in premiums and deductibles.
If denied by three companies, homeowners can qualify for state-issued fire insurance coverage under California’s Fair Plan.
Under the plan, however, homeowners can only be protected up to $1.5 million total, and homeowners will most likely pay more than previously.