Why am I being non-renewed or canceled for fire risk (distance to brush)?
California wildfires have gotten more extreme. Wildfire season is starting earlier and ending later. Record setting natural disasters have occurred nationwide.
Insurance companies may be losing money rather than earning a profit, resulting in them tightening up their guidelines till things change.
If you just purchased a new home and aren't able to find insurance, or received a 'non-renewal notice' from your current insurance company, you may be confused or shocked by what's going on. Why are you suddenly being non-renewed?
This article discusses:
Some background
During the 2012 California drought, some insurers tightened up their guidelines for wildfire risk. Consecutive wildfire seasons caused insurance companies to lose over $20 billion in 2017 and 2018 alone (twice the industry’s profits in since 1991).
The 2017 Tubbs Fire in Santa Rosa shocked not just Californians, but the entire country and world. These were areas not known to be fire prone or even near any wildfire regions. Each year since then, the wildfire season begins earlier, lasts longer, and causes more destruction. This has caused some insurance carriers to exit the California homeowners marketplace entirely, while others have filed for rate increases with the CA Department of Insurance, made substantial inspection recommendations, and tightened their underwriting rules even more. Insurance companies have “brush maps”, and now will even look at the wind patterns vs. just distance to brush to calculate risk.
Prior to these events, the homeowners insurance marketplace in CA was simpler with ample options. Consumers would have the choice to compare prices among multiple carriers. Now, in some newly mapped “higher brush” areas, it can be difficult to find even one insurance company willing to offer you a policy.
If you're having a difficult time finding homeowners or property insurance, or have received your “non-renewal” notice, we may have some options.
Our agency represents several dozen different insurance carriers. We will compare your property against each carrier’s brush map to see if we can offer you another option in the preferred marketplace.
If we've exhausted our search and preferred carriers decline to underwrite your address, we have alternatives:
We can offer a surplus lines "non-admitted" policy, or
We can offer a CA FAIR Plan and "Difference in Conditions" policy
Understanding the four key marketplaces can help when shopping for insurance.
Preferred carriers – these are the companies you’ve heard of via ads on TV or online. They typically offer the best coverage and pricing, and often offer many discount options (including bundling). If you qualify, this is usually the best value for the consumer.
Specialty carriers – these may be the best fit depending on the type of occupancy. If you’re engaging in short-term rentals (Airbnb, VRBO), or operating your property as a vacation rental, it will likely not be a fit for the preferred marketplace. Specialty carriers are companies offered by insurance brokers, like Wang Insurance.
Surplus lines or non-admitted carriers – these companies provide insurance only when traditional carriers are unable to offer you a policy. There’s no consumer direct option to purchase these policies, you’ll need a broker.
California FAIR Plan – this is a “last resort carrier” designed to make sure there’s an insurance option regardless of location or loss history. There’s still underwriting requirements for the home condition. It offers basic coverages only, and does not include water damage or liability (which will have to be purchased separately). Some preferred and specialty carriers now partner with the FAIR plan to offer coverage in wildfire zones through a “Difference in Conditions” or “Wrap” policy.
Depending on your situation, reaching out to a broker like Wang Insurance may be your best option. We can help submit applications to all available carriers to find the best option for you in terms of cost and coverage.