In case you missed it…Homeowners’ Insurance has become Californa’s “It Girl”. Maybe Home Insurance Carriers are not receiving the same amount of positive popularity as an It Girl would receive but they have been in the recent spotlight none the less!
The recent natural disasters in our State have caused Insurance Carriers to revisit brush mapping guidelines, eligibility requirements, and among other things rate increases. You see, Insurance works as a pooling system. I learned this in my first week of Insurance School and it is one of the first things they will teach you. We pay our premiums to our insurance company and it goes into a big “pool” so that when you have a total loss, or several losses i.e. catastrophic loss there is money to pay for those claims. To make up for major disasters Insurance Carriers will most likely file for a rate increase with the Department of Insurance.
I read an article, about how in 2018 for every dollar an Insurance Company brought in, they spent two dollars in claims. Every carrier that we have within our agency has filed for rate increases, or have already applied that rate increase to their customers. As painful as it is for us as consumers (and agents) unfortunately, rate increases happen.
But what about Non-Renewals? Several carriers are setting homeowner’s policies up to Non-Renew. These properties could be in areas that are mountainous or not. Even if you think that your property may not be in a fire hazard zone, think again. The carriers look at things like FireLine score, Wildfire Risk Assessment, how close are you to a fire hydrant and fire station, what is the clearance around your home, how old your home is and if it has been updated, etc. I have seen several homes get non-renewed in areas that have several fire hydrants and are in very suburban neighborhoods get non-renewed.
So what do you do when you get a Non-Renewal notice from your Insurance Carrier? The first thing you need to do is act on it. Do not wait until the last minute to work on your new home policy. The Insurance Carriers send those notices out in upwards of 60 days before your non-renewal date in order for you to find coverage elsewhere. If you are in a high fire risk area and wait until the last minute it may take longer to find coverage and you would risk having a lapse in coverage.
If you have an Independent Agency like ourselves, give them a call. They will most likely be aware that you have been Non-Renewed and are working on quoting the policy already with their other carriers. If not have them start to look at their other carriers to find another option. If you do not have an Independent Agency contact your carrier to discuss options they have available for you.
Start shopping for quotes, obtaining them online or over the phone. Make sure you give yourself options and make sure you understand the coverage you are purchasing. The good news is that you will be able to find coverage, but the bad news is that it may be expensive. The last resort is purchasing a fire policy with the California Fair Plan and a Difference in Conditions (DIC) policy. Together these policies create a complete homeowner’s policy. The California Fair Plan will cover your home for the loss of a fire with very limited coverage for smoke damage. The DIC policy covers what the Fair Plan does not. The policy provides coverage for theft, vandalism, malicious mischief, liability, medical, water damage from a covered loss, etc. Again the rates for these policies are high.
Talk to your neighbors! Where is their home insured? Are they being non-renewed as well? Many carriers may not be setting policies to Non-Renew, but they might stop writing policies in your zip code altogether. Insurance Companies could set a moratorium for your zip code, meaning that they will not take any more policies in that area. Or the moratorium may exist because there is an active wildfire in that area. So if you are being Non-Renewed and your neighbor isn’t and you contact their insurance company for a quote, they may not be able to take your home.
Stay in constant work mode and communicate with your agent throughout the whole process until you find a replacement policy and have bound coverage. You do not want to risk your policy Non-Renewing and then having a lapse in coverage. Sometimes it does take longer to quote a policy in a higher risk area and the underwriters will require additional information or mapping. So again, make sure you give yourselves plenty of time.
Ask for discount options or multi-policy packaging! Maybe the home premium is higher but you could save annually by packaging it with the auto policy. Try a higher deductible which could help reduce the premium! Ask for options to save money and decrease the premium!
If you get a Non-renewal notice due to brush, know that you are not alone! Be proactive and prepare that you may have a higher home insurance premium. Give yourself options and make sure you understand what you are purchasing! If you have received a Notice of Non-Renewal give us a call (916)985-7500 or send us an email firstname.lastname@example.org and we can start quoting your home!
A: 201 Natoma St Folsom, CA 95630
P: (916)985-7500 F: (916)985-7302 T: (916)970-9349