Insurance Company Changes in the Home and Auto Marketplace

The last few years have been hard, am I right? It is no secret that home and auto insurance in California is complicated. I feel it, my customers feel it and our wallets feel it too. Yes, premiums have gone up, but now more and more carriers are updating their underwriting and eligibility guidelines and adding additional binding requirements that make it really difficult to quote and issue new business. In some cases we have seen that carriers have made it difficult to retain a current policy!

You may not have experienced any change or major premium difference in your policy but many of you have. Now is the time more than ever to make sure that you as the insured are paying attention to communication from your carrier, your invoice due dates and keeping your policies current. Because, insurance companies are changing. In this blog I’m going to discuss some of the changes we see everyday that will hopefully help to keep us all working together to make sure you are covered.

Over the last few months we have seen insurance companies make some significant changes to underwriting/eligibility guidelines and eliminating certain installment plans for new or rewritten policies. These changes are carrier specific and happening with companies throughout the Insurance Industry and may not apply to your specific carrier. This is why it is important to keep an eye on your policy, invoices, due dates, and all other communication from your carrier.

Carrier Changes in the Auto Insurance Market Place

  • Several auto insurance carriers are becoming much stricter on annual mileage. Mileage trends in California have shown that mileage has increased to pre-pandemic levels. Many carriers already have programs that use third party data to pull odometer history and calculate the exact mileage you are driving. Sometimes this isn’t accurate and if there is an error proof is needed by underwriting to correct the error if possible. If documentation is not received the carrier will establish a mileage amount for you.
  • Many carriers have eliminated all payment plans except a full pay or a two-installment plan on new business or rewritten auto policies. Carriers will honor your current installment plan if you have one already in place, but if the policy cancels due to non-pay or underwriting reasons you will have to be rewritten and subject to the new installment plans.
  • Some carriers now have ZERO grace periods for renewal payments. If your payment is not received by the renewal date or a payment is returned by your bank the policy will cancel and will have to be rewritten with the new installment plans available.
  • If an auto policy cancels and must be rewritten, not only will the new policy be subject to the new installment options, but underwriting may require the quote to be sent for review with binding requirements which can take up to 14 business days to be reviewed. This can also happen on new business. If you are issuing a new policy the new quote can be paused at random by the carrier and ask for binding requirements before you can issue a policy that again can take up to 14 business days.
  • Binding requirements can include photos, mileage proof such as service reports, utility bills as proof of residence, proof of employment, proof of any discounts and proof of non-fault accidents if necessary.
  • If you have a lapse in coverage some preferred carriers will no longer write a policy for you and will require at least six months proof of continuous coverage. Carriers that will take a policy with a lapse are typically non-standard or have a higher rate.

Carrier Changes in the Home Insurance Market Place

  • Some companies are requiring more proof of Defensible Space in locations that you wouldn’t think are in a higher risk area for wildfire. Photos along with proof of trimmed trees/bushes, updated landscaping, maintenance etc. of your home could be required for review. Upon review, underwriting may require additional maintenance done to the home, or they could decline the quote or set the policy to non-renew. Sending in proof does not always guarantee they will approve the property.
  • Many carriers have closed entire zip codes for new business and if a policy cancels due to non-pay or underwriting the options for replacement coverage could be more expensive. If you live in a higher risk area for wildfire, keeping your current policy active as long as you can will be your best option. If a policy cancels in those higher risk areas the only option you may have is with the California Fair Plan, a higher premium policy that is only for fire along with a Difference in Conditions policy that covers the remaining perils such as theft, liability etc.
  • Proof of major systems updates may be required with certain carriers, and if not received and approved could result in a non-renewal. Due to the loss history in California over the last few years, carriers are wanting to make sure that homeowners maintain and update their homes to help avoid a future loss. If your home is older your insurance carrier may require proof of updates such as heating/cooling systems, roof, plumbing and electrical. Some carriers are no longer accepting new home policies with a roof, heating, plumbing and electrical systems that are 25 years or older. Carriers may make an exception if documentation is received.

Changes with all carriers and their guidelines do happen and happen often. Again, you’ll want to check with your current carrier on your policy to see if any of these apply to you. Keeping your policies current and up to date with payments, and underwriting requirements will help to avoid any potential cancellation due to non-pay or for underwriting purposes.

Bill Pay Warnings

If you are an insured that makes payments using Bill Pay from your bank, make sure you are selecting to have your payments sent well in advance and to the correct billing address. Many times carriers change their billing address. You can tell this information from your invoice. Make sure you edit and check the address you are sending your payment to. Bill Pay does take the funds out of your account, however, the bank sends the payment in the form of a check which can take longer to deliver to the company. This could cause a potential problem if the check is not received on time. If you are one of our customers you can always give us a call to make your payment over the phone or contact your carrier directly.

Now more than ever it is most important to watch for communication from your carrier about your specific policy. If there is a question on the documentation you receive contact your agent. If you would like for American Diversified to quote your policies and be your agent please contact our office for a quote at (916)985-7500 or head to our website at www.amerdiv.com to start your free quote. We are an Independent Agency so we work with several carriers to provide customers a choice, and options. Our goal is to keep you protected, and informed!

American Diversified Insurance Services, Inc is an Independent Agency for personal lines insurance located in El Dorado Hills, CA. Family owned and operated for over 30 years in California. We live here too and know the market, contact us today for a quote!

1190 Suncast Lane Ste 6 El Dorado Hills, CA 95762
P: (916)985-7500 F: (916)985-7302 T: (916)970-9349
E: info@amerdiv.com W: www.amerdiv.com

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