California fire insurance companies decline almost 350,000 policy renewals

California fire insurance companies - Firefighters fighting wildfire

Insurers are taking big steps back from the industry in the state’s highest risk areas.

New data from the state shows that California fire insurance companies have declined the renewal of almost 350,000 home policies since 2015. This was most common in areas with the highest wildfire risk.

The data showed that insurers are trying to reduce their risk exposure as wildfires become more costly.

The newly released data did indicate that California fire insurance companies have dropped hundreds of thousands of customers. However, it did not point out how many new policies were issued. Moreover, it also didn’t reveal how many customers were able to find policies elsewhere, nor how much that cost compared to the coverage they used to have before their renewals were refused.

That said, the data did reveal the total new and renewed insurance policies within the high risk areas for wildfires during the period of 2015 until 2018. Homeowners, regulators and lawmakers have all voiced concerns regarding the impact of wildfires on coverage availability and premiums.

Wildfires have been a growing problem in the state and have been leading to rising premiums in the areas where the blazes have been the most destructive. This new data is important as the state was not collecting it before 2015. Therefore, this limited view is the widest perspective available regarding wildfire coverage and renewals in the Californian home insurance market.

California fire insurance companies are currently requesting rate increases “in record numbers.”

According to insurance department consultant, Joel Laucher, who spoke with lawmakers last week, insurance companies are requesting rate hikes “in record numbers.” In 2015, the state’s insurance department received 25 homeowners rate increase requests. Last year, that number had soared to 69 requests. There is every reason to expect that there will be even more requests in 2019.

That said, the insurance industry pointed out that there has been a relatively steady rate of non-renewed policies year over year. It also stated that many California fire insurance companies continue to offer coverage even in areas of high wildfire risk. The data indicated that there were about 33,000 policies California fire insurance companies - Firefighters fighting wildfirethat were not renewed within high risk zip codes in 2015, as well as in affected areas in 2017 and in areas where mudslides happened in Southern California early last year.

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