California providers start dropping their high risk insurance customers

High risk insurance - Wildfire in Forest

Insurers have started withdrawing coverage from the most wildfire vulnerable areas.

As wildfire season heats up, insurers across California have started to drop their high risk insurance customers. Homes that are the most vulnerable to wildfire may not be able to find coverage within the state as the flames start to spread yet again this year.

Liberty Mutual and other insurance companies are stepping away from the highest wildfire risks.

This trend could cause a growing number of Californian homeowners to find themselves without wildfire insurance coverage for their properties. As more insurers step away from high risk insurance coverage for customers vulnerable to wildfires, the opportunity for finding a policy continues to shrink.

Moreover, among the types of coverage that are available, the rates are skyrocketing to the point that some homeowners may not be able to afford protection against this peril. Liberty Mutual has already issued letters to some of the homeowners for which it had previously sold wildfire insurance policies. These were labeled as “Notice of Non-Renewal” and told those homeowners that their properties would not be continuing with their prior coverage upon expiry.

The insurers are withdrawing from the high risk insurance customers with several vulnerability factors.

Among the issues identified by the insurance company as reasons for not renewing a policy include the risk of wildfire, of course. That said, other issues are also taken into consideration, such as difficulty of accessibility for emergency vehicles. When combined, these factors can cause a home to be deemed a very high risk. Following previous years of wildfires and the likelihood that this trend will continue, insurance companies are choosing not to renew.

Many customers have said that they are not surprised that this time has come, according to a Insurance Business America report. Customers are now doing their best to shop around in order to find the best coverage possible at the lowest rate for what they require.

Liberty Mutual is only among the insurers that has most recently decided not to cover the high risk insurance properties against wildfire. Earlier in July, AAA of Southern California also stated that it did not intend to renew “very high risk” homes. The State Department of Insurance was already pointing out that “there has been a High risk insurance - Wildfire in Forestsignificant increase in insurer initiated non-renewals in the California counties with the highest proportion of homes located in high-risk-for-wildfire areas,” back in December 2017. That said, now that wildfires are once again underway, the problem this situation could cause for homeowners seems much more potent.

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