Some policyholders are finding that their insurers are choosing not to allow coverage to continue.
At the same time that many homeowners insurance customers are discovering the peace of mind that their policies can bring as the wildfires in California continue to creep ever closer to their homes, others are finding that if their policies are up for renewal, it may not be possible to continue their coverage.
It is clear that this is a stressful time for the people living near the wildfires, and this is making it worse.
While some homeowners insurance policyholders are receiving phone calls with assurances from their insurers that mitigation teams are being sent in – for free – to help to protect their homes, others are being contacted so that they know that their insurers are electing not to allow coverage to renew. The zones are being deemed wildfire areas and are disqualifying the homes from being able to obtain further coverage.
The zoning changes can force homeowners insurance companies to drop some of their long time customers.
There have been instances reported in which customers of over a decade who have never filed claims and who have multiple types of policies are being told that they will need to seek their home insurance elsewhere. This may appear harsh, but it isn’t just a matter of insurers slashing away customers just because of a one-time event.
According to a statement released by Nancy Kincaid from the California Department of Insurance, it is perfectly within the rights of the insurer to decide whether or not a policy will be renewed when it is for the coverage of a home that is located within an area designated as having a high wildfire risk.
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She stated that “It’s not unusual, especially in wildfire areas to see an insurer who may have a concentration of business in the area to limit their underwriting, which means they start restricting how much business they have in a particular area.”
Those providers give their customers fair warning, well ahead of the policy’s expiry date, so that the policyholder will be able to find alternative protection. In this state, this could include the California Fair Plan for high exposure properties.
This is coming as little consolation to the homeowners insurance customers who are now finding themselves having to scramble to find coverage elsewhere. Considering what they have been through and that many are only just returning home after an evacuation, they are also finding that the timing may have been more carefully considered.