Uninsured and Wildfires

– Crystal Vagnier – Select Group – Writer/Editor

When the unthinkable happens, like a devastating forest fire ravaging your home and personal belongings, one shouldn’t have to add the fear of losing their insurance on top of their concerns. After all, the point of having insurance is precisely for moments like these, but many California homeowners are facing precisely that predicament. With changing weather patterns and drier conditions, many insurers are depending on new technology to manage risk by examining brush cover and topography as opposed to an area’s history with wildfires.

Massive claims, reaching into the billions, are hitting insurance companies hard due to the recent atypical fires plaguing northern and southern California. Traditionally, companies would examine high-risk zones, but with revised expectations of when and where a fire can happen, state law is now making it possible for companies to drop coverage instead of raising rates. In fact, many Northern California homes have been cut and dropped already. “There are currently no laws in California that prohibit an insurer from non-renewing a homeowner’s insurance policy, California law does provide consumers with specific rights in the event of a non-renewal,” the California Department of Insurance’s website states.

The insurer’s stance is maintaining their capabilities to pay out homeowner’s claims. But for the insured, finding oneself dropped from an integral insurance policy can be dangerous. Some homeowners can luck out by opting into a specialty insurer (“surplus line carriers”) for policies 20-40% more than a typical insurer. Some homeowners have found themselves dropped from their Liberty Mutual coverage after a wildfire broke out in the region. You’ll find that some insurers, like State Farm and Farmers, have become pickier about what and where they cover while others, like Allstate, have altogether stopped writing new policies.

The Google Crisis Map is a useful resource for people to check out the history and up-to-date status on wildfires in the area, depicting traffic, shelters, and topology. As a last minute resource, California does offer a fire insurance policy that is more expensive and less comprehensive, called the California FAIR Plan, for those in high-risk areas.

Take the time now to review your current policy before the unexpected happens.