After several years of unprecedented wildfires in California, homeowners are facing challenges in securing or maintaining fire insurance coverage. In response to the escalating risks, some insurance companies have refrained from issuing new policies, implemented substantial premium increases, and left property owners concerned about the possibility of losing their coverage. Here are essential tips to help those affected maintain their existing insurance plans or, if necessary, find new ones.
Tips for Homeowners in Wildfire Zones:
- Know Your Rights!
If your insurance company is not renewing your policy, they must provide written notice at least 45 days before the expiration date. In case you don’t receive proper notice, contact the California Department of Insurance (DOI) at 1-800-927-HELP or online at www.insurance.ca.gov. Check if your policy includes a guaranteed renewal provision or if you are entitled to renewal under laws applicable to homes lost in a declared disaster. - Contact Your Insurance Company Immediately
Upon receiving notice of a rate increase or non-renewal, reach out promptly to explore fire-hardening steps that may influence the company’s decision. - Consider Working with an Insurance Agent
To expedite the process, consider working with an insurance agent. The DOI website has a tool to help find insurance agents and brokers, ensuring you conduct a thorough search of all available options. - Check for Policies from Admitted Insurance Companies
Admitted insurance companies are backed by the California Insurance Guarantee Association (CIGA), offering protections if the carrier becomes insolvent. Refer to the Residential Insurance Contact List on the DOI website for a list of admitted insurance companies. - Ensure You Are Not Underinsured
Before selecting a policy, confirm that it covers the likely cost to rebuild your home in compliance with current building codes. Consider insuring your property for replacement cost value, not just depreciated, actual cash value. - Compare Types of Coverage and Limits
Ask your insurance agent about policy details, such as coverage for rebuilding to pre-loss conditions, demolition and debris removal, and coverage limits on temporary rent and expenses during repairs. - Check Surplus Lines Insurance Options if Necessary
Surplus lines (non-admitted) carriers may provide flexible offerings, though without CIGA protection. If unable to obtain insurance from an admitted carrier, consider a surplus lines carrier. Verify their overall financial strength through services like A.M. Best at www.ambest.com. - Use the FAIR Plan as a Last Resort
If no other options are available, contact the California FAIR Plan at 1-800-339-4099. Keep in mind that FAIR Plan policies can be expensive and cover specific losses by fire and smoke. Additional insurance, such as Differences in Conditions (DIC), is needed for other perils like theft and liability.
In the face of wildfire challenges, homeowners can navigate insurance complexities by staying informed, acting promptly, and exploring all available options. Remember, knowledge and proactive steps are key to ensuring your property remains adequately protected.