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What to know if your wildfire insurance gets dropped

Posted: 4:40 PM, Jun 26, 2019
Updated: 2019-06-26 19:40:23-04
Wildfires ravage Northern California

SAN DIEGO (KGTV) -- Following several years of record-breaking fires around California, the state’s department of insurance is letting residents know they have options if their insurance gets dropped.

Under Proposition 103, a law approved by voters in 1988, insurers are required to file rate changes with the California Department of Insurance. Although the department doesn’t set rates, state law requires that insurers’ rates are based on a demonstrated risk of loss.

New laws that both took effect in 2019 also offer some protection.

One of the laws specifies that homeowners living in a declared wildfire disaster area or adjacent zip codes receive one year of protection from non-renewal.

The state also extended protections against non-renewal for people who suffer a total loss during a fire to two automatic renewals or 24 months.

If you find yourself in the middle of a non-renewal, the department lists specific rights California residents have:

  • The notice of non-renewal must be sent at least 45 days prior to policy expiration.
  • That notice of non-renewal must contain: (1) the reason or reasons for the non-renewal; (2) the telephone number of the insurer's representatives who handle consumer inquiries or complaints; and (3) a statement indicating that if the consumer has contacted the insurer to discuss the non-renewal and remains unsatisfied, the policyholder may have the matter reviewed by the Department.
  • The insurance company must determine whether to renew or non-renew based upon its underwriting guidelines, which must be objective, have a substantial relationship to the risk of loss, and be applied consistently among insureds in the particular group being non-renewed.

For anyone who can’t find insurance, the department has another option. The FAIR plan is available to all homeowners as a last option for coverage. The maximum limit written by the plan on residential property is $1,500,000.

According to the department, insurance companies use different tools and maps to determine high-risk areas around the state.

Click here for a list of resources from the California Department of Insurance.