Amid the devastating wildfires that have ravaged much of the Los Angeles area, many people have already faced the increasingly frequent challenges created by home insurance companies' pulling out of the state.
What's happening?
As detailed by the San Francisco Chronicle last month, homeowners who have taken necessary steps to reduce their level of risk following directives from the insurance industry and the state are still losing coverage.
Ed Wong, a homeowner in Sonoma County, detailed his experience to the Chronicle, explaining that his insurer, Privilege Underwriters Reciprocal Exchange, gave him a list of five upgrades for gas, plumbing, and security systems, three of which were mandatory. Not only did Wong complete all five improvements, but he also took another step to reduce the risk of his home being caught in a wildfire.
Should the government be paying us to upgrade our homes? Depends on how much it costs 🫰 Click your choice to see results and speak your mind. |
Wong spent over $5,800 on the upgrades, including over $2,100 on the wildfire mitigation he chose to do on his own.
Despite his efforts, PURE informed him that his policy would not be renewed in 2025. PURE said in a filing with the California Department of Insurance that was approved in July that it tightened its wildfire risk standards. To make things even more frustrating, Wong said he was never informed of the company's new standards when he was told of the nonrenewal.
"If they knew they were going to drop me, they shouldn't have had me jump through all those hoops. That's what I'm most disappointed at," Wong told the Chronicle.
Why is this important?
Unfortunately, the situation Wong is facing is becoming far too common. In addition to areas with wildfire risks, insurance companies are increasingly dropping policies in places prone to other natural disasters, such as hurricanes, droughts, and floods, which are becoming more frequent and intense as the planet's temperatures continue to rise. (Hurricanes are only becoming more severe.)
For example, Farmers Insurance recently decided not to renew nearly 1,300 policies in Oklahoma because of wildfire risks. Similarly, big-name insurance companies are increasingly pulling their coverage in Florida amid increased risks of hurricanes.
Homeowners who face these sudden changes are often left scrambling to find new, often more expensive, coverage options.
What's being done about this?
Michael Soller, a spokesperson for the Department of Insurance, told the Chronicle in a statement that homeowners in situations similar to Wong's may be able to get their insurer to reverse its decision.
"If the policyholder mitigated the issues raised by the company prior to the nonrenewal, the Department of Insurance expects the carrier to reverse the nonrenewal," Soller said.
Soller added that state regulations require insurance companies' renewal criteria "to be specific, have objective factors, and have a substantial relationship to an insured's loss exposure." Homeowners can call the department's consumer hotline or submit a complaint online to see if they can get their insurance company to reverse the decision.
It's also crucial to invest in risk mitigation early. Making your home more resistant to natural disasters, such as creating a fire buffer zone or removing flammable vegetation, can help you retain or obtain insurance coverage despite living in a high-risk area.
Join our free newsletter for easy tips to save more and waste less, and don't miss this cool list of easy ways to help yourself while helping the planet.