You open your mail and see the words no California homeowner wants to read:
“NOTICE OF NON-RENEWAL.”
Your insurance company has decided not to renew your homeowners policy.
Now what?
First, don’t wait until your policy expires. And don’t automatically assume the California FAIR Plan is your only option.
California’s home insurance market has become increasingly difficult, but homeowners may still have several options depending on the property, location, condition and reason for the non-renewal.
At StarWest Insurance Services, we specialize in helping California homeowners navigate difficult-to-place home insurance situations.
Why Are California Insurance Companies Non-Renewing Homes?
There isn’t one single reason.
An insurance company may decide not to renew a homeowners policy because of its underwriting guidelines, the characteristics of the property or the insurer’s overall exposure in a particular area.
Common issues can include:
- Wildfire or brush exposure
- Roof age or condition
- Trees or vegetation near the home
- Prior insurance claims
- Electrical systems
- Plumbing
- Property condition
- Aerial or satellite inspection findings
- Changes in an insurance company’s underwriting guidelines
- Concentration of properties in a particular geographic area
Sometimes the homeowner hasn’t filed a recent claim and has paid premiums for years.
That can make a non-renewal especially frustrating.
But a non-renewal from one insurance company does not necessarily mean every insurance company will decline your home.
How Much Notice Should I Receive?
California has specific requirements regarding residential insurance non-renewals.
In many circumstances, insurers must provide homeowners advance written notice before a policy is non-renewed. The exact requirements can depend on the circumstances, so homeowners should carefully review the effective date and reason stated in the notice.
The California Department of Insurance provides consumer information for homeowners facing cancellation or non-renewal.
The most important thing: don’t put the letter aside and deal with it later.
Every day matters when you’re trying to replace coverage.
Step 1: Find Out WHY You’re Being Non-Renewed
Read the entire notice.
Don’t just look at the expiration date.
Look for the insurance company’s stated reason.
For example:
“Roof condition.”
That’s a very different problem from:
“Wildfire exposure.”
And that’s different from:
“Underwriting eligibility.”
Understanding the reason helps determine what options should be explored next.
Step 2: Don’t Automatically Replace Your Roof or Make Expensive Repairs
Suppose your insurer tells you:
Replace your roof or we won’t renew your policy.
Before spending $15,000, $20,000 or more solely to satisfy that particular insurance company, find out whether another insurer may accept the property.
Different insurance companies have different underwriting guidelines.
One company may decline a 20-year-old roof while another may consider it depending on its actual condition, material and other property characteristics.
If the roof genuinely needs replacement, replacing it may certainly be the right decision.
But it’s worth understanding your insurance options before making a major expenditure solely because one carrier requested it.
Step 3: Get Your Documents Together
When you contact us, having the right information can make the process much faster.
Start with:
- Current homeowners insurance declaration page
- Non-renewal notice
- Property address
- Current annual premium
- Desired effective date
- Mortgage company information, if applicable
- Approximate year the roof was replaced
- Information about major renovations
- Details about previous insurance claims
We may also need photographs or additional underwriting information depending on the insurance company.
Send us the non-renewal letter.
One of the easiest ways for us to start is to see exactly what your existing insurance company is telling you.
Step 4: Shop the Standard Insurance Market First
The California FAIR Plan shouldn’t necessarily be your first stop.
Depending on your property, there may still be traditional insurance companies willing to offer coverage.
This is one of the advantages of working with an independent insurance agency.
Instead of representing only one insurance company, StarWest can explore multiple available insurance markets.
A company that won’t insure your neighbor’s house may still consider yours.
Every property has to be individually evaluated.
Step 5: Consider Specialty Insurance Markets
What happens when traditional carriers won’t accept the property?
There may be specialty insurance options.
These markets can sometimes accommodate properties that fall outside standard insurance-company guidelines.
Examples could include homes with:
- Higher wildfire exposure
- Unusual construction
- Older systems
- Previous losses
- High replacement costs
- Unique ownership situations
- Other difficult underwriting characteristics
Premiums, deductibles and coverage can differ substantially, so it’s important to compare more than just price.
Step 6: Consider the California FAIR Plan When Necessary
If reasonable coverage isn’t available through the traditional market, the California FAIR Plan may become an option.
But there’s something homeowners need to understand:
The FAIR Plan is not the same as a traditional homeowners policy.
The FAIR Plan primarily provides coverage for specific perils such as fire.
Homeowners commonly pair FAIR Plan coverage with a Difference in Conditions (DIC) or companion policy to provide additional protections that aren’t included in the basic FAIR Plan policy.
That combination is commonly referred to as:
FAIR Plan + DIC
If this is the appropriate solution for your home, we can help you understand how the two policies work together.
Step 7: Don’t Shop Based on Price Alone
This is extremely important.
Suppose your current policy costs $5,000 and another company offers coverage for $3,800.
Great, right?
Maybe.
Before switching, compare the coverage.
Look carefully at:
- Dwelling coverage
- Extended replacement cost
- Personal property
- Loss of use
- Personal liability
- Water damage
- Deductibles
- Roof settlement provisions
- Ordinance or law coverage
- Water backup
- Loss assessment, when applicable
- Special limitations and exclusions
Saving money is great.
Saving money by unknowingly giving up important coverage isn’t.
My Insurance Company Says My Home Is in a Wildfire Area. What Can I Do?
This has become one of the biggest challenges facing California homeowners.
Even homes that have never experienced a wildfire loss can face underwriting restrictions because of their geographic exposure.
If wildfire risk is the reason for your non-renewal, we’ll look at available markets and determine which insurers may consider the property.
You should also document wildfire mitigation improvements around your property.
Depending on the property, these may include:
- Defensible space
- Class A fire-resistant roofing
- Enclosed eaves
- Ember-resistant vents
- Vegetation management
- Removal of combustible materials near structures
- Other home-hardening improvements
Mitigation doesn’t guarantee that a particular insurer will accept a property, but it can be important when evaluating your insurance options.
What If My Insurance Company Used an Aerial Photograph?
Insurance companies increasingly use aerial or satellite imagery when evaluating properties.
Sometimes those photographs identify legitimate concerns.
Other times, the information may be outdated or may not accurately reflect the current condition of the home.
If you’ve recently:
Replaced the roof, trimmed trees, removed vegetation, completed repairs or renovated the property, keep documentation.
Photographs, invoices, permits and contractor records may help establish the property’s current condition.
What If I Think the Non-Renewal Is Wrong?
Don’t simply ignore it.
Contact your insurance company or agent and ask for clarification.
If the concern involves incorrect information, provide documentation showing the current condition of the property.
California homeowners can also contact the California Department of Insurance for consumer assistance when they believe an insurer has acted improperly.
But while you’re disputing the issue, you should still work on replacement coverage.
Don’t assume the non-renewal will be reversed and allow the policy to expire without a backup plan.
Don’t Let Your Home Insurance Lapse
If you have a mortgage, your lender generally requires you to maintain property insurance.
If your policy expires without replacement coverage, your lender may obtain insurance to protect its financial interest in the property.
That type of lender-placed insurance can be expensive and may not provide the same protection for you as a homeowners policy you obtain yourself.
Even without a mortgage, allowing a home to go uninsured creates substantial financial exposure.
When Should I Start Shopping?
Immediately.
If your policy expires in 60 days, don’t wait until Day 55.
Starting early gives us more time to:
Review the non-renewal → Identify the underwriting issue → Shop available carriers → Address inspection requirements → Compare coverage → Secure replacement insurance
Some properties can be relatively straightforward.
Others require considerably more work.
Give yourself time.
Received a California Home Insurance Non-Renewal?
We Can Help.
If your insurance company is dropping your home because of:
Wildfire exposure
Roof age
Property condition
Claims
Underwriting changes
Or another eligibility issue…
don’t assume you’re out of options.
Send StarWest your current policy and non-renewal notice.
We’ll review your situation and explore available insurance markets to see what alternatives may be available.
StarWest Insurance Services, LLC
Insurance Made Easy
Auto • Home • Business • Life
Serving California since 1995
714-893-7271
starwestinsurance.com
CA Insurance License #0B83846