As we head into 2025, new regulations from the Department of Insurance will go into effect. It remains to be seen if insurance carriers come back into the admitted market, and if so, when. While we wait, many CA insurance companies are still issuing non-renewals of property policies to reduce their risk, even in areas that have no fire danger. Non-renewals are sometimes out of your control, but here are some things you can do to try to prevent a non-renewal:
1. We strongly recommend all property owners keep their homes up to date because:
- As a preventative measure, it may help you avoid non-renewal.
- Updates may be required as a condition of your next renewal.
- If you are currently in the FAIR plan or with a non-admitted carrier, you are more likely to qualify for an admitted policy when it becomes available.
- If you are non-renewed, most carriers have very restrictive underwriting guidelines for new coverage.
Keep in mind:
- Most carriers, and even the FAIR plan, will not give full replacement value for a roof more than 25 years old, and, preferred carriers may not insure you at all. (For some, flat roofs can't be more than 10 years old).
- You must not have any trees or brush close to the roof or the house. Make sure no trees overhang the roofline, and that there is no debris on the roof or in the gutters.
- Few carriers will accept galvanized plumbing, they want all copper. No carriers, except for the FAIR plan, will accept old electrical knob and tube or fuse boxes.
- Your furnace must be less than 35 years old.
- Make sure your yard is free from debris, trip hazards, and that the exterior of the home has no peeling paint or dry rot. If you do get a new insurance policy, the carrier will send out an inspector within 30 days.
- The policy may be canceled if the property has any of the above hazards.
2. Make sure your policy doesn't expire due to non-payment. If you don't pay by the day before your policy expiration date, you may lose your policy. As a safeguard, enroll in auto pay with a checking account, or make sure the payment is made by your lender before your expiration date. If they don't pay, you may lose your policy. You are ultimately responsible to pay the insurance bill, not your lender.
3. Don't file claims, if at all possible. Everyone says, what is insurance for if I can't file a claim? We understand, and you can, but there will be repercussions. For example, if you file a claim that is denied, or if the damages are lower than your deductible, not only will your loss not be covered, the claim will be on your record for years. Claims will follow you, even if you move to another carrier. When a claim results in no money paid out, the fact that you filed a claim will be a strike against you. We have found it difficult to move a home to a new carrier if the home has a claim that is less than 7 years old, and water claims are the biggest red flag for insurers. Get a water sensor, and/or a water shut off valve. Bottom line: call your agent for advice before filing a home claim.
4. Open every letter, email, and take every call by your insurance company, or your agent. You may get a letter stating conditions for your next renewal, and if you do not comply, the carrier will non-renew your policy. Respond as quickly as possible, and do not wait until the last minute.
5. If you do get a non-renewal, there is usually nothing you can do to reverse the decision by the insurance company. Check with your agent, and we will start the process of looking for new coverage immediately. Due to current market conditions, most carriers are overrun with applications and quote requests. Contact us if you have any questions