INSURANCE NOTICE: “Your property does not meet our wildfire eligibility guidelines… We will not renew this policy when it expires.”
Have you received a notice like the one above? Insurance companies are increasingly dropping policies of California customers with notices of non-renewal like these. However, your non-renewal notice may be a mistake. And depending on the circumstances, your policy may still be protected by California law.
California Senate Bill 824 prevents insurers from canceling or not renewing a policy during the year after a state of emergency declaration. Additionally, the Bill also prevents insurers from giving notice of their intention to end the policy. Together, with existing notice requirements, this means insurance companies must wait one year and 75 days after the declared emergency date before sending their customers a notice of non-renewal. If you receive a non-renewal notice before a year and 75 days, your notice is premature.
In the event you receive a premature notice, the California Department of Insurance recommends that you notify your insurance company to seek reinstatement of your policy. If your insurer fails to correct their mistake, the California Department of Insurance encourages Californians to file a Request of Assistance through the Department of Insurance website.
Unfortunately, correcting a premature notice does not prevent the insurance company from eventually canceling your policy coverage at a later date. Insurance companies are free to reissue a new non-renewal notice once the year and 75-day timeframe passes. Does this mean you’re completely out of luck? Not quite. Californians unable to secure insurance due to fire risk can still apply for FAIR Plan Property Insurance. The FAIR Plan is meant to provide Californians a temporary safety net of coverage until more permanent coverage from a traditional insurance company becomes available. In the wake of the devastating California wildfires over the past decade, large numbers of Californians have been pushed out of traditional markets and turned to the FAIR Plan to receive coverage. The best way to apply for the FAIR Plan is through the FAIR Plan website.
While Senate Bill 824 and the FAIR Plan provide some options for Californians who have had their property insurance canceled due to wildfire risk, many argue more robust protections for customers are needed. The frequency and scope of California wildfires is growing at a troubling pace. So too are the number of Californians adversely impacted. Several members in the California legislature are receptive to these concerns and momentum for reform is growing. Whether new legal protections for Californians actually take shape remains to be seen, but Singleton & Schreiber will continue to watch and update our readers on future developments.