Homeowner Advice: What If Your Insurance Carrier Non-Renews You?

Homeowner Advice: What If Your Insurance Carrier Non-Renews You?

Need to Know Now: What to Do if Your Insurance Company Non-Renews You

Practical and sage advice from Lisa Auer, J.D., of Kindred SF Homes

Not only are fewer companies writing new home insurance policies in California, but reports are becoming more frequent of insurers dropping existing customers at renewal time–and not only in wildfire-prone areas. If this happens to you, don’t panic, but act immediately. 

In California, insurers can non-renew for almost any reason, but they must give a minimum of 75-days notice before the policy expires. You likely will need at least that much time to find a new policy you can afford. 

Recently, one of our sellers was notified that the policy on their two-unit building in Cole Valley was not being renewed just as they were preparing to put their condo on the market. Fortunately, they were able to quickly find new coverage for a comparable price. 

Be warned that Safeco Insurance plans to drop over 950 policies in San Francisco and the East Bay when they come up for renewal starting in October, citing the Bay Area’s “significant earthquake risk and the resulting home fires they cause.” I’ve also heard anecdotally that Farmers is non-renewing policies on any tenant-occupied buildings. 

Other reports in the news include Menlo Park homeowners dropped due to their home’s age (it was built in the 1960s), and others for clutter in the backyard, age of the roof, and draining their pool to save water. Insurers are increasingly using aircraft, satellites, and drones to take photos over homes and look for reasons not to renew. In one of these cases, the homeowner was able to submit evidence regarding the condition of the roof and get the policy renewed. 

If this happens to you, first contact the insurance company to find out if there are steps you can take to qualify for renewal. Start looking for new coverage at the same time. It’s best to work with an independent insurance broker (ask us for a referral), rather than trying to get multiple quotes on your own, which can actually narrow the options available to you. Even in this difficult insurance market, you may be able to find replacement coverage at a lower cost. 

Bottom line: Make sure you open all mail from your insurance carrier, and take immediate action if you get a non-renewal notice.

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