The struggle continues across California as many people are told their homeowner's insurance will not be renewed.
Many providers are now telling homeowners who live in high-risk areas that are fire-prone or “too densely populated.”
San Francisco is the second-most densely populated city in the United States, and some homeowners this week learned their homeownership policies won't be renewed because of that designation.
A woman who lost her Napa County home in the 2017 Tubbs Fire told NBC Bay Area in an email Saturday that State Farm terminated her insurance last week and she has not been able to find another private insurance company to replace her. . That means she will likely have to buy insurance. The California Fair program receives funding from the state. They are expensive and only cover fires.
State Farm issued a written statement to NBC Bay Area earlier this week announcing its decision not to write new insurance for new homes in California and ending coverage for approximately 50,000 existing California customers. explained.
“This decision was not made lightly, and the State Farm Inspector General continues to be influenced by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations. “The decision was made only after careful analysis of its financial health,” State Farm said. statement.
However, the parent company's latest financial report shows its net assets are more than $134 billion.
“It feels like they're just trying to ratchet up the pressure on the California Department of Insurance,” said Amy Buck of United Policy Holders.
NBC Bay Area spoke with a nonprofit research group about the growing non-renewal problem in fire areas and densely populated areas.
The group said California's premium limits are costing insurers money, with $1.08 spent on claims payments for every premium they receive.
“California, as we all know, is a very high-risk state,” said Mark Friedlander of the Insurance Information Institute.
Friedlander said the California Department of Insurance and Secretary Ricardo Lara are currently updating regulations that could bring more insurance options to the state at competitive prices.
“That means we can charge what is commonly known as an ‘actuarial rate’. That’s not happening today,” Friedlander said.
But Friedlander said it could take years for the California homeowners insurance industry to stabilize even after the new law is enacted.
“But it's not going to happen quickly. It's not going to be a quick fix,” he said.
In the meantime, homeowners will worry about whether today's policies will remain in place tomorrow.
