10 Tips for Finding Residential Insurance in California

Receiving a notice from your home insurance provider that they are dropping your policy can be more than a deeply unsettling experience, leaving you to feel like your largest investment - your home - is now at serious risk. These unexpected policy cancellations have become increasingly common for homeowners across the country as the insurance industry grapples with the fallout from a rise in extreme weather events and natural disasters. In states like Florida and California, which have been hit hard by hurricanes, wildfires, and other catastrophic events, several major insurers have simply stopped offering new policies altogether, unwilling to take on the financial risk.

Even for those homeowners fortunate enough to still have active coverage, the skyrocketing cost of premiums has put a severe strain on their household budgets, forcing them to make difficult decisions about whether they can continue to afford adequate protection for their property. And the insurance woes don't stop there - the lack of available and affordable coverage options has also made it significantly more challenging for many homeowners to sell their homes, as prospective buyers become wary of taking on the risk of insuring a property in an unstable market.

With so much uncertainty surrounding the future of the home insurance industry, homeowners across the country now find themselves having to navigate a complex and rapidly-evolving landscape, often with little time to thoroughly research their options before being forced to make critical decisions about protecting their most valuable asset.

As an insurance policyholder, it's important to be aware of your renewal date - that is, the date on which your current policy is set to expire and potentially renew for another term. Typically, your insurer is required to notify you one to three months in advance if they have decided not to renew your coverage. This advance notice gives you a critical window of time to shop around and find a replacement policy before your existing one lapses. Even if your insurer does opt to renew your coverage, that doesn't necessarily mean the cost will stay the same.

In fact, for many property owners, the renewal premium can increase by 3x more per month. Your insurer is generally required to inform you of the new rate about a month before your renewal date, so you have time to review and decide whether to accept the higher cost or seek out a more affordable alternative.

If you do receive a non-renewal notice, it's worth reaching out to your agent or the insurance company directly to inquire about the reasons behind their decision. In some cases, a polite conversation and some persistence on your part may convince the insurer to reverse course and agree to renew your policy after all. Having that advanced warning and opportunity to negotiate can make all the difference in ensuring you maintain continuous, cost-effective coverage for your home, vehicle, or other insured assets.

Ask to see the report! Some insurance companies are using drones, a visit or drive by to access your property, some may not look at your property at all.

For those struggling to find affordable homeowners’ insurance, especially in high-risk areas, many states offer a helpful alternative through Fair Access to Insurance Requirements (FAIR) plans. These state-run insurance programs are designed to provide basic coverage options for homeowners who have been unable to secure a policy from a private insurance company. FAIR plans are a crucial safety net, ensuring that all residents can access at least a minimum level of protection against catastrophic events like fires, storms, and other natural disasters, even in regions that private insurers have deemed too risky or unprofitable to serve.

While FAIR plan premiums are typically much higher than standard homeowners policies, they offer an important backstop for those who would otherwise be left without any insurance at all. After obtaining FAIR plan coverage, it's important to promptly notify your mortgage servicer of the change. This allows you to cancel any force-placed insurance that your lender may have previously required, since you now have your own active policy in place. Accessing a FAIR plan is an invaluable option for homeowners who have struggled to find affordable insurance through the private market, providing much-needed peace of mind and protection for your most valuable asset.

In a proactive move to protect both its residents and the insurance industry, the state of California has established a groundbreaking Wildfire Fund that is providing a robust safety net for the future. Funded by a small monthly contribution added to individual power bills, this innovative fund is quickly amassing a substantial war chest to safeguard against the devastating financial impacts of wildfires. Currently standing at an impressive $13.5 billion, the Wildfire Fund is poised to grow even larger, with state law allowing it to eventually reach a colossal $21 billion in total assets.

This means that when catastrophic wildfires inevitably strike California's dry, fire-prone landscapes, the insurance companies tasked with covering the immense damages will have a reliable source of reimbursement, shielding them from potentially ruinous payouts that could cripple the industry. By spreading the financial burden across all electricity customers, the Wildfire Fund ensures that the risk is shared broadly, creating a robust safety net that will protect both homeowners and insurers alike. As climate change continues to intensify the frequency and ferocity of wildfires, California's proactive approach to managing this growing threat through the Wildfire Fund stands as a model for other fire-prone regions seeking to safeguard their communities and economies in the face of this escalating natural disaster.

Making home improvements that enhance the safety and security of your property can have a significant impact on your homeowner's insurance policy. Installing a fire alarm or security system, for example, demonstrates to your insurer that you are proactively mitigating risks, which could make them more inclined to renew your policy and may even result in a reduction in your premiums. Beyond just alarm systems, other home upgrades that reduce the likelihood of loss can also be beneficial.

Strengthening your roof to better withstand high winds, severe storms and fire damage, or updating aging plumbing, electrical, and HVAC systems, can go a long way in protecting your home. This is especially important given the forecasted increase in extreme weather events driven by climate change. As these natural disasters become more frequent and intense, insurers will be looking for policyholders who have taken concrete steps to harden their homes against potential damage.

By making strategic improvements, you can not only safeguard your property, but also position yourself as a more attractive, lower-risk customer in the eyes of your insurance provider. It's always a good idea to consult directly with your agent or insurance company to explore the specific options and potential savings available for your unique home and situation.

It's no secret that the insurance landscape has been shifting in recent years, with a growing trend of insurers becoming increasingly selective about the residential properties they are willing to cover, particularly in areas deemed to be at a higher risk of wildfires. This phenomenon has left many homeowners in a precarious position, struggling to secure the necessary coverage to protect their most valuable asset.

While the Department of Insurance may not have the legal authority to dictate where insurers must write policies or what level of risk they must accept, they do play a crucial role in ensuring a fair and transparent process. Their responsibility lies in closely monitoring the decision-making of these insurance providers, scrutinizing their rationale to verify that their actions are grounded in objective assessments of risk, rather than being influenced by any undue biases or ulterior motives.

This oversight is paramount, as the repercussions of insurers' choices can have far-reaching implications for entire communities, potentially leaving vulnerable residents without the safeguards they need to weather the unpredictable and often devastating effects of natural disasters. By maintaining a vigilant stance and upholding the principles of consistency and risk-based decision-making, the Department of Insurance can help to strike a delicate balance, safeguarding the interests of both insurers and the insured, and promoting a more resilient and equitable insurance landscape for all.

Information Below from the California Department of Insurance

1. If you get a nonrenewal notice, contact your insurer and ask if there are any specific actions you could take to mitigate your risk and retain your coverage.
2. If you think your nonrenewal was unfair, you may file a complaint with us.
3. Don’t let these actions delay starting your search for a new insurer. Make sure you have done everything you can do at your property to mitigate fire risk then start shopping for coverage.
4. In addition to contacting local agents or brokers in the vicinity of your home, you may wish to use our Residential Insurance Company Contact List that provides toll free numbers for over 50 insurers that are licensed to sell homeowners insurance.  You can contact each of them to find the closest agent or broker or, in some cases, get a quote from them directly.
5. If you need help from an agent that speaks a specific language, you can use our Find an Agent or Broker tool to find one near you.
6. You can also utilize our Homeowner Premium Comparison Tool and Homeowner Coverage Comparison Tool to compare premiums and coverages. 
7. If your agent cannot help you find coverage with an insurer other than the FAIR Plan, you or your agent should contact other agents and brokers who represent other insurers. Our Home Insurance Finder tool can help you find other agents in your region or beyond and tells you which insurers they represent.
8. Understand that the California FAIR Plan is available to every homeowner as a last option for coverage. The maximum limit written by the FAIR Plan on a residential property for all coverages combined is $3,000,000. Because the coverage provided by a FAIR Plan policy is limited to losses caused by Fire or Lightning, Internal Explosion and Smoke, it is recommended that you supplement the FAIR Plan policy with a Difference in Conditions policy to obtain protection from other perils not covered under the FAIR Plan policy.
9. If none of these options work for you, you may try obtaining coverage in the non-admitted/surplus lines market. Ask your retail agent or broker if they are able to obtain coverage with a surplus lines insurer. If you need help finding a licensed insurance agent or broker, you can use our Find an Agent or Broker tool to find one near you. 
10. If you prefer to speak live with our staff, you are always welcome to call the Department of Insurance toll free at 1-800-927-4357.
     

The list provided below is reported by insurers based on an annual data call performed by the Department of Insurance at the beginning of each year. The insurance companies listed below are licensed to sell the line of insurance displayed as reported January 2024. However, not all insurance companies will write all properties in all areas of the state. Also, circumstances may have changed since this data call was conducted. Some insurers may not be accepting new business as a result of recent changes in their underwriting guidelines that are not reflected here. We encourage you to call the companies listed below if you are currently shopping for insurance to determine whether they will write your specific property.

Information published from the California Department of Insurance

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