It is not uncommon for a policy to be non-renewed by one company and accepted by another when different wildfire models are used in the decisioning. Many factors impact a property’s wildfire risk and exposure to loss. Every modeler includes the factors believed to be most relevant in predicting wildfire loss. When models rely on different factors, they can get conflicting results. Consequently, the vast majority of non-renewals find replacement coverage in the admitted market without being forced to the FAIR plan as a last resort.
Insurers cite various reasons for the recent uptick in non-renewals, but it all boils down to the carrier’s lack of confidence in the ability to charge enough premium to pay expected future costs. The most common reasons are:
(1) an inability to determine expected future costs; or
(2) an inability to charge sufficient premium for expected future costs because of regulatory or other market pressures.
In both instances, the carrier will look to control the risk through a Non-Renewal Notice informing the policyholder that a renewal offer will not be provided, and coverage will cease at policy expiration.
Most people take that as a sign to move on, but that’s NOT the only option. Property owners can also appeal the underwriting decision and ask for the renewal to be issued. An Underwriting appeal may be successful when:
(a) the underwriter relied upon inaccurate information to make the non-renewal decision
(b) the underwriter relied upon accurate information, but neglected to consider relevant facts
(c) the underwriter relied upon accurate information and considered all relevant facts, but those facts have since changed.
When the Non-renewal is issued because of wildfire risk, the policyholder has the right to inquire about the reason for the non-renewal.
(a) Ask how they determined your structure to be at risk.
(b) Ask if they considered all of the data that is relevant to your risk. If it’s wildfire, then they must consider everything listed on www.blackswan4score.com.
(c) Ask what date their information was last updated.
The rest is easy. Go to our www.blackswan4score.com to log in and compare what they send you to the information we compile on your behalf. If you want us to help with your UW appeal, just let us know in the comment section. If you prefer to handle it on your own, you can download the information and verbally appeal the decision by calling the agent, underwriter, or Customer Service. The Department of Insurance Complaint will be handled in the same way. We can submit the Request for Assistance on your behalf, or you can call the Consumer Division of the California Department of Insurance at (800) 927-4357, or (800) WAP-HELP for those of us who remember rotary phones. (WAP stands for Wireless Access Point.)
When the Department of Insurance receives your request, they will ask the insurance company many questions, including (a) – (c) above. If the company does everything correctly and the Department can’t find a reason to force the rescission of the Non-renewal, this will be categorized as an unjustified complaint. Otherwise, it’s likely to be a justified complaint—something insurance companies care about greatly. The goal is to have zero justified complaints, and often bonuses are tied to the result. Consequently, an insurance company is usually pretty open to making a change that will benefit you.
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