After a series of devastating wildfires in Northern California, many homeowners are learning they may face changes to their insurance. According to Insurance Commissioner Dave Jones, there will be an increase in homeowners who will be dropped by their insurers and face increased costs for fire cover, reports KCRA 3.
Jones attributes the four-year drought and climate change to the increased fire activity in the state. He told KCRA 3 that the changes have led to "greater fire severity and greater losses."
Insurance companies are currently analyizing their risk to determine how much they can absorb. Because of the increased risk of damaging wildfires, many carriers are dropping insureds in areas with a high risk of fire -- namely, areas surrounded by flammable vegetation and with certain wind patterns. State law allows insurance companies to decide which properties are renewed and which aren't, says KCRA 3.
Jones told KCRA 3 that homeowners who receive a nonrenewal notice can use this as an "opportunity" to shop around for other coverage. He also says the California Office of Insurance has the power to review the assessment models used by insurers to determine they are being fairly implemented, and encourages homeowners to give the office a call.
There is a secondary insurance market that specializes in higher-risk policies, and California also has its FAIR plan, which is a safety net that guarantees minimal home and fire coverage.
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