As California's fire season heats up, insurance companies abandon long-time clients – East Bay Times

Frances Mann-Craik enjoys living among the trees along Highway 35. But her quiet life in the mountains above Silicon Valley is about to become much more expensive.

Mann-Craik and a dozen of its neighbors recently received a letter from CSAA, an AAA insurance company based in Walnut Creek, informing it that the company would not renew fire coverage that it had for nearly two decades.

In a letter dated August 20 sent two months before the expiry of its coverage, the company announced that it had amended the requirements for homeowners insurance policies and that, "according to the new requirements, we are no longer able to continue to provide insurance coverage for your property. "

CSAA is not the only insurer to give up its customers. Throughout the Bay Area, from the Berkeley Hills to the Santa Cruz Mountains, insurance companies refuse to renew policies that include fire coverage – pushing families to rush into the fire season to find solutions more expensive and less complete.

"I just feel betrayed," said Mann-Craik.

According to figures released recently by the state's insurance department, nearly 350,000 homeowners' insurance policies have been dropped over the last four years in areas at high risk of forest fires This figure is expected to increase as the market continues to react to the devastating Camp Fire. who crossed paradise at the end of last year.

"Many local communities have explained how the inability to buy insurance could have a domino effect on the local economy, affecting property sales and taxes," said Insurance Commissioner Ricardo Lara. in a recent statement.

It is difficult to know exactly which companies are abandoning their coverage, where and on what scale. CSAA did not respond to specific questions about the number of non-renewal notices sent recently.

"After careful consideration of our exposure, we do not renew a very small percentage of the highest risk insurance policies," the company said in a statement. "Non-renewals are treated with great care and enough notice to give people time to consider their coverage options."

"The information is relatively scarce," said Amy Bach, executive director of the consumer advocacy group, United Policyholders.

In any case, it is becoming increasingly difficult to find good fire coverage at a time when the frequency and ferocity of wildfires in California are increasing.

"All the people in my neighborhood who have AAA have received a letter," said Kathleen Hart, who lives near Mann-Craik and has received one of the dreaded shippers.

Hart is particularly frustrated because, like Mann-Craik, she and her neighbors have carefully removed the vegetation from their properties, which could fuel a hell. They created volunteer firefighter teams and made the roads accessible to firefighters.

However, insurance companies are not obliged to consider such measures when they decide to offer coverage and, in some cases, move away from personalized assessments of individual properties and rely on algorithms to analyze the neighborhoods.

"We are doing everything we are supposed to do for fire prevention and not letting it be known is frustrating," Hart said.

Mann-Craik agrees. The non-renewal letter indicated that his property did not meet at least one of the company's guidelines for nearby flammable vegetation, wind and poor road accessibility. But Mann-Craik pointed out that she had cleared the vegetation and had a long driveway that the trucks regularly use to turn around.

"We are already here to care for each other and our community and to prevent forest fires," said Mann-Craik. "It counts for nothing with the insurance companies."

According to a recent state report on coverage in areas prone to forest fires, most insurers do not consider homeowners' mitigation efforts and consumers have limited opportunities to appeal decisions. Mann-Craik appealed its non-renewal and was refused. She has received quotes from many other companies for projects more expensive than the one she herself has.

For insurers, too much coverage for residents in high fire risk areas can overexpose them. And because the state regulates the rates companies can charge, insurers can not always charge enough to write policies responsibly in fire-exposed areas.

Insurance companies have reasons to be wary. According to a CoreLogic report analyzing the risk of forest fire across the country, more acres burned in California in 2018 than in any other state that year. Forest fire claims in the state in 2017 and 2018 exceeded $ 26 billion, a figure that could increase in the future with the increase in activity of forest fires .

Mark Sektnan, of the American Property Casualty Insurance Association, said that while individual mitigation efforts matter a lot for an earthquake, for fire mitigation, unless all residents of A region are on board, the risk of damage remains high.

"I think there needs to be a major change," he said, but he is more interested in strengthening mitigation efforts than in the new regulations, fearing that companies would be forced to reduce their activities in certain areas.

Still, Matt Price, who lives south of Bear Creek Redwoods Preserve, understands the frustration of his neighbors. It has been abandoned four times by different insurance companies since 2013.

"It seems to happen every two years," said Price.

While non-renewal notices were sent out, the same close-knit community groups that organize informal evacuation drills rallied to share information about insurance. In general, in the quotes reviewed by this news agency, residents see their annual bonuses triple and even quadruple, from under $ 3,000 to over $ 9,000. More and more people are turning to the FAIR plan, a statewide option meant to be used as a last resort.

Insurance companies that want to maintain their business will often offer to continue to purchase auto insurance for customers who have had group coverage in the past, and then complete the limited FAIR plan, according to Bach, of United's underwriters. It may not be the best option, she said, but residents do not know it unless they can spend time and energy shopping.

"I'm lucky because I have time to dive into this business," said Susan Moling, who lives just west of Highway 17 in the area. Riva Ridge and that was focusing on a new policy when a propane tank property for years suddenly became a problem. "It seems that the mere fact of getting quotes from insurers is a moving target."

Brendan Williams, a Los Gatos-based broker who works with different carriers, hears 10 to 15 people a month looking for new fire coverage.

"It seems like a lot of people have not renewed staff in the last year," Williams said. "And unfortunately, many people have had to join the FAIR plan in California."