More residents may see their fire coverage dropped by insurance carriers, while others living in high risk areas will see costs rise, California Insurance Commissioner Dave Jones said this week.
Four years of severe drought have increased fire activity in the state. So far in 2015, a total of 813,163 acres have burned across California compared to 555,044 acres in all of 2014, according to federal statistics.
Jones told KCRA-TV that the drought has led to “greater fire severity and greater losses.” Those losses have insurance companies analyzing their risk to determine how much claims cost they can absorb.
“There are currently no laws in California that prohibit an insurer from non-renewing a homeowner’s insurance policy, California law does provide consumers with specific rights in the event of a non-renewal,” The California Department of Insurance Website states.
KCRA-TV reports some Northern California residents have already received non-renewal letters from their insurance companies even if their homes are nowhere near the destructive Valley and Butte wildfires.
Jones says this is can be an opportunity to shop around for insurance, including the often more expensive secondary markets that specialize in high-risk.
Also, California has its FAIR plan, which is a safety net that guarantees minimal home and fire coverage.
