Rita Tanner noted that she did much of what state officials have asked California homeowners to do to better protect their homes from fire. She and her husband installed a new fire-resistant roof in January and have cleared the sheltered space around their home along Calistoga Road in Santa Rosa.
But that was not enough. She was informed by her insurance company a month ago that it would not renew the policy she has had for five years, even though she has not filed a claim. Tanner has not been able to find another company to underwrite her even though she works with an insurance broker.
Her only option has been the state FAIR plan, which is the state’s last insurer. The new premium will cost about $6,000 more than it currently pays, and it will also have to get additional coverage for circumstances such as theft and liability, because the state plan only covers catastrophic losses.
“It’s very frustrating,” Tanner told The Press Democrat. “We had Cal Fire come out a few years ago as well, they went through the whole property and gave us an A-plus (grade) for it.”
Other Sonoma County residents are likely to find themselves in similar situations as carriers readjust their risk models and abandon consumers, especially those who live in more rural areas like Tanner. The move comes as the county is now a full year into a moratorium imposed by state Insurance Commissioner Ricardo Lara that prevented carriers from dropping coverage for 164,516 Sonoma County homeowners who were affected by or lived near the Walbridge wildfires. and Glass 2020.
The state does little to track how many homeowners lose coverage specifically because of fire risk, but anecdotally those in the industry say the numbers forced into the FAIR plan are rising in Sonoma County.
“This has been going on for over two years,” said Vince Ginocchio, an insurance agent at Sadler and Co. in Santa Rosa, who said he has received hundreds of calls like Tanner’s during that time period.
FAIR plan policies are still a relatively small number locally, accounting for about 0.8% of all residential policies written in Sonoma County in 2020, according to Michael Soller, spokesman for the state Department of Insurance.
Nationwide, the number is less than 3% of the market, with the hardest hit area being along the fire-prone Sierra foothills.
There were 689 county residents who signed up for the FAIR plan in 2020, the last year such numbers are available, according to the department. Another 517 renewed their FAIR policies that year for a total of 1,206 homeowners. In 2015, there were a total of 164 FAIR Plan policies throughout Sonoma County.
Against this backdrop, Lara last week unveiled new rules requiring carriers to offer discounts to consumers and businesses that take steps to mitigate their fire risk. They will also need to consider actions taken by a local community to reduce such threats, such as clearing overgrowth along a corridor. The regulations, which are expected to come into effect next month, will also give policyholders the right to obtain a fire risk score from their company and appeal a negative decision made by the company.
In a statement, Lara said the regulation “will help more Californians find insurance they can afford.”
Amy Bach, executive director of United Policyholders, a San Francisco-based consumer advocacy group, said an increase in FAIR plan numbers was expected after the moratorium expired. But Bach said she was encouraged that the new rules would help curb non-renovations along with another wildfire season that doesn’t result in large numbers of homes being destroyed across California.
“If we get through this season without a megafire … the market will definitely loosen up,” Bach. “Right now, my guess is that the insurers basically had their calendars set for when the moratorium was going to expire.”
Soller said the department hopes to have a better understanding in the future of why companies issue non-renewals. But it is also focusing on encouraging companies under the new rules to offer incentives to homeowners who take mitigation steps. “We expect discounts now across the board from all companies,” he said. “This is the first (rule) of its kind anywhere in the country.”