Everyone wants to move to California, right? Well…maybe not.
The land of sun and surf promises an endless summer, but thanks to growing drought and an increased threat of wildfires, the California Department of Insurance (CDI) says some homeowners are finding it difficult to find homeowner policies. In fact, CDI data suggests that between 2017 and 2018, there was a 6% increase in insurer-initiated homeowner policy non-renewals.
These numbers are surprising, but it isn’t all bad news. Two insurer associations—the American Property Casualty Insurance Association and the Personal Insurance Federation of California—released a joint statement, noting that “the data… does not address the most important question—was the homeowner able to obtain insurance from another carrier?” The statement goes onto say that “for new policies, we see that carriers continue to write a significant number of policies in these areas.” They refer back to the original CDI report, highlighting the fact that non-renewal rates in rural areas at the highest risk of fire remained at 2%.
The effects of wildfire damage are impacting other insurance markets as well. For example, data suggests more Californians are investing in surplus lines of insurance, or “safety valve” insurance, policies that fill the need for different types of coverage by insuring risks not covered under the standard underwriting process.
If you’re interested, here’s a closer look.