SF homeowner spent $42K to appeal Liberty Mutual's non-renewal but it didn't work. Here's why
SAN FRANCISCO, Calif. (KGO) -- After getting dropped by Liberty Mutual due to 'mold and algae' on her roof, Kathryn Kathman invested thousands of dollars to get it checked only to find the issue wasn't even there. Like any desperate homeowner she appealed and altogether invested $42,000 into her property -- but says the insurer still dropped her over an issue with uploading her application.
7 On Your Side hears from dozens of consumers each week in similar situations as insurance companies continue to rely on aerial footage to assist in non-renewal decisions. So we took a closer look into how it's being used, and why inspectors have found it to be misleading and inaccurate.
Getting dropped by your insurer is bad enough. What's even more frustrating for Castro Valley homeowner Olivia Rivera Ochoa? The reason cited in the non-renewal of her property was wrong.
Kathryn's case
It gets worse for San Francisco's Kathryn Kathman. She was dropped in May because according to aerial footage, Liberty Mutual cited concerns of "algae & mold" on her roof. Turns out there was no mold, just like the Hoovers experienced. The couple was also dropped by Liberty. We profiled them last week.
Like the Hoovers, Kathman also got an inspector to come out -- who checked her roof and the chimney and found there were no major issues. She even took out a loan to purchase a new electric HVAC system for her property. Altogether an expensive appeal process for the SFUSD teacher, who's working four jobs to make ends meet. Yet, after three months of investments, she still got dropped. The worst part is it was for a reason that had nothing to do with her property.
"Liberty Mutual told me the pictures I sent them were in the wrong format... you're done,'" Kathman said. "They even said the roof is fine!"
RELATED: 'Mold, algae': Insurer drops SF homeowners, citing aerial footage of roof that didn't exist
She says she resent them in another format., reminding them of all the work she did to her property and the mold issues previously cited were never there -- even offering to send inspection reports of her house every year.
"They said, no, no, no, nope!" Kathman said. "I think they were looking for any excuse to get rid of me."
It turns out the last straw for Liberty Mutual was a picture formatting issue.
We asked Liberty Mutual Insurance about that, but the company told us: "We do not publicly discuss individual customer information. Our consumer affairs team is looking into each matter and will be reaching out to these customers directly."
Olivia's case
In Olivia Rivera Ochoa's case, the lack of clarity was the issue. She said, "They needed more pictures; but they never stated what they wanted!"
She says she was constantly on the phone with a different representative trying to get clarity for more than a month.
"The last person I talked to said, no, they want the left side of your yard... but I did send them pictures of the left side. Now, they want more but can't tell me where," Rivera Ochoa said.
The company sent her an inspection report stating she was dropped because of a "debris hazard" around her property. All it said was "not on roof." But Liberty Mutual never specified where -- even one month later. The image the company sent only included a red arrow pointing to the side of her house.
MORE: What's next in California's insurance crisis? Commissioner Lara lays out plan, addresses criticism
According to Rivera Ochoa, the company said, "Oh, that arrow was not supposed to specify an area." Without any answer, she says Liberty Mutual sent her an email stating "the non-renewal decision remains."
So, she appealed by sending more pictures of all areas around the house, showing no visible debris. A second chance Kathman did not even get.
"They were absolutely inflexible," said Kathman. "I offered them more money, I offered more inspections, I offered to do anything... all they could say is that they are not doing any more policies in California."
7 On Your Side is seeing similar situations with other insurers, including AAA, Safeco, State Farm, Farmers, and Geico. People are getting dropped, citing things like "a small branch touching the corner of my shed" to something as vague as "clutter."
So, will the state's latest reform regulation help or hurt this process?
Advocacy groups are concerned Commissioner Ricardo Lara's reform plan could do just the opposite. The commissioner is allowing insurers to use what's called "catastrophe modeling" - essentially software algorithms that will be used to make coverage decisions. Lara believes he will be able to regulate it fairly and transparently. But his critics worry that it will only make it easier for insurers to potentially discriminate in areas deemed to be "high risk."
Take a look at more stories and videos by 7 On Your Side.
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