Thousands of homeowners in fire zones are losing their insurance

ByMichael Finney and Renee Koury via KGO logo
Saturday, October 26, 2019
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Homeowners in wildfire areas were shocked when their insurance companies refused to cover them. 167,000 lost insurance in 2018 -- about half are in fire-prone areas.

ORINDA, Calif. (KGO) -- It's getting harder for thousands to find fire insurance. The disastrous blazes have insurance companies dropping customers living in wildfire areas-- and many new homeowners can't buy a policy in a wildfire area.

The state Department of Insurance released some astonishing figures. Insurance companies refused to renew more than 167,000 homeowner policies last year.

That's up six percent statewide -- and up 10 percent in wildfire areas alone. Statistics show about nine thousand residents in disaster zones lost their homeowners insurance in 2018. They were living in or near one of the major fires of the past two years. Also, state officials say an estimated 88,000 homeowners living in fire-prone areas -- that is rural, wooded, hot and windy -- lost their coverage last year even if there was no actual fire near them.

Among them was Elizabeth Cehovec of Orinda.

"I didn't feel good about it, I've been with them more than 40 years and here they are, canceling my insurance," Cehovec said.

Cehovec lives on a wooded hillside, up a narrow road. She says AAA Insurance refused to renew her homeowner's policy even though wildfires never have impacted her home. However, she was able to get insurance through State Farm by bundling her homeowner and auto policies under one umbrella. Moving all your business to another company can entice a carrier to cover you.

And there is a ray of hope for those in the recent major wildfires including the Kincade disaster: State law offers special protections for homeowners living in or near a disaster zone declared by the governor.

By law, insurance companies must renew policies for at least one year for homeowners living in a disaster zone, even if they had no damage. Homeowners who lose everything must be offered renewals for two years.

Also, insurance companies must give all homeowners 45 days' notice if they don't intend to renew their insurance -- for any reason. That's a longstanding rule. However, a new law extends that notice to 75 days beginning next July.

Many have notified 7 On Your Side saying their insurance agents are refusing to write new policies in fire-prone areas. Nothing in the law requires companies to write policies for new customers. For those who can't get insurance, the last resort may be a state-run insurance program known as the FAIR policy. It's barebones and expensive, but it's coverage.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.