'It's a disaster': Here are top 10 Bay Area neighborhoods with the highest non-renewal rates

Thursday, January 30, 2025
These Bay Area zip codes have worst insurance non-renewal rates
California insurance crisis -- which Bay Area neighborhoods are seeing the worst impacts? 7 On Your Side investigates.

RIO NIDO, Calif. (KGO) -- 7 On Your Side is investigating new concerns about California's insurance crisis, which is pushing homeowners to the state's "insurer of last resort." Our team analyzed thousands of records from the California Department of Insurance to show which Bay Area neighborhoods saw the highest percentage of policyholders non-renewed or forced to the FAIR plan in 2023.

For ZIP codes that have more than 50 total policies, the highest non-renewal rate is the Rio Nido neighborhood in Sonoma County, where more than a quarter of policies were non-renewed in 2023. Non-renewals include policies dropped by insurance companies as well as policies terminated by the policy holder.

Other areas include small North Bay towns Guerneville and Pope Valley, and in the South Bay, parts of San Jose and Sunnyvale.

"State Farm's motto, what is it? 'Like a good neighbor, State Farm is there...' Huh, what a JOKE that is!" said Judith Gage, a long-time State Farm customer whose house is roughly 20 miles from Rio Nido.

After 50 years of never missing a payment with State Farm, Gage got dropped.

"It's been really difficult," Gage said. "I did not need that. I'm alone. I'm a widow. Yeah, I didn't know what to do.

MORE: CA congressman calls out state's insurance boss to implement rate freeze amid crisis: 'Do your job'

The 79-year-old survived the 2017 Tubbs Fire that tore through Santa Rosa. Her home was saved, but she lost a number of structures, including her beloved barns.

"I've thought about moving," Gage said. "I have no clue where I would move. What's safe?"

It's a question many of her neighbors are asking, too.

MORE: FAIR Plan coverage caps at $3 million: Here's why experts are worried about Bay Area housing market

According to a congressional investigation released in December last year, California is ranked fourth in the country for the highest percentage of non-renewals, behind Florida, Louisiana and North Carolina. The Golden State is ranked 12th for the highest spike in premiums, with an average increase of around 31%, according to the National Bureau of Economic Research.

"If the rates had been adequate... I don't think we'd have seen these non-renewals," said Tom Quirk, a 40-year veteran insurance broker based in San Jose. "You know, right now it's really a disaster."

MORE: CA congressman calls out state's insurance boss to implement rate freeze amid crisis: 'Do your job'

"When we talk to insurance companies, they tell us that the rate increases they're getting, they requested them years ago, long before inflation started to really eat up the dollar," Quirk said. "I think that's one of the reasons. Trying to get to the right price in this regulated system is going to be difficult if we don't let the free market really work."

There's little competition as more than a dozen of the state's insurers that make up 85% of the market have dropped out or restricted issuing new policies -- including State Farm, All State, Farmers, Nationwide, Travelers, USAA, American National, AmGuard, Chubb, and more. Those actions are why the California FAIR Plan has reached its highest demand so far.

Enrollment in the FAIR Plan has doubled in recent years, now accounting for roughly a half a million policyholders across the state as of September 2024, according to the California FAIR Plan Association.

MORE: SF homeowner spent $42K to appeal Liberty Mutual's non-renewal but it didn't work. Here's why

"The FAIR Plan was never intended to pick up that much," Quirk said.

The Pope Valley ZIP code in Napa has roughly 65% of policyholders forced onto the California FAIR Plan -- the highest of any other neighborhood in the Bay Area. Other ZIP codes surrounded by dense forests, including Loma Mar on the Peninsula and Inverness and Angwin in the North Bay, trailed behind with a third of the population stuck with the state's insurer of last resort. Coastal towns including Pescadero in San Mateo County and Jenner in Sonoma County also made the top 10 list.

"It's a little tiny, small place at the mouth of the Russian River, and the Pacific Ocean is right there on the coast," Gage said. "So I don't know. I don't get the logic there. But whatever. It doesn't seem to follow any real logic."

MORE: 'Mold, algae': Insurer drops SF homeowners, citing aerial footage of roof that didn't exist

"As insurance agents, you know... we find ourselves in really crummy positions," Quirk said. "As an example, if you had a home in the mountains, and I said, 'Look, the only place we can put you is the FAIR Plan,' I mean, is that even a good recommendation on my part, because they might be bankrupt! So we wrestle with those kind of ethical issues, and we're looking for some direction on that."

Quirk has not received any direction from the Insurance Commissioner.

"You know, I've reached out a few times and to a few different places to see, you know, how do we advise people. We've got something out of Lloyd's of London. It's twice the FAIR Plan premium," Quirk added. "But quite honestly, we'd have more confidence in that than we have in the FAIR Plan."

These are the tough decisions facing consumers like Gage.

MORE: 17,000 Liberty Mutual customers in CA to lose fire insurance policy: Here's what you need to know

After Gage lost her husband and her mother, State Farm dropped her. Now, she's left to find a new policy on a fixed income.

"This was like the final blow," Gage said. "What can I tell you? It's been hell."

Gage was able to find a policy through Farmers, but only for one year -- and it's nearly up, like thousands of others. She's just hoping she doesn't get stuck on the FAIR Plan.

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

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