A new and growing problem for San Francisco residents and business owners alike.
Insurance companies are increasingly canceling or refusing to renew home and business insurance policies with little to no explanation.
In March, San Francisco homeowner Jeremy Salterbeck received a notice from his insurer, Safeco, saying, “After careful consideration, we have concluded that we will not be able to renew your homeowners insurance policy.”
He told NBC Bay Area he was surprised to see grainy drone images of his home’s roof taken as part of the explanation.
“They’re trying to show that the presence of soil indicates that water has pooled and dried out,” Salterbeck said.
Bay Area insurance broker Jerry Becerra said insurers have not only stopped writing new policies but also halted renewals of some policies, leaving him struggling to find new companies to cover his clients.
“I think the hardest part is meeting the underwriting requirements, especially with older homes,” he says, “so if you have knob-and-tube wiring and other things and delinquent maintenance on the property, it can be very difficult and expensive to install.”
Becerra added that there are a number of reasons companies are leaving California, and the Bay Area in particular.
- Rising housing and construction costs
- California Insurance Regulation
- The costs of natural disasters are rising.
After the California wildfires several years ago, several insurers stopped writing policies in those high-risk areas, and Mr. Becerra said earthquakes in Taiwan and what appear to be more frequent hurricanes in Florida and the Gulf Coast are also contributing factors.
“When the reinsurance market changes and disasters occur around the world, all of that spills over into local insurance because it’s a fixed cost that insurers have to bear,” he said.
If you do receive a cancellation notice, insurance brokers say you should act quickly – insurers are required to give you at least two months’ notice before your policy ends.
Broker Steve Kreski said new insurance would probably cost several thousand dollars more, if at all.
“Sometimes we had to go into what’s called the ‘excess market’ or into unlicensed companies to find insurance,” he said.
He added that homeowners can also dispute the reason for termination or correct any problems the insurer noted about the home.
Jessica Aguirre speaks with Chris Chmura about the growing number of cases in which insurance companies are canceling or refusing to renew home and business policies with little to no explanation.
