Marin Residents Face Insurance Cancellations Despite Fire Prevention Efforts

Residents in Marin County, California, are grappling with the cancellation of their fire insurance policies, even as the county implements aggressive fire prevention measures. Mark Brown, the executive director of the Marin Wildfire Prevention Authority, recently received a non-renewal notice for his own insurance policy, despite taking numerous steps to make his home more fire-resistant. Brown’s experience echoes that of many others in the county, including Rich Shortall, the executive director of Fire Safe Marin, who also had his fire insurance canceled.

The issue of insurance cancellations is not limited to Marin County. In recent years, hundreds of thousands of policyholders in fire-prone areas such as Wine Country and the Santa Cruz Mountains have faced the same predicament. As a result, homeowners have been forced to resort to the expensive California Fair Access to Insurance Requirements Plan (FAIR Plan), the state’s insurer of last resort. Furthermore, major carriers like State Farm and Allstate have ceased writing new home insurance policies anywhere in California, leading to reduced competition among insurers and potential rate spikes.

According to Amy Bach, the executive director of United Policyholders, the increase in insurance cancellations can be attributed to several factors. These include the heightened risk of wildfires due to climate change, rising home replacement costs caused by inflation, and advancements in insurance technology. Insurers now utilize aerial images, artificial intelligence, and data analysis to assess risks more accurately, making them more cautious in underwriting policies.

The Marin Wildfire Prevention Authority, funded by a countywide parcel tax, conducts inspections of homes in Marin County and provides owners with reports outlining necessary steps to reduce wildfire risk. However, these efforts often go unnoticed by insurance carriers, as their risk models fail to account for the work being done by the authority and residents.

California Insurance Commissioner Ricardo Lara is working to address this issue by updating the risk models used by insurance companies. Brown expressed optimism about the connections made between the Marin Wildfire Prevention Authority and the insurance industry, which he believes will yield positive results in the future. However, in the short term, Marin residents should anticipate further cancellations.

Under California law, insurers must provide policyholders with a 75-day notice before terminating coverage. Consumer advocates urge affected residents not to ignore this notice and to seek assistance from independent agents who can explore alternative options. While very few “admitted” insurance carriers are writing policies in California, independent agents can often connect homeowners with “non-admitted” carriers that offer better coverage than the FAIR Plan.

The insurance landscape in California is expected to undergo changes soon, with Commissioner Lara proposing a plan to stabilize the state’s struggling home-insurance market. The plan would allow insurers to raise rates based on the growing threat of climate change, while also requiring them to expand coverage in high-risk areas. However, consumer advocates have raised concerns about potential rate hikes and the transparency of the process.