If you are a California resident and your home insurance is being cancelled or non-renewed, you’re not alone. Since 2003, the frequency and devastation of wildfires has gotten progressively worse.
The 4th quarter 2018 wildfires had a domino effect on many “big name” insurance companies. The severity of recent brush fires caused an unexpected number of claims. As a result, one insurance company went under. Other carriers in California have either decided to not offer renewals or are drastically increasing rates. It doesn’t matter if your home has been insured with the same insurance company for years (or even decades), you may be non-renewed if your property is located in a high fire risk area. Everyone in California is subject to the new wildfire underwriting guidelines.
So, this leads us to the BIG question…why is my home insurance being cancelled? If you haven’t made any claims, pay your bills on time and even bundle all your policies with one company, receiving an unexpected home policy cancellation notice can leave property owners confused and frustrated.
To help loyal customers gain a better understanding of why they’re being cancelled, the following variables may shed light on an insurance carrier’s logic.
FIRELINE SCORE OR FIRE LINE SCORE
Fireline is a score that is assigned to your property and determined by the ISO (Insurance Services Office). ISO is an independent company that serves insurance companies and other entities by providing information about wildfire risk. The ISO collects and evaluates information from neighborhoods throughout the USA and looks at that area’s ability to manage fires.
The ISO and the National Fire Protection Association look at 3 critical factors when assessing the wildfire risk:
FUEL – The type/amount of brush, trees and vegetation within ¼-1 mile radius that can catch on fire. This type of “fuel” can feed a wildfire. Many carriers decline to quote a home insurance policy if they are within 100-2,500 feet of brush. Einhorn Insurance will insure homes within 100 feet of brush. If a home is surrounded by unmanaged vegetation and/or trees hang over or touch the roof, this may be an issue (regardless of how close your home is to brush).
SLOPE – The combination of the land’s slope, terrain and wind pattern can cause a fire to move faster or slower.
ACCESS – This is how easy (or difficult) it is for a fire truck to access your property. Is the road paved? Is it wide enough? Is there more than one point of entry (or only one way to get it and out of the area)? Is the home located on a cul-de-sac? How far is the property from the main road? Answers to these questions can affect the accessibility for fire-fighters to reach a property to attempt to save it.
Based on an area’s FUEL, SLOPE and ACCESS, a score of 1-30 is assigned to a property. In all my years of insuring homes in high brush areas, the highest fireline score I can recall seeing is a 21. Most homes fall between 1-10.
A score of 0-1 is negligible or low fire risk.
A score of 2-3 is a moderate fire risk.
A score of 4-12 is a high fire risk.
A scores of 13-30 is an extreme wildfire risk.
Most insurance carriers consider a home ineligible if it has a Fireline score over 3. If a property has a Fireline Score over 5, it has become increasingly challenging these days to find a traditional home insurance policy. A California Fair Plan (CFP) policy accompanied by a Wrap Around or DIC (Difference In Conditions) policy is a great and comprehensive option for homes with higher Fireline Scores. If written correctly by an agent that understands the California Fair Plan policy, the 2 policies together are like having a traditional home insurance policy.
While many insurance agents frown on CA Fair Plan and try to discourage property owners from using CFP, Einhorn Insurance LOVES the California Fair Plan policy. Agents who think poorly of CFP policies most likely don’t understand how the policy works, don’t write a lot of policies thru CFP and they’ve never been thru a claim with CFP.
Einhorn Insurance has worked with California Fair Plan for years and we’ve issued hundreds of polices thru CFP. We’re very comfortable with the coverages and understand how to properly insure a home.
I’ve gone thru several claims (devastating losses) with the California Fair Plan and have had very few complaints from our clients. I wish I could say the same for my traditional big name home insurance carriers.
As stated above, we can and highly recommend accompanying the CFP policy with a DIC/Wrap policy so you get the coverage that a “normal” home insurance policy will give you (fire coverage + water coverage + liability coverage + loss of use…etc). The combined cost of these 2 policies can often be less expensive and offer better coverage than a “normal” home insurance policy.
PPC or PUBLIC PROTECTION CLASS
The PPC is another measurement developed by the ISO for insurance companies to evaluate a property’s fire risk. A home’s PPC is based on a scale of 1-10 (low to high risk). To determine a home’s PPC, the following are considered:
Emergency Communications: This includes emergency reporting, telecommunicators and available dispatch facilities (fire stations) that have strong communication skills. Strong and effective communication is critical in the time of a wildfire.
Fire Department- The quality of a fire department, including their equipment, staffing and training procedures.
Accessibility to water- This refers to a property’s proximity to a water supply…including the condition/maintenance of hydrants and the amount of water available (compared to the amount of water necessary to put out fires in the area).
Insurance carriers prefer a home is located within 5 miles of a “responding” fire station and less than 1,000 feet from the nearest fire hydrant. The further a home is located from a hydrant & fire station, the higher the PPC score.
YOUR HOME IS IN A SHIA
A SHIA or Special Hazard Interface Area is when a property is located in an area that borders homes in neighborhoods with high Fireline Scores. Properties that are next to high fireline areas are also at risk. Homes in a SHIA zone can catch fire due to their closeness to high heat and exposure to wind-borne burning embers. SHIA looks at the climate and wind patterns around the property.
Properties in SHIA parameters may have to follow 8 requirements to be insurable.
1. No fences, playground equipment, trellises or other combustible structures within 30 feet of the home.
2. Brush must be cleared within 100 feet or up to the property line, whichever is less.
3. No vegetation within 10 feet of a propane tank & the tank must be more than 30 feet from the home.
4. No wood roofs.
5. Gutters, soffit vents, chimney and stovepipe non-combustible mesh with opening of no more than one quarter inch.
6. No dead or dying plants, shrubs or bushes within 30 feet of the home.
7. Eaves and overhangs must be boxed or enclosed with non-flammable materials to reduce the surface area and eliminate any edges that can trap burning embers.
8. There must be at least 15 feet of vertical clearance between the home and overhanging tree branches.
DEAD END, NARROW OR DIFFICULT TO ACCESS ROADS
If your property is difficult to access by local responding or volunteer fire stations, the likelihood of being able to extinguish a fire is low. Insurance companies want to insure homes that are on streets wide enough to accommodate fire trucks and roads that are accessible from multiple directions. If your property isn’t easy to get to or can’t be seen from a public street, you may be considered a “high or ineligible” risk.
ADDITIONAL REASONS FOR YOUR HOME INSURANCE CANCELLING
- Debris/trash around the home. This includes inoperable vehicles.
- Overgrown/unmanaged vegetation around the home.
- Worn roofs, moss on roofs or cracked/missing roof tiles.
- Open eaves
- Firewood stacked against (or too close) to the house
- Propane tank(s) too close to the house
- Boarded up windows/missing windows.
- The home’s exterior has cracked paint, worn paint or cracks/holes in stucco.
- Trees/vegetation touching or hanging on/over the roof.
- The home is vacant for more than a month at a time (if you have a vacant policy, this doesn’t apply).
- Homes that lack pride of ownership.
We understand your frustration and know it’s unfair that the home insurance market is changing so rapidly (especially when those affected may reside in areas that have never had fires). Rest assured, insurance companies make business decisions based on risk, numbers and potential future losses/claims; it’s not personal.
Einhorn Insurance can help