Farmers Insurance Cancels Policies in California Communities Due to Wildfire Risk

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(USA Herald) – As wildfires continue to ravage parts of California, Farmers Insurance has been canceling property insurance policies in San Diego communities due to heightened wildfire risk. The insurer has recently dropped renewals for over 1,000 properties in the region, citing the need to manage risk.

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Investigative journalist Samuel Lopez reports that condo owners in San Diego communities such as Scripps Ranch, Rancho Bernardo, Tierrasanta, and Mira Mesa have been hit hard by the cancellations. For example, the Village Woods condo complex in Scripps Ranch would have to pay an additional $500 a month if they looked for a replacement policy on the secondary market. In Tierrasanta, the condo owners’ association could be looking at potentially $7,000 annually per condo owner for insurance after Farmers dropped coverage.

While Farmers has declined to comment on individual customers’ underwriting decisions, it’s important to note that their claims of increased wildfire risk in the region are not unfounded. According to California insurance agent Alice Miller, insurers have paid out twice the cost of the Northridge earthquake since 2017. Miller also explained that major insurers such as Farmers had recently updated their modeling programs for determining wildfire risk, and thus have been retreating from the market.

However, this retreat has left many policyholders in a lurch. Homeowners and condo owners are now left scrambling for coverage, as many insurers are either raising their prices or distancing themselves from markets like California and Florida due to their worsening disaster losses. This has led some to accuse insurers like Farmers of bad faith conduct, as many of these cancellations have been made without clear explanation or justification.

As a result, many advocacy groups have sprung up to support policyholders and fight against insurers’ bad faith conduct. These groups work to educate policyholders on their rights and responsibilities, as well as to lobby for change in state and federal insurance regulations. Some have also gone to court to fight against insurers’ unjustified cancellations and rate hikes, with varying levels of success.

It’s important to note that policyholders do have rights when it comes to insurance cancellations and rate hikes. Under California law, insurers must provide a clear explanation and justification for cancellations or non-renewals of policies. They must also provide policyholders with a reasonable amount of notice before cancelling or non-renewing their policies. If policyholders believe that they have been treated unfairly or in bad faith, they can file a complaint with the California Department of Insurance.

In conclusion, Farmers Insurance’s cancellations of policies in San Diego communities due to wildfire risk has left many policyholders scrambling for coverage. While insurers’ claims of increased risk are not unfounded, many policyholders are accusing them of bad faith conduct. As a result, advocacy groups have sprung up to support policyholders and fight against insurers’ unjustified cancellations and rate hikes. Policyholders should be aware of their rights and responsibilities under California law and file a complaint with the California Department of Insurance if they believe they have been treated unfairly.