There's 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, that read, in part, “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, especially with older homes, is meeting the underwriting requirements, so if there's knob-and-tube wiring on the property or deferred maintenance, that can make the installation very difficult or expensive,” he said.
Becerra added that there are a number of reasons companies are leaving California, and the Bay Area in particular.
This is because housing here is more expensive and it is also more expensive to rebuild in the event of a fire or other disaster.
California's insurance market is highly regulated, so insurance companies To tell They were unable to raise rates to keep up with rising costs.
Additionally, costs from natural disasters are increasing both at home and abroad.
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 you have to look for insurance through what are called 'access markets' or unauthorized companies because these companies are actually authorized to do insurance business but are not regulated by the Department of Insurance and so set their own rates,” he said.
He added that homeowners can also dispute the reason for termination or correct any problems the insurer noted about the home.
