Summary of United Policyholders Presentation to PPNA on 6/2/2025

The document provides United Policyholders’ tips and information on home insurance shopping, focusing on navigating premium increases, wildfire risk mitigation, and understanding insurance options in California.

Overview of United Policyholders

United Policyholders (UP) is a not-for-profit organization dedicated to assisting individuals with insurance-related issues, particularly in disaster recovery and resilience. ​ With over 30 years of experience, UP provides resources and support to help homeowners navigate the complexities of insurance.

Recent Rate Increases by State Farm

State Farm has implemented a 20% overall rate increase, leading to significant hikes in various regions across California. ​ For instance, Ojai saw a staggering 75.6% increase, while Piedmont Pines experienced a 17.4% rise.

  • State Farm's overall rate increase: 20% ​
  • Average increases by region:
    • Ojai: 75.6%
    • Soquel: 29.2%
    • Napa: 32.1% ​
    • Hillsborough: 19.9%
    • Piedmont Pines: 17.4%
    • Diamond District: 15.4%
    • Los Altos Hills: 12.6%
    • Ladera: 9.4%
    • Ventura: 24.2%

Building Hardening and Mitigation Measures

To enhance home protection against wildfires, specific building hardening measures and property-level mitigation efforts are recommended. These measures include using fire-resistant materials and maintaining a defensible space around the home.

  • Building hardening measures:
    • Class-A Fire Rated Roof ​
    • Enclosed Eaves
    • Fire-Resistant Vents
    • Multipane windows or functional shutters ​
    • Minimum 6 inches of noncombustible vertical clearance ​
  • Property-level mitigation efforts:
    • Clear vegetation and debris from under decks ​
    • Maintain noncombustible materials within 5 feet of the home ​
    • No combustible structures within 30 feet of the home ​
    • Compliance with local ordinances and Public Resources Code Section 4291 ​

Insurance Non-Renewal and Appeal Process

Homeowners must be notified 75 days in advance of any non-renewal of their insurance policy, with the right to appeal the decision. ​ It is crucial to start shopping for new insurance options immediately after receiving a non-renewal notice.

  • Insurers must provide 75 days notice for non-renewal ​
  • Homeowners can appeal the decision
  • Start shopping for new insurance right away
  • Keep detailed notes on contacted insurers ​

Factors Influencing Insurance Decisions

Several factors can affect an insurer's decision to renew a policy, including wildfire risk, past claims, and the age of the home. Homeowners should be aware of these factors when seeking insurance coverage.

  • Key factors influencing insurance decisions:
    • Wildfire risk and fire hazard issues ​
    • Losses/claims in the past 3-5 years ​
    • Age of the home and roof
    • Presence of galvanized pipes or knob and tube wiring
    • Value of the home and additional structures like pools or trampolines

Understanding Insurance Types and Coverage

Homeowners should be aware of the differences between admitted and non-admitted insurance companies, as well as the types of coverage available. This knowledge can in selecting the right policy for their needs.

  • Types of insurance companies:
    • Admitted/licensed: backed by guaranty fund, regulated rates ​
    • Non-admitted/surplus/excess: no rate controls ​
  • Coverage options:
    • CA Fair Plan: up to $3M for fire risk
    • Difference In Conditions Policy ​
    • Comprehensive Coverage

Importance of Accurate Coverage Limits

Homeowners should ensure their coverage limits reflect the actual cost to rebuild their homes, as many policies may offer insufficient coverage. ​ Consulting local rebuilding costs is essential for adequate protection.

  • Many policies offer less than $300 per square foot for rebuilding ​
  • Seek advice to understand realistic rebuilding costs ​
  • Adjust coverage limits accordingly to avoid underinsurance

Documenting Home Contents for Claims

Creating a detailed inventory of home contents through photographs and videos can significantly aid in the claims process after a loss. ​ This documentation serves as evidence for insurance claims.

  • Photograph and video all contents in the home
  • Store documentation in the cloud for easy access
  • Helps in writing a detailed inventory for claims ​

California's Sustainable Insurance Strategy

The California Department of Insurance is working on a Sustainable Insurance Strategy to amend the rate review process, allowing insurers to use catastrophe models for setting rates. ​ This aims to increase coverage availability in distressed areas.

  • Sustainable Insurance Strategy in process ​
  • Allows insurers to use catastrophe models for rate setting ​
  • Higher premiums may lead to more coverage options in distressed areas ​