Homeowners insurance is a scam
Because our system puts protecting the profits of insurance companies above any public benefit they provide, insurance companies that have grown rich by raking in premiums for years, have now suddenly cancelled 350,000 California homeowners insurance policies. Cancelled. Done. All those premiums paid in? Ashes.
Jennifer Burt knows she lives in a fire-prone community. That’s why she’s done everything she can to fire-proof her home in Meadow Vista, in the bushy, densely wooded Placer County foothills, even installing a sprinkler system on the roof.
Yet a few weeks ago, her insurance carrier — Lloyd’s of London, known for insuring high-risk properties — told her it was declining to renew her homeowners’ policy.
Uninsurable means unsellable. So these properties will be coming onto the market at literal “fire sale” prices. The same fate is probably in store for coastal Delaware. It is an economic and climate change inevitability at this point.
Read more here: https://www.sacbee.com/news/politics-government/capitol-alert/article232575652.html#storylink=cpy
There are few things that annoy me more than insurance companies and their “filing a false insurance claim is a felony” commercials with Insurance Commissioner Navarro. If that’s true, then denying legitimate insurance claims should also be a felony, but insurance companies make the business decision to do that all the time with no repercussions.
This is a serous subject and my responding is more important than any blowback I may experience.
The Delaware Department of Insurance licenses and regulates insurance companies doing business in Delaware.
Current Delaware law permits homeowners insurance companies to CANCEL policies only for certain listed causes (nonpayment of premiums, multiple claims in a limited period, insurance fraud are examples. Sadly, current law does allow these companies to non-renew. That happens most often when a company pulls out of an area and also when the insured is deemed to be too high a risk. This has happened with many companies that had pulled out of coverage for properties close to the water.
In a case where a company has chose to not renew, the options are to
1. First speak with the company to see if the will reconsider
2. File a complaint with the Consumer Services division of the Dept. of Insurance. An investigator will be assigned and that person will send a formal request to the company requiring a response within 10 days. Sometimes these requests result in an extension of coverage. The proper pressure from the DOI can result in an exception being made.
3. Contact independent insurance agents to see if they can place the insured with another company.
4. Contact the large insurance companies that have their own agents (State Farm, Nationwide, etc).
5. If all the above fails, there is a last option: Delaware has a FAIR plan. Insurance companies pay into this plan. The purpose of the plan is to provide coverage for those denied it. Premiums are going to be higher, but coverage will be granted in most all cased.
The DOI can be contacted at delawareinsurance.gov. There is an online form for consumer complaints.
The FAIR plan is administered jointly with Pennsylvania’s plan. Email is customerservice@pafairplan.com
Cancel and non-renew seems like a difference without a distinction. Thanks for commenting
Dang insurance companies won’t let me build an explosive factory in Wilmington either. I was like “Come on, the DuPont’s did it for years!”
It’s almost as if the insurance companies create economic barriers to unsustainable activities.
It seems like you are trying to miss the point.
The problem has two parts.
1) Homeowners insurance is like “term life” insurance*. There is no build up of value over time. If the insurer decided to pull the plug, you are screwed. All the premiums you’ve paid in are gone, gone, gone.
2) Insurance compay profits are inviolate.
*Don’t get term life insurance.