Homeowners Insurance Canceled or Non-Renewed in California? What to Do This Week

Do three things this week. Find the date on the letter. Call an agency that can look at more than one company. And don't let the policy end before a new one starts.

If your homeowners insurance was canceled or non-renewed in California, you have a lot of company. It has happened to careful homeowners with no claims, in Pleasant Hill, in the Contra Costa hills and all through the foothills. The letter feels final. It usually isn't.

Darlene Baxter is a licensed California insurance agent and owner of Darlene Baxter Insurance Agency in Pleasant Hill, CA, helping homeowners, families and business owners get covered with real choices: their main company first, and other companies through the brokerage when it isn't the right fit. Calls about these letters come into her office every day. This is what she tells people.

They sound the same, and they aren't.

Non-renewed means your insurance company will keep the policy until the end of its term and then won't offer you another one. You're covered until the date on the letter. This is the letter most California homeowners are getting.

Canceled means the company is ending the policy before the term is over. That's less common, and the date is usually closer.

Either way, the letter should give you two things: the date your coverage ends and the reason. Write the date somewhere you'll see it. Everything else is planned backward from that day.

There are two common reasons, and sometimes both apply.

The company has too many homes in your area. One of the biggest lessons insurance companies took from the last few years is saturation. A company that insures too many homes in one area can be hit with all of those claims at once if a single fire comes through. So every company limits how many homes it will insure in any one area. When a company is over its limit, it non-renews homes there.

Your claims history. Your own record matters too. A homeowner with two claims in five years will have a very tough time finding a homeowners policy, and when we do find one, it's going to be expensive. Water claims count the most. They're the most common claim we see right now, and the coverage for water is limited. The damage has to be sudden, like a pipe that bursts. A slow leak, wear and tear, or anything that comes from putting off maintenance is never covered by homeowners insurance.

That's why one company's "no" doesn't mean every company's "no." A company that's full in your area may be the only one that is.

New companies are coming into California too. Many of them are what the industry calls non-admitted companies. That's a licensing term, and it doesn't describe quality. These are established insurance companies that are allowed to write policies here under a different set of state rules. For a lot of homes in high fire areas, they're a good option that didn't exist a few years ago. We explain how a non-admitted policy differs before you choose one.

• Find the date. It's your deadline. The earlier you start, the more options there are to look at.
• Read the reason. Wildfire risk, the age of the roof, a claim, or the company pulling back from your area. The reason tells an agent where to look next.
• Keep paying your current policy until a new one is in place. You want one policy to end the same day the next one starts.
• Gather a few facts about the house. The year it was built, the roof, any updates to plumbing, electrical or heating, and any claims in the last few years.
• Call an agency with more than one option. One company already said no. You need someone who can keep looking.

If you have a mortgage, don't skip this. Your lender requires insurance on the home. If your coverage runs out, the lender can buy a policy for you and add the cost to your payment. That policy protects the mortgage company, not you, and it's usually not the price you'd pick.

It starts with a conversation. Darlene's first words are usually "Tell me about your house." She asks about the age of your roof right away, because it's one of the most important questions an insurance company has. She gets the other details she needs, and most of the time the team can gather the rest without you digging for paperwork.

Then the shopping starts. We begin with our main company. When it isn't the right fit, we look at other companies available through our brokerage. Our homeowners insurance page explains how that works.

Darlene will also ask if you're okay with text messages. If you are, you're added to the team's text line. When a quick question comes up about the property, someone can text you and keep things moving. You aren't waiting on a call back, and neither are we.

When there are options, we go through the coverages with you before you sign anything, not after. You'll see what each one covers, what it leaves out and what it costs. The shop step in our process lays out the rest.

We can't promise approval or a price. Those decisions belong to the insurance companies. You'll always know where things stand.

If none of the regular companies will take your home, the next step is the California FAIR Plan. It's the state's insurer of last resort, built for homes that regular companies won't take, and for a lot of homes in high fire areas it's part of the answer.

It isn't the whole answer. The FAIR Plan covers fire and a short list of other damage. It leaves out things a regular homeowners policy includes, like liability, theft and water from a burst pipe. A second policy, called a wrap or DIC policy, fills those gaps. The two together work much like a standard policy.

Our FAIR Plan and wrap policy page explains how the two fit together. The team helps with both applications, so the two policies line up.

One of Darlene's clients described it this way:

It can be harder, which is why the goal is to never have one. Insurance companies ask whether a home has been continuously insured. A gap raises questions, and it leaves you with no coverage if something happens in between.

If you've already had a lapse, call anyway and say so up front. It's better for us to know on day one than for a company to find it later.

• Waiting until the last week. Some policies take time to set up. Start when the letter arrives.
• Treating one "no" as every "no." Companies look at homes differently. One company's answer isn't the only answer.
• Buying the FAIR Plan alone. Without a wrap policy you can be left with no liability or theft coverage.
• Letting coverage lapse to save a month of premium.
• Guessing on the application. Give accurate details about the house. The company relies on them.
• Forgetting earthquake. No homeowners policy or FAIR Plan covers it. That takes separate earthquake insurance.

Darlene Baxter is a licensed California insurance agent and owner of Darlene Baxter Insurance Agency in Pleasant Hill, CA, helping homeowners, families and business owners get covered with real choices: their main company first, and other companies through the brokerage when it isn't the right fit.

She has been in insurance since 2009 and grew up in Groveland, so homes in the hills and the mountains are familiar ground. The agency works with homeowners across California, with a lot of clients in Contra Costa County and in Tuolumne, Calaveras and El Dorado counties.

From a client in a rural area:

Find the date on your letter. Then call the office at (925) 940-6970, or send us a message, and tell us about your house. If your homeowners insurance was canceled or non-renewed in California, the sooner we start, the more there is to look at.

To see every step from the first call to renewal, read how we work.