Once an insurance company stops writing policies in an area, is that forever or just a limited time?
Having trouble finding fire insurance in Fallbrook, CA due to the brush fires. Any information you can give me would be of great help. Prefer not to get California Fair Plan insurance due to the skimpy coverage.
homeowners insurance
It’s up to them. Most of the time they stop writing policies because the risk is too great for loss, and they have to balance their income and assets. If the risk of fires remains high, they won’t write there for some time. Talk to an independent agent and see what they can suggest
It can be either way. Sometimes, they stop forever – sometimes, they just stop for a few years.
Very rarely, they’ll put it on hold for less than a year.
For the high brushfire areas, I’d be shocked if they start writing again in that area, until some “new” method of fighting brushfires arises, that mitigates the fire loss.
You should really be asking the sales reps for the local companies as to what the nature of the stop includes. This may be a short term stop, where they want to clear up damages before they write new business, or they may be leaving that market. Here in Illinois, we have had stops put on various coverages many times over the years, and these stops do not typically last more than about a month or so.
It depends on the location and the situation. Some insurance companies will stop writing policies in an area indefinitely because they simply can’t make money due to a variety of reasons. Other times they stop writing policies because there is an imminent threat and they don’t want to take on new customers right before a disaster hits the area. Examples of both:
EXAMPLE #1: The state of Louisiana. This is a very unprofitable state for insurance companies to write business for several reasons. One of the major cities, New Orleans, is below sea level which means if a hurricane hits the area the damage will be catastrophic (ie Hurricane Katrina). Another reason is the state heavily regulates private insurance companies in the state to the point where they almost tell them what they have to charge for coverage. Most importantly, Louisiana is known as a “judicial hellhole.” The courts in Louisiana are very liberal and any time there is a lawsuit against an insurance company, the courts almost always favor the insured. In summary: 1. Geographically it is at risk to catastrophic damage, 2. Rates are regulated to the point where it is impossible to make money, 3. The courts never favor an insurance company. This is a situation where a company will likely not write in the state until at least 2 out of 3 are eliminated.
EXAMPLE #2: You live along the coast and you notice that a hurricane is expected to hit the area in 3 days. The insurance companies announce they are not accepting new business. Unless there is something else going on, I would expect the moratorium on new business to last only a limited time.