AAA of Southern California is going to stop renewing homeowners policies in very high-risk areas exposed to potential wildfires. Spokesman Jeffery Spring said the decision is to mitigate the firm’s exposure to catastrophic risk. He also said, AAA of Southern California thinks not doing so will eventually raise rates and make the company less competitive.
“Although the risk of fire has increased over the years in many California communities, we have continued to offer home insurance in the state. Over the past few years, we saw a need to re-evaluate our exposure to future catastrophic fire events,” Spring said.
Basically, the policy says homes will now be assessed based on their proximity to bushes, vegetation and other flammables. The assessment will be done via a combination of aerial photography and the physical inspection of photos.
Spring thinks this will impact maybe 1% of the homes they insure.
If a policy is not renewed AAA of Southern California said help finding a policy will be offered through the company’s in-house agency or through the FAIR Plan.
By the way, AAA says four of the five counties at risk for wildfire are found in California:
• Los Angeles County
• Santa Clara County
• Orange County
• San Diego County
The fifth is Harris County in Texas.
Source link: Insurance Business America