The last 15 months were pretty stressfull for Joe K. He wasn’t sure if he would have insurance for his home, or whether he could afford it.
He already faced a double whammy from his home insurance company Farmers. First, the company said it would non-renew him because of his roof, then it reinstated him and immediately raised his premium 71%.
“They set us up for nonrenewal for no verifiable reason,” said Joe. In the fall of 2023, his agent said that Farmers was going to non-renew Joe for roof issues from a drone picture.
“This was surprising because the roof was replaced as new in 2019,” said Joe. “This thing with drones is crazy, they just said your roof is substandard and we are not renewing you. The roof had dark spots but there was nothing wrong with the roof. They made me go through gyrations to get a contractor to say there is nothing wrong with this roof. So, then they said, ‘Oh Ok, we’ll renew you, but we will raise your premium by 71%.’ We got notice of the premium hike literally seven days before it was due.”
In December 2023, Farmers sent an email that the policy was reinstated. The next day, Joe’s agent called “to talk about the new bad news that Farmers was increasing our insurance premium by a shocking new amount. The premium went from $2,721 a year to $4,658.”
Joe bought his house is in the Hollywood Hills a few years ago. It’s a 2,444-square-foot historic property. It is located at the bottom of the Nichols Canyon area of the Hollywood Hills. “South of us there’s basically houses, and we are not in a canyon surrounded by brush, no forest and streets on both sides of the house and that gives perimeter protection.”
He wanted to know more about why his premium went up so much, so he called the Department of Insurance, and a representative explained how to file a complaint online. He did that. Shortly after that, the representative emailed a four-paragraph letter from the Department of Insurance saying that yes, the premium increase was correct.
Joe emailed back: “I need an explanation from you and the California Department of Insurance on how the rating planning allowed almost doubling my homeowner’s insurance policy. My neighbors are not getting these increases. Our area is not one of the more high-risk areas. Please provide detailed explaining or refer me to your manager. This is an unacceptable response.”
The representative emailed that she was forwarding the email thread to her supervisor. A month later, he called her and said he was still waiting for a response. It never came and he gave up.
“The big thing that is really shocking is that we are middle class, we plan financially to be able to retire and to buy a house and we pencil in how we are going to pay for it,” he said. “This near doubling of our insurance is just extreme to be able to plan for it.” His mortgage escrow insurance payment has gone up by $500 a month. He has a hunch about how it happened.
“How do you let Farmers do this in lower Nichols Canyon that hasn’t had a fire in decades? How is the risk assessed and graduated. There are parts of the area at risk and parts that are not, and it looks like they are blanket applying the worst-case scenario to everybody.”
Joe’s policy came up for renewal at the end of 2024. After his unsuccessful attempts at getting an explanation from the Insurance Department on his rate increase, his insurance broker told him to shop around. He was astonished at what he found. “I was shocked that USAA will sell me home insurance for lower than what Farmers was last year, for $2,200 a year instead of the Farmer’s almost $4,800. I can also get car insurance for $1,043 versus $1995 a year,” he said.
But there were still caveats. A USAA agent asked Joe numerous verbal questions about his property. “I answered all their detailed questions about the home including whether I had unmaintained vegetation on the property.” USAA asked detailed questions on how far back trees were from the house, whether he had a fire-resistant roof, and any combustible structures. He’s got a deck and its original. “It’s got a coating a few inches thick and is fire resistant,” he said.
After an onsite inspection, Joe was able to make the switch from Farmers to USAA. He’s become one of the lucky ones, but not before getting a glimpse of the headaches insurance companies can give policyholders.
Then during the New Year, the Sunsent fire came within two streets of Joe’s home. He is okay, but it was a wakeup call, and he is now re-evaluating his coverage going forward. Unfortunately, insurance continues to be on his mind, and it’s something that may never go away given the new normal in Los Angeles and California.
