In the end, Mercury Insurance made Magda Molina and her husband, Nathan Prevost, spend almost $8,000 for nothing. And all it bought them was a one-way ticket to getting dropped from their home insurance plan.
The past year has been an incredibly frustrating journey down the insurance rabbit hole for Magda and Nathan. Out-of-the-blue notices of dropped coverage, shotgun fixes, emails to nowhere, and a nightmare permitting process have left the couple jaded. Their story is a cautionary tale: even if you do everything you’re told to do in order to stay insured, the rules keep changing.
Magda and Nathan live in a 100-year-old property in Hollywood. Behind their craftsman bungalow is a duplex that is their ticket to retirement. They rent it out, so they rely on that income. They’ve done a lot of work on it themselves. They’ve never filed a claim in the 25 years they’ve resided there, and they don’t live in a fire, flood or landslide risk zone. For nearly the past 15 years they have been insured by Liberty Mutual. They’ve been under two plans—one for the home they live in, and the other for their rental property. Their premium cost for the rental was about average for California.
Then in the Fall of 2023, they got a letter from Liberty Mutual saying the company won’t renew their landlord policy because they would no longer be offering such a policy in California. But their broker found them a comparably priced policy with Mercury, around $1,100-$1,200, with a $5,000 deductible.
In came the winter, an especially rainy one for Southern California, but their roof did not leak. During one January morning, bright and early, Magada and Nathan got a surprise visitor at their door from a Mercury agent.
“I just got out of the shower, and I’m like, can I help you?” recalled Magda. “And he’s like, ‘I’m here to take pictures of your duplex.’”
He agreed to wait five minutes while she got dressed.
“I get ready, I come out there, and he’s gone,” said Magda.
Nathan called up Mercury to see what that was all about. This time they made an appointment, and an agent showed up to take photos of the roof on their rental property.
There was radio silence from Mercury for about a month.
Then the bad news came in the mail.
“We get a notice saying, ‘You need to replace your roof. Otherwise, we’re going to drop you,’” said Magda.
Mercury gave them 30 days to fix the issue.
“And we’re in the middle of a rainy season, so we’re kind of freaking out,” said Magda. “We’re, like, our roof is not leaking. Our roof is fine.”
The roof is about 15 years old and in good condition, according to the couple.
The Mercury letter also said to contact an agent, who told them there was some “granular loss” that could be remediated by repairing shingles.
Good news, they thought.
“We’ll just replace the shingles,” said Nathan. “And they said, ‘Well, if you do the work yourself, it needs to be done with permits, and we need to have proof of that.’”
Per California code, you’re allowed to have two layers of shingles. Magda and Nathan confirmed what they had to do with a second agent, and got it all in writing, according to the couple.
“We got quotes from about 10 or 12 different companies, all licensed contractors,” said Magda. In the end they went with the most affordable quote, $7,500. They borrowed money to finance the job.
“We were super stressed,” said Magda.
But the mitigation was done on time, and it was a solid job. The couple took a sigh or relief—sort of. Another waiting game ensued as five months passed without them hearing anything from Mercury.
“We figured, alright. I guess we’re all good,” said Nathan.
After a vacation, the couple came home to the bad news in the mailbox. There in loud caps-lock the letter screamed:
NON-RENEWAL-UNDERWRTING REASONS
REQUESTED INFORMATION NOT RECEIVED: ACCEPTABLE PROOF OF ROOF REPLACEMENT
They were getting dropped because they didn’t replace the roof. They immediately called Mercury, who changed their story.
“And what they said is, ‘No. We didn’t say that you could add a layer of shingles. We needed you to replace the whole roof.’ We’re like, what? That’s not what they said,” said Nathan.
In the end, Mercury pointed to the word “replace” in the letter they sent, even though Mercury told them verbally that they could just replace a layer of shingles.
“If the agents we spoke to had told us we needed a new roof, there’s no way we would have spent that money on a new layer of shingles,” said Magda.
Nathan said, “I’m in construction, so I understand the language. You can’t pull the wool over my eyes. I understand what needs to be done.”
A new roof meant $30,000, money they didn’t have.
The couple told their broker, whose only help was finding them a plan that was double the cost and with a $10,000 deductible.
Meanwhile, Magda made sure to spread their story as far and wide as she could: the Department of Insurance, journalists and local politicians. The best she got was a canned response from the insurance department that apologized and blamed wildfires. The couple does not live in a fire risk area. She could tell that whoever replied to her didn’t read her email. She might as well have asked Chat GPT.
“And then I never heard back from him,” said Magda. “I was so angry. I mean, we felt so powerless and so taken advantage of. It was just a horrible feeling,” she recalled.
The couple’s journey through insurance purgatory isn’t over yet. They canceled their Mercury premium and are back to square one, shopping for a new plan, with a new broker. Currently they only have liability insurance on the rental unit.
“The structure is not protected anymore because all that we could find was just too expensive. So we’ll wait till we get officially dropped, and then we’ll find another option,” said Magda.
Unfortunately for them, it looks like their limited options are leading them to the FAIR Plan, the skimpy home insurance plan that is a death sentence for those who can’t find insurance in California.
Looking back, it all felt planned out.
“My conspiracy theory is that that’s their ploy for all of their customers that they don’t want to insure anymore,” said Nathan. “Insurers say, ‘Okay. You need a new roof, or we’re not going to insure you.’ So somebody figures out how to justify that.”
“It feels like they’re trying to get small people, small landlords like us out of California.” Meanwhile, the largest companies continue to thrive, said the couple.
Nathan and Magda are in their 50s and they love California. Nathan grew up in the state. But the thought of moving has crossed their mind.
“We both love living here, and we’ve worked hard to create this little retirement plan. But it feels like we’re being forced out of it by a big insurance company, and it’s not right,” said Magda.