Karen Lober says she feels screwed by her home insurance company. She bought her house on a mountain in Colfax in 2019, and State Farm insured it for the first year for $783. Then, she got a letter from State Farm that she was nonrenewed with no explanation. “The letter said nothing about why,” said Karen. “And I didn’t know to ask.”
In fact, when Karen bought the house, she cleaned up the property. “I call it the Little House of Horrors,” said Karen. “Broke my leg working on this property. I took tons of junk out of the yard and house, tore out the walls, parts of subfloor were missing. I had to get it habitable and then started working on the trees and yard,” she said. “I clean my property, I cleaned this whole mountain up,” she said. “I took some of the city’s trees out within a couple of hundred feet of the house, I didn’t even ask. I installed fire extinguishers, smoke alarms and I got a new roof.”
She talked to an insurance broker who told her to be careful about telling State Farm about all the upgrades on her property because if it increased the value, then the insurer might raise her premium. “He said to be careful, it could go both ways, help me or hurt me.”
She never informed State Farm of what she had done to mitigate fire risk and she never challenged the nonrenewal. Instead, when she was nonrenewed, she called every insurance broker in the phone book and discovered that no home insurer would sell her a policy. She had already heard that there was a last resort—the Fair Plan—and that it was bad news. All her neighbors were also getting nonrenewed and turning to the only option.
“There were already rumors going around the mountain about how the FAIR plan is not fair,” she said. “When I was on Nextdoor.com, everybody up here was saying UNFAIR Plan, this is ridiculous, just too much,” she said. “We are in a fire zone and left with no choices, I was forced into the FAIR plan–with a Travelers Difference in Conditions (DIC) policy.”
The DIC covers water damage, theft, and liability while the FAIR Plan covers fire—and for an additional fee covers internal explosion and windstorm. Karen was charged an annual premium of $1,200 in 2020 that just grew to an annual premium of $2,715 in 2024 for the package. The FAIR Plan itself advised her, she said, to buy the wrap around policy. According to the Travelers DIC information, to buy a DIC, the insured must have a FAIR Plan fire policy plus buy additional extended coverage from the FAIR Plan such as coverage for vandalism and malicious mischief, as well as for windstorm coverage.
But Karen never even took advantage of the fire coverage under the FAIR plan because the FAIR Plan’s website failures were too intimidating. After the River Fire struck in 2021 and she was evacuated for several days, she discovered internal smoke damage and used tape to take samples in case they were needed. She filled out the FAIR Plan’s claim form online. The form was regular sized when she filled it out. But when she was prompted to hit a button to file the claim, the entire claim form became tiny. Confused about what that meant, she never pressed the file button.
“The FAIR Plan covers nothing but two by fours, a couple of sticks and a shovel,” she said. “The wrap around covers I don’t know what. I am paying all this money and I don’t know what is covered.” The FAIR Plan policy renewal together with the DIC goes on for half a dozen pages in fine print that Karen finds hard to read or to understand.
“The FAIR plan doubled the already too high price, turning my mortgage upside down,” Karen said. “I now pay more in insurance premiums than the principal on my mortgage. I’m a fully vested teamster, a widow, single mom, disabled on a fixed income. The American dream is now the American nightmare. I have four roommates and I am still struggling. I am done financially.”
