Scott D. lived in densely populated Southern California for 15 years before getting away from it all. In 2005, he moved up North to sparsely populated El Dorado County and into a custom-built 3,700-square foot home in Placerville. The entire time Scott lived in California AAA was his home insurer. But in 2019, AAA dumped him, telling him that his property was too high a fire risk.

Up until then, his annual premium had been climbing by a few hundred dollars a year for several years in a row, reaching $2,127 in 2019. Scott had never filed a single claim in the 33 years that AAA insured him. 

“I received a letter, dated December 9, 2019, that said, ‘Your AAA homeowner insurance policy is nonrenewing as it no longer qualifies for coverage with us,’” said Scott. “’Specifically, the property listed above does not meet our guidelines for wildfire risk assessment, which includes one or more of the following.’” The letter listed bullets on deficiencies including flammable vegetation on and around the property,  fire season wind patterns, road accessibility for emergency response, and the property’s slope. 

None of that was accurate, Scott said. 

“On my property everything was cleared. All the trees on the property are limbed 15 feet to 30 feet off the ground.  We have plenty of room for emergency responders and a huge fire department turnaround. We are only a quarter of a mile back in from the main thoroughfare. And not only that, Eldorado County and the fire department had to authorize this accessibility when this home was built.  Slope isn’t necessarily a problem if your property is cleared of debris.”  

Scott took several steps when his insurance was cancelled. He called AAA, Insurance Commissioner Ricardo Lara, and started calling every home insurer he could think of for a new home policy both in-state and out of state. Lara’s office never responded and, as far as a new home insurance policy, “there was nothing to be had,” he said.  

“I went even to the point where I was going to put in a drafting fire hydrant here.  A drafting hydrant meets fire department standards for hooking up a fire truck hose and delivering enough flow from a pressurized underground water tank to put out a fire at a house my size. It was going to cost me $10,000 to put it in.  None of the insurers, including California Fair Plan, would take that for a discount even though it was authorized by El Dorado County, Eldorado Fire Department and CAL FIRE.”

In February 2020, Scott ended up pushed into the CA FAIR Plan covering only damage from wildfire. His mortgage lender required him to also get a wraparound insurance policy that covers everything else that a home insurance policy does from water damage to liability coverage. Today, his combined annual premium is $10,250—despite his meticulous steps to harden his home and going above and beyond home all county requirements to prevent fire damage. 

Only insurance brokers can get homeowners onto the CA FAIR Plan, so Scott went to the broker who had sold him his AAA insurance for both the FAIR Plan and wraparound coverage—provided by AAA.

“The homeowner has to rely on the same insurance broker that cancels your home insurance and then puts you on the FAIR Plan and sells you a wrap-round policy,” Scott said. “It is a conflict of interest because the exact same insurance company that you originally had for your homeowners policy has cancelled you and now is sending you to the CA FAIR Plan that it is a part of to make even more money off of you.”

Scott also asked  his insurance broker about his insurance rating.  The broker gave him an Insurance Services Office (ISO) rating that is provided to fire departments and insurance companies. The Insurance Services Office is a subsidiary of Verisk Analytics, a for profit provider of statistical, actuarial, underwriting and claims information serving the insurance industry.  

ISO grades communities from a 1 to a 10,  representing communities with effective fire services and dependable water supplies to those without, Scott said.  ISO can also use “split classifications” to, they say, reflect the risk of loss more precisely by dividing communities into properties within 5 miles of a fire department but within 1,000 feet or farther away from creditable water supplies.

Those properties within 1,000 feet of a water supply—usually a fire hydrant—are eligible for a class rating of 1-8, said Scott, with 1 being the most dependable and effective services to 8 being near the bottom of the class. ISO uses algorithms to grade communities and to set individual premiums, he said. “The factors they put in include proximity to fire department, how many trees you have, slope of your property, clearance of vegetation from your home, distance from a fire hydrant, road width and accessibility, vegetation density, all the way down to your roof, for example.” 

The risk assessment on Scott’s home was a 6 out of 10. “The rating isn’t about not giving you a break, it’s about helping the insurance companies charge higher premiums,” Scott said.  Scott argued with the CA FAIR Plan through his insurance broker about his premium and how he should be credited for steps he has taken to mitigate fire damage in the event of a wildfire. 

“It’s a moving target,” Scott said. 

“The FAIR Plan will say, first you are this far away from a fire station and that’s outside of our range, and I say, no we’re not. I am from this distance of a fire station. Then, the FAIR Plan will say—ok but you are this far away from a fire hydrant. That’s when I was going to put in a drafting fire hydrant on my property. But then they say, now it’s a slope issue. It’s a constant fight.”

Scott said that his insurance broker also showed him old, outdated ISO imagery of his property from before he mitigated for fire risk in 2006. The photos did not show ongoing property maintenance.

Just one year after he got onto the FAIR Plan, Scott discovered that he was in a Firewise community and should have been getting a discount for that. His community qualified for it by following the National Fire Protection Association’s guidelines to prepare for wildfires, which designated the community fire safe. “I called my AAA broker and I said, ‘hey wait a minute we are a Firewise community, and we get a discount’ and he said, ‘Yes you do and I will implement it now.’” 

Scott got the discount going forward, but never got a retroactive refund due to the mistake. Many agents have little training on the CA FAIR Plan and its new technology platform that they may not know how to navigate to get the best discounts for homeowners.

Scott found out you could get additional discounts by submitting an individual dwelling fire supplemental application for wildfire hardening discounts. He filled it out and sent it to his broker who then sent it to the Fair Plan in the fall of 2023. Scott qualified for two discounts—one for meeting wildfire hardening requirements for a structure discount on his home and the other for meeting the requirements for wildfire hardening for his immediate surroundings.  He has also sent his broker information on the drafting fire hydrant he was going to put in to see if the FAIR Plan will give him a discount if he installs it within 100 feet of his home.

Scott meets the requirements for the structure and surroundings discounts. He has a Class A fire rated roof, half a foot of noncombustible materials at the bottom of all exterior walls, a 5-foot ember resistant zone around the home, including wrought iron fencing, wire mesh covering all vents, upgraded windows, enclosed eaves, and cleared vegetation under all decks. He has no outbuildings or sheds within 30 feet of his home, trims his trees, and keeps his defensible space cleared of brush and debris.

In January 2024, he called the broker and resent him the original document, asking him to pressure the CA FAIR Plan for an answer he had not gotten.

“All of a sudden who shows up at my house is an inspector for the CA FAIR plan. I said to him, ‘I want you to notice that the fire hardening says that you only have to clean 100 feet from your property and I have lased the property and I am sitting at 300 to 550 feet all the way around the property that is cleared of all underbrush and the trees are limbed 15-30 feet high.’ And then the CA Fair plan inspector said. ‘That doesn’t matter.’ They don’t take that into account, and I am sitting there going, ‘Are you kidding me?’”

Scott also pointed out that the decking was painted with fire-resistant paint, something not listed as a factor for a discount. The inspector told him that “had no bearing” on his inspection. “I went over and above to protect my home and they won’t give me a discount,” he said. 

About a week after the CA FAIR plan inspector visited, Scott had two CAL FIRE inspectors come to walk the property. “Cal FIRE looked at the property and said there are no issues and your property is more than defensible, more defensible than most homes. I have their letter acknowledging this, with no warnings or issues noted regarding the property.”

Bills from the mortgage lender still do not reflect any FAIR Plan discounts and the lender has told Scott that nothing has been received yet from the FAIR Plan acknowledging he has met the requirements and that they should be applied.  

“The FAIR Plan is run by the insurance companies,” Scott said. “They are charging these exorbitant rates and what goes on is then the money that goes into the FAIR Plan is redistributed among the insurance industry. They are getting their coffers filled by hitting us as homeowners. 

“Our legislature and Governor and Insurance Commissioner, they have all received monies, funds into their campaign coffers from the insurance industry, PG&E and all the rest. It’s PG&E’s fault. You know how many billions of dollars those wildfires cost and what they are on the hook for. We have had the PUC come in and do rate increases. It is insane. And who is helping us? You rely on your legislature, and Governor and Insurance Commissioner, and the PUC and none of them are helping the average citizen. This is appalling.”