Insurance companies dropping fire coverage for homeowners in high risk areas

Some insurance companies have decided, that offering fire coverage in the Oakland hills just isn't worth the risk anymore.

For the past 15 years Fred Perkins has lived in the Oakland hills, taking meticulous care of his home. But without warning, he says he recently received a letter from his insurance company Liberty Mutual informing him it won't be renewing his fire insurance.

"After 15 years i was very disappointed," said Perkins.

Perkins home was among the more than 3,000 destroyed in the Oakland Hills  Firestorm in October 1991, although he wasn't living there at the time. He bought it years after it was rebuilt, and had no problem getting fire coverage, until now.

"I don't think it's fair. I think they should at a minimum come to the property and tell me what the issues are," said Perkins.

Perkins is among a growing number of homeowners in the East Bay who are seeing their fire insurance being canceled.

California Insurance Commissioner records show a 15 percent increase in cancellations in the Oakland hills between 2015 and 2016, the most recent data available.

"They are updating their models. And they are concluding some homes are too risky to write insurance for. So they are either non-renewing or declining to write new insurance," said California Insurance Commissioner Dave Jones. 

Jones says it hasn't reached  crisis proportions.  But he says it is a growing problem in areas where neighborhoods meet wildlands.

"We've discovered the models don't include the sorts of things homeowners are doing to reduce the risk of fire. It doesn't include for instance a new roof that is impervious to embers," said Jones.

Those who lose insurance are advised to check with other carriers. And as a last resort people can get insurance through the state's mandated "Fair Plan."

Perkins has obtained an insurance broker to help him.

"If you play this out, the way it sounds, virtually everyone could lose their insurance.," said Perkins.

We called the Property Casualty Insurers Association for comment. We did not hear back.