Non-renewed in California? FAIR Plan and DIC explained

A non-renewal letter feels like a verdict on your home. It isn't. It's a deadline. Homeowners who start early usually end up with solid coverage, either from another carrier or from a FAIR Plan and DIC combination. Homeowners who wait risk a gap. Here's how to use the time you have.

Why are California homeowners getting non-renewed?

Most non-renewals we see today come from carriers pulling back in areas they see as high wildfire risk, or tightening what they'll write statewide. Other common reasons include the condition of the roof or home, changes that increase the hazard, and claims history. Your notice has to tell you the reason, so read it closely. Sometimes the fix is something you can address, like a roof replacement or brush clearance, that makes the home insurable again with another carrier.

How much notice does my insurer have to give?

According to the California Department of Insurance, a written notice of non-renewal must be sent to you at least 75 days before the expiration date, and it must include the reason. If the insurer doesn't give proper notice, the existing policy continues for 75 days from the date notice is given. See the CDI residential insurance guide.

Non-renewal is different from cancellation. Once a policy has been in effect for 60 days, an insurer can only cancel mid-term for specific reasons, such as nonpayment, fraud, material misrepresentation or physical changes that increase the hazard.

What is the one-year moratorium after a wildfire?

After the Governor declares a state of emergency for a wildfire, the Department of Insurance works with CAL FIRE and the Governor's Office of Emergency Services to identify the fire perimeter and adjacent ZIP codes. Residential policyholders in those areas are protected from cancellation or non-renewal due to wildfire risk for one year from the date of the emergency declaration. This includes homeowners who had no loss at all. It comes from California Insurance Code section 675.1.

Keep in mind what it doesn't do. It only blocks non-renewals based on wildfire risk, and it's temporary. When it ends, a carrier can non-renew with normal notice. If you're in a moratorium ZIP code, use that year to line up your next policy. See CDI's moratorium page and ZIP code lists.

What does the California FAIR Plan cover?

The FAIR Plan is an association of all property insurers licensed in California. It exists to provide basic fire coverage for property that private insurers won't write. It's a last resort, not a full homeowners policy.

• Covered: fire and lightning, internal explosion, and smoke, for the dwelling (owner or tenant occupied, up to 4 units) and personal property.
• Optional, for extra cost: coverage such as vandalism and malicious mischief.
• Not included: liability, theft and burglary, and water damage.

The FAIR Plan itself does not sell DIC policies. You buy the DIC separately, through an agent, from a private insurer.

What does a DIC policy add?

A difference-in-conditions policy is built to sit on top of a FAIR Plan policy. According to the FAIR Plan, DIC policies provide coverages it doesn't offer, such as water damage, theft and liability, so the two together work similar to a comprehensive homeowners policy.

• Personal liability: if someone is hurt on your property or you're responsible for damage to others. This is the gap that worries us most with FAIR Plan alone.
• Theft: for your belongings.
• Water damage: for covered events like a burst pipe.
• Other perils the FAIR Plan's named-peril form leaves out, depending on the DIC carrier's form.

DIC forms vary by carrier, so we read the forms and compare them with you, not just the price.

FAIR Plan alone vs FAIR Plan + DIC vs a standard HO-3

Earthquake and flood are not part of a standard homeowners policy or the FAIR Plan. They're bought separately in any of these setups.

What should I do after a non-renewal notice?

• Read the notice. Note the expiration date and the reason given.
• Check for a moratorium. Look up your ZIP code on the CDI moratorium list if there's been a recent declared wildfire emergency.
• Fix what you can. Roof, brush clearance and home hardening can open doors with other carriers.
• Shop carriers still writing in California. Start right away. Underwriting and inspections take time.
• If no carrier will write it, apply to the FAIR Plan. Set the dwelling limit to what it would cost to rebuild.
• Add a DIC policy so liability, theft and water damage aren't left uncovered.
• Tell your lender the new coverage details before the old policy ends.
• Review every year. Once carriers reopen in your area, you may be able to move back to a single policy.

How Redline helps

We're an independent agency in Colton licensed for home insurance in California. We compare carriers still writing in the state first. If the FAIR Plan is the only option for your property, we set up the FAIR Plan and pair it with a DIC policy, so you're not left with fire-only coverage.