In recent months, I have had conversations with some of you who have experienced a significant surge—in non-renewal notices from insurance carriers. Upon further investigation, I have discovered that there is approximately a 300-400% increase of non-renewal notices in the state of California regarding policies for residential, multi-family, and commercial properties. The reasoning that they are increasingly being dropped or not renewed is due to the condition of their roofs. These notices often arrive unexpectedly, based on satellite imagery or drone inspections conducted by the insurers.
Understanding the Shift
Historically, roof conditions have not been a primary reason for policy non-renewal in California. However, recent regulatory changes have altered this landscape. The California Department of Insurance has imposed strict limitations on how much carriers can increase insurance rates, which are not aligned with rising costs due to inflation and other factors impacting carriers in the state. Additionally, insurance companies have not been allowed to use predictive modeling in their rate filings. As a result, large carriers like State Farm, Farmers, and Allstate, are considering pulling out of California altogether. In response, other carriers are looking for loopholes to avoid policy renewals, and roof conditions have become an easy target.
Impact on Property Owners
Property owners are now faced with difficult decisions. To maintain their coverage, they must either invest in a roof replacement, undertake significant repairs, or obtain a professional roofing contractor’s inspection report stating that the roof is in good condition with at least five years of life remaining. Receiving such notices without prior warning is not only stressful but also financially burdensome. The sudden demand for roof repairs or replacements can disrupt budgets and cause significant inconvenience. The recent fires have exacerbated the situation, with insurers taking a more critical stance on property maintenance to mitigate their risk.
Why Roof Conditions?
Roofs are crucial for protecting homes and buildings from weather-related damages, and a compromised roof can lead to costly claims. By targeting roof conditions, carriers are mitigating their risk exposure in a way that’s currently permissible under regulatory constraints.
Taking Action
The recent wave of policy non-renewals due to roof conditions is a stark reminder of the importance of regular roof maintenance. While the immediate impact on residential, multi-family, and commercial property owners can be daunting, it is also an opportunity for proactive care and improvement of your property.
In the High Desert region and the Inland Empire, which includes areas like Apple Valley, Hesperia, Victorville, Fontana, Rancho Cucamonga, Redlands, the arid climate and temperature extremes can accelerate roof wear and tear. Regular inspections and maintenance are essential to ensure roofs remain in good condition and to prevent unexpected insurance issues.
In A Nutshell . . .
By staying proactive with roof maintenance, as a property owner, you can not only comply with insurance requirements but also extend the lifespan of your roof, ultimately saving money and ensuring the safety and comfort of your home and or business.