Homeowners in California are increasingly facing unexpected policy cancellations or nonrenewals, often with little warning or a clear explanation. This issue has become especially common in areas vulnerable to wildfire, severe weather, or aging infrastructure, but it’s no longer just a rural or high-risk problem. Even in suburban neighborhoods and coastal communities, property owners are finding themselves suddenly uninsured. So what’s going on, and what can you do if it happens to you?
How Insurers Are Evaluating Risk
At the heart of this issue is a shift in how insurance companies assess risk. Where insurers once relied on in-person inspections and historical data, many are now turning to remote technologies like aerial photography, third-party data vendors, and A.I. analysis. These tools can flag potential risks such as roof damage or vegetation overgrowth, without ever sending someone to your property. While that may seem efficient, the process is often error-prone. For example, in a lawsuit filed in San Diego, a homeowner claims her policy was canceled based on an aerial image that falsely showed roof damage. Two licensed inspectors later found no such issues.
Behind the Cancellations: Business Decisions or Bad Faith?
The broader concern is that some insurers appear to be using these questionable assessments as a reason to drop long-term policyholders. In many cases, the cancellations affect homeowners who have never filed a claim or have maintained their properties well. Critics argue this may be a cost-saving strategy — an attempt to phase out older, lower-premium policies or reduce exposure in volatile markets.
What to Do If Your Policy Is Dropped
If your policy has been canceled, don’t panic — but do act quickly. Start by requesting a written explanation. Insurers in California are legally required to disclose why a policy is being canceled or not renewed. If the reasoning involves property damage, ask for the documentation and consider requesting a physical reinspection. You may be able to dispute the findings, especially if you have maintenance records or recent photographs of your property.
It’s also important to explore alternative coverage options. The California FAIR Plan offers basic coverage for homeowners who can’t find insurance through traditional carriers, though it typically requires supplemental policies. A knowledgeable insurance broker can help you navigate this landscape and may be able to connect you with insurers still writing policies in your area.
When to Involve a Legal Team
If you believe your coverage was dropped unfairly, or if your insurer acted in bad faith, it may be time to speak with an attorney. At McLeod Law Group, we help homeowners through the western United States fight back against wrongful insurance cancellations and bad faith practices.
Whether your coverage was denied based on faulty data or you’re struggling to get a straight answer from your insurer, we’re here to help. We’ve handled cases just like yours and know how to hold insurance companies accountable.If your policy has been canceled and you’re not sure what to do next, reach out for a consultation. We’ll help you understand your rights and your options.