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Homeowners sound the alarm after highly dubious nonrenewal notices: 'This is a complete scam'

"How am I supposed to provide you with proof?"

"How am I supposed to provide you with proof?"

Photo Credit: iStock

California homeowners are sounding the alarm after questionable inspection practices left them without insurance — or rushing to fix nonexistent damage in hopes of salvaging their coverage. 

What's happening?

As detailed by The San Francisco Standard, insurers in Northern California sent nonrenewal notices to more than 25 homeowners, claiming they discovered roof damage. Frequently, their evidence included low-resolution aerial footage. In one instance, an insurer sent a homeowner an image of their neighbor's roof as proof of inspection. 

As a result, homeowners say they are paying for unnecessary work on their roofs — or at least private inspections that can push back against the flimsy evidence sent by insurers, though even that process isn't always cut and dried. 

"How am I supposed to provide you with proof that I've removed mold or algae when there was no mold or algae that ever existed?" Kira Harvath told The Standard. 

"This is good for us in terms of, you know, the workload, but it's very dishonest to the homeowners and insurance clients," home inspector and roofing contractor Erast Dasari said. "This is a complete scam. And I hate scams."

Why is this important?

Insurance premiums across the United States show no signs of going down. Business analytics firm S&P Global Market Intelligence found that rates rose 12% in 2023 and then another 6.9% over the first six months of 2024, according to Consumer Reports

Once homeowners lose coverage, new or state-run coverage is usually much pricier to obtain. And when companies operate on muddled data, consumers pay the price. 

"What the public doesn't generally understand is, once you get an adverse underwriting risk decision, the other insurance carriers know about it," Michelle Meyers, an attorney with Singleton Schreiber, told The Standard. "You can also be adversely affected by your mortgage holder — your interest rate could change."

What can be done about this?

More intense and frequent extreme weather events are one of the primary drivers of this expensive premium surge, causing insurers to pull out of some states altogether, including California. The Department of Insurance found that 2.8 million residents received nonrenewal notices over the past few years, as reported by The Standard

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As the majority of the pollution overheating the planet — and supercharging our weather — comes from dirty fuels, reducing those emissions is key to bringing things back into balance.

Structurally, that could look like investing in a more robust public transportation system and walkable and bikeable infrastructure (which most Americans support, according to a poll by Hattaway Communications). Individually, households could upgrade to energy-efficient appliances that will also slash their monthly utility bills. 

However, in the short term, officials are raising awareness about the problem and taking steps to protect homeowners. In some states, including Pennsylvania, insurance departments have warned insurers that they can't use photos as the basis for nonrenewals, per The Standard. Instead, they must do in-person inspections. 

Consumer Watchdog Executive Director Carmen Balber has also called for stronger regulations regarding the use of aerial footage in the insurance industry.

"It's really a wild west when it comes to this aerial imagery, and we desperately need action by the insurance commissioner to rein in companies' practices," Balber told The Standard.

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