Key Takeaways
- California law requires a 10-day free look period for property insurance policies
- California Fair Access to Insurance Requirements (FAIR) Plan provides coverage for high-risk properties
- California Residential Property Insurance Disclosure (CRPID) requires specific disclosures
- Insurers must provide 75 days notice for non-renewal of homeowners policies
- California law prohibits unfair discrimination in property insurance underwriting
California Homeowners Insurance Requirements
California has specific property insurance regulations that protect consumers and ensure adequate coverage availability.
Free Look Period
California provides a 10-day free look period for property insurance:
- Policyholder can return for full premium refund
- Begins when policy is delivered
- No questions asked, no penalty
- Applies to new property insurance policies
California FAIR Plan
The California FAIR Plan (Fair Access to Insurance Requirements) provides basic property insurance for high-risk properties:
What FAIR Plan Covers
| Coverage | Included |
|---|---|
| Fire and Lightning | Yes |
| Internal Explosion | Yes |
| Smoke Damage | Yes |
| Vandalism and Malicious Mischief | Optional |
| Windstorm | Optional |
| Liability | No (separate policy needed) |
When FAIR Plan Is Used
- Property located in high-risk wildfire areas
- Property has been declined by 3+ voluntary market insurers
- Property doesn't meet standard underwriting guidelines
- After major disasters when voluntary market tightens
Important: FAIR Plan is a last resort, not a first choice. It typically costs more and provides less coverage than voluntary market policies.
California Residential Property Insurance Disclosure (CRPID)
California requires specific disclosures for residential property insurance:
Required Disclosures
- Coverage limits and deductibles
- Earthquake coverage availability (or lack thereof)
- Flood insurance availability
- Replacement cost vs. actual cash value
- Policy exclusions and limitations
Cancellation and Non-Renewal Requirements
California has strict requirements for canceling or non-renewing property insurance:
Cancellation Notice Requirements
| Reason for Cancellation | Notice Required |
|---|---|
| Non-payment of premium | 10 days |
| Fraud or misrepresentation | 30 days |
| Material increase in hazard | 30 days |
| Physical changes to property | 30 days |
Non-Renewal Notice Requirements
| Timeframe | Requirement |
|---|---|
| Standard Non-Renewal | 75 days before expiration |
| Disaster Area | 1 year moratorium after declared disaster |
| Reason Required | Must state specific reason for non-renewal |
Wildfire Protection
California has special rules for wildfire-prone areas:
- Insurers cannot non-renew solely due to wildfire risk in certain areas
- 1-year moratorium on non-renewals after declared wildfire disaster
- FAIR Plan required to offer coverage if voluntary market unavailable
Earthquake Insurance
California has specific earthquake insurance requirements:
California Earthquake Authority (CEA)
- State-managed earthquake insurance program
- Offers standardized earthquake coverage
- Policies have deductibles of 5%, 10%, 15%, or 25%
- Covers dwelling, contents, and loss of use
Mandatory Offer
- Insurers must offer earthquake coverage with homeowners policies
- Consumers can decline in writing
- Earthquake coverage is always optional, never mandatory
Flood Insurance
- Standard property policies exclude flood damage
- National Flood Insurance Program (NFIP) provides coverage
- Agents must disclose flood insurance availability
How many days notice must a California insurer provide for non-renewal of a homeowners policy?
What does the California FAIR Plan provide?