Uninsurable

Uninsurable

Kim is running around the house singing Uninsurable to the tune of Unforgettable by Nat King Cole. I got a notice yesterday from my long-time insurer, Chubb, who advised me that they will not be renewing my homeowners insurance coverage in 2022 due to the California wildfire issue. It seems that they have struck some sort of reinsurance deal that precludes them for renewing us hard-case daredevil Californians who choose to live in harm’s way. I find that particularly strange since I have been a loyal Chubb client for thirty years, ever since i ran the Bankers Trust Private Banking business and we advised all our high net worth clients to use Chubb since they were the most reliable insurer from a risk standpoint and their claims payment record was second to none. They prided themselves in paying all claims no fuss, no muss. My experience up until last year when they denied my deck renovation claim was excellent, but I was certainly surprised they whiffed on the expensive deck replacement since I felt it was more damaged by casualty than by normal wear and tear. Nevertheless, it would have taken a lot for me to switch from Chubb, but I didn’t have to since they fired me.

I use AON as my insurance brokerage and they place all of my coverage, which now boils down to two homes, two cars and two motorcycles. I have always felt like I pay through the nose for Chubb and AON coverage, but have always found that I made up for it in convenience and personal service. I can always call my AON broker and she is right there to help as much as possible, even when it came to the deck (she tried, but failed there). This time, when I sent her the notice, which Chubb tried to make as personal and sympathetic as possible, she suggested that we would talk today because she was already on it, implying that she had a solution. Then, i got an email from her saying she got tied up in other business meetings and suggested a call tomorrow. Her update for me was that she had reached out to AIG, Cincinnati, Safeco, Berkshire Hathaway, and PURE and had come up goose egg. All declines were due to wildfire risk. She explained that there were still options like the FAIR program through California and its uninsurable risk program. She also suggested that I call State Farm and/or USAA (she was nice enough to suggest a broker who could do that). She also sent me a lint to an article that explains how this is happening all across California at this time. This was starting to sound like a thanks, but no thanks form of “It sucks to be you” kinda message.

I called the State Farm people and they were able to look up my address and tell me on the spot I did not fall within their incurable zone. I guess I know what redlining feels like now. They were, however, nice enough to pass me off to a broker that they thought might be able to help me. They owed me nothing, so that actually was a nice gesture. The woman who called me represented Farmers Insurance, which is a big California insurance company. It seems they are more than happy to quote me and I spent some time on the phone with the agent helping her fill out the underwriting forms. I went through all the details that AON has shielded me from for years and I found it far less irritating than I thought it might be. At one crucial point where I asked if they could provide an umbrella excess liability policy (something insurers don’t like to offer unless they have the majority of your business), she mentioned that I could get 25% my homeowners coverage if I gave Farmers my auto coverage as well. There you have it, the play for the whole tamale, I respect that and gave her the information, which she apparently had on her screen anyway (so much for AON or Chubb privacy policies).

She will be calling me back with a quote and I am going to take a wild guess that it will be less than I currently pay Chubb, since Chubb is generally so outrageously priced. At least I hope that is the case, but truth be told, this is shaping up like a seller’s market and I need coverage. I did lob a call into my private bankers and told them that since they hold the mortgage (relatively small though it is) so maybe they could offer some suggestions. Crickets so far. I will get the Farmers quote and I will speak to AON in the morning, but I think this is grounds for moving the business to this new broker who is arranging the Farmer’s quote. I think beyond the California house, the cars and motorcycles (all out here now) and the excess liability policy, the only thing I have besides that is the house in Ithaca. And that house is shifting from homeowners to renters, so it seems like unless AON pulls a rabbit out of the hat or Farmer’s whiffs, I will be saying goodbye to both Chubb and AON once and for all.

Being a man of some corpulence, I have always liked the name Chubb for my insurer. I almost wish they were my life insurer as well, but they do not do life insurance to my knowledge. My life coverage comes from a blend of Northwestern Mutual, Equitable and Connecticut General (CIGNA). It’s funny, in my middle years I worried about my weight and the possibility that it might make me uninsurable with those carriers (other than the whole life policies I had purchased when younger). Strangely enough, I have never had a problem getting life insurance in whatever quantity I have wanted. Somewhere along the line they either figured I was an OK risk (which turns out to have been the case…go figure) or they just make so damn much money…longevity being the great bailout for the life industry. Who knew that it would be my property and casualty insurance that was going to move into the world of uninsurability.

I don’t really know if Lloyds still underwrites difficult to place risks the way it used to, but if Berkshire Hathaway isn’t playing, i bet not. Berkshire, unbeknownst to most small investors, got its start (meaning the Oracle of Omaha, Warren Buffet) insuring catastrophic risk on a contra cyclical basis, writing when the rates when up due to higher risk perception and declining when rates went down. One would think that this is just such a time when anyone could justify raising rates to unreasonable levels and just shrug and send people articles about the massive wildfire risks in California.

While I am reasonably sure I will be able to get insurance in one form or another, I kinda like the feeling that I am such a bad ass that I am now in an uninsurable category. Is it because I am almost 68 years old and still much heavier than the charts suggest I should be? Is it because I ride motorcycles fast up and down the hills of California? Or maybe its because I am opening up post-Pandemic and starting to travel once again and throwing caution to the wind? No, its because I live in a part of the country that Global Warming has impacted in such a way that wildfire risk is at all time highs. I guess the folks in the flooding, hurricane, tidal surge, tornado, derecho and blizzard parts of the country are next. Then, once the insurers have jacked up their premiums to the point that they like the risk again and are prepared to compete with one another instead of tossing us over the fence to the next more stupid underwriter, they’ll all be back. As Nat King Cole might say:

“That’s why, darling, it’s incredible, that someone so uninsurable, thinks that I am uninsurable, too.”