This has been my experience when the lender screws up and fails to accurately record the insurance information. Then, near the expiration date, when they check, and find nothing, one gets a nasty-gram in the mail berating one for failing to maintain insurance, and indicating that if they don't get proof of insurance within 15 days of the date on the letter (of which at least five days has usually already lapsed), they will apply their own insurance, to the tune of 4x the cost of the actual insurance that is still valid and active.

Note that this is sometimes the result of those in high risk situations managing to get the legislature to require the risk to be spread to others to keep their rates from being insane. (Florida is a prime example--they're spreading the cost from property on the front line for hurricane damage across wider areas, so now everybody's insurance is high rather than some being completely uninsurable.)

While I have not kept up with the California situation I suspect something of the sort is going on, they aren't being allowed to look at local wildfire risk in setting premiums.

(I work in pricing for a large insurer)

IF Californians don't change their collective behavior around addressing the issues related to wildfire risk, its unlikely they'll be able to maintain coverage.

Put differently, if a fire were to happen and this open air mechanics/tire shop were to ignite and destroy the three neighboring properties, is this homeowner entitled enough to pay all damages caused by his negligent storage of combustible materials?

[edit] Plenty of notice should have been provided so the property owner had an opportunity to address the issues found, which may or may not have happened. We only have one side of the story here.

Again, a description like really misrepresents the facts. The guy appears to own 2, possible 3 motor vehicles, and has two sets of 4 tires. It looks as if he had hoped to upgrade one of his vehicles by putting some shiny new wheels on it. O am not a car guy, but this looked to me like some personal property stored in his yard, not a hobby that had spun out of control. If he had stored them in a shed or covered storage area nobody would have said anything (because they wouldn't have seen it) even though the risk would have been identical or greater. There's no particular reason to expect a fire to break out in the middle of a subdivision, tires aren't known for just spontaneously bursting into flame.

By contrast, in my neighborhood there is a tire business of some kind at one end of a residential street, which must have 2-300 tires stacked up, directly adjacent to a bunch of houses and a freeway overpass. They've been there for man¥ years so I assume it's a normal business with normal permits, even though it's a massive fire hazard with a higher risk of a fire breaking out from the unpredictable nature of commercial traffic, industrial equipment, vandalism/arson etc.

The main issue for insurance companies arises from a combination of California's increasingly hot and dry climate and the fact that most uses here are made out of wood and thus extremely susceptible to fire damage. The people rationalizing the insurance company's decision as if this guy somehow had it coming are BSing themselves.

5 cars. 1 on street, 3 porch, 1 tarp. Most likely two more in double garage.

>and has two sets of 4 tires

Over 30 tires, some truck sized (bigger than what that astro van? uses). Rusting engine block, heads, plus transmission case, exhaust and fender/hood in the grass.

Reporter material shows fresh garbage bags in the yard suggesting dude started cleaning the moment he got the rejection. Whats more drone footage looks to be recorded after on the ground clips, with backyard meticulously cleaned, things neatly stacked (still 6 piles of tires) and overgrowth mowed.

>in my neighborhood there is a tire business

In commercial zoning, paying commercial insurance.

To you it may not seem significant but to a wildfire risk specialist, these are precisely the kinds of hazards were looking for.

The standards are high, but they are so for a reason. We're losing thousands of homes per season to wildfire.

Was it bad customer service to just drop him? Yes. Should he have the opportunity to mitigate? Absolutely.

But ignorance of your risk doesn't mean some one else is obligated to take the other side of that bet. I've said it a couple times else where. If insurance companies thought they could still be writing policies in California, they would. It's billions of dollars in annual premium they are passing on. They aren't doing so because, yes, storing tires against your house is significant enough of a risk factor to warrant non-renewal. Companies like State Farm would rather pull back entirely than accept the risk.

Wonder if those tyres would change that risk factor, as tyres burn pretty well.

Are you sure this is correct? In this situation, lenders will usually do something called a force-placed insurance: https://www.consumerfinance.gov/rules-policy/regulations/102....

But if this happens in sufficient numbers, then lenders will likely rethink that policy. No lender wants to foreclose, and particularly if there's no chance that they'll be able to sell the property for enough to cover the costs of foreclosing.

https://www.kpbs.org/news/economy/2023/07/07/californias-hom...

That should be illegal for the foreclosure. There should be a grace period. What if your insurance company goes bankrupt, or some other calamity?

Without an active policy, the lender is subject to much greater risk. If the house burns down sans insurance, the lender is now SOL.

And as the sibling response states, foreclosure is rarely a fast process. The problem is it can be very hard to find a policy if there's a gap in coverage, even more so if insurers are leaving the market.

CA and FL have their own problems due to local weather/climate (fires, hurricanes) and insurance regulations. Insurers are jacking up rates in FL and leaving that market. I'm not as familiar with CA, but it sounds like they're doing the same there.