Couple faces losing home over home insurance coverage denial

SANTA ROSA, Calif. (KRON) — The home insurance crisis in California is now affecting a neighborhood in Santa Rosa.

Right above the homes on San Aleso court in Santa Rosa, you can still see charred trees from the glass fire in 2020.

“That came about 75 yards from out front door,” Gretchen Melendy said.

While the flames got close, Gretchen and Rick Melendy’s home survived. They’ve experienced three fires while living here for 22 years and have always insured their home with Farmers Insurance up until two weeks when the couple got a letter from the company saying their policy was canceled.

“I feel abandoned; I feel scared,” Rick Melendy said. “Not a good feeling”

“No talk of mitigation looking at fending or foliage,” Gretchen Melendy added. “Just a flat cancel with no chance of renewal. We’ve never filed a claim; It’s all due to out address being close to a wildfire area.”

The two quickly hired insurance brokers to see which company would insure their home.
But they had no such luck.

“They went out looking for insurance for us. We were denied 157 insurance companies,” Gretchen Melendy said. “No one will take us.”

“Even today I got 7 denials,” Rick Melendy added.

If the couple does not get insurance, they could lose their home.

“Without fire insurance on the loan and mortgage, they could demand payment immediately,” Rick Melendy said. “What is supposed to be the American Dream is not there.”

The state does offer a last resort option: the California Fair Plan. The Melendy’s have applied for it, but they say it’s not an affordable option.

“The cost is 60 percent higher and it’s less coverage for us,” Gretchen Melendy said. “My husband is retired. We are on a fixed income, and we don’t have a lot of options.”

Gretchen says they can’t even sell their home, putting them between a rock and a hard place.

“No one is going to buy my home now if they can’t get insurance,” Gretchen Melendy said. “There goes the property taxes, there goes the property value. There are people moving out of Sonoma County.”

Unfortunately, the Melendy’s are not alone in this. Thousands of Californians are feeling the pain of the homeowner’s insurance crisis. Many companies have announced limiting or stopping new policies all together due to inflation and increased risk of wildfires.

Janet Ruiz with the Insurance Information Institute says the insurance industry is working with the state to bounce back.

“In the last 10 years, for every dollar of premium we took in, we paid out $1.08 so that’s not sustainable,” Ruiz said. “We want to be here. We are working with the CA Dept of Insurance. We are hoping we can get solutions which would mean more insurance for Californians.”

Insurance commissioner Ricardo Lara announced a new strategy to keep private insurance companies in the state as a part of a deal to consider future risks and climate change when setting prices.

Senator Mike McGuire says legislation needs to be passed to protect homeowners.

“We need a pathway for that homeowner to get renewed yet again and back into the traditional insurance policy,” McGuire said.

The Melendy’s are hope speaking up puts pressure on politicians to get something done.

“What I would like is a moratorium to force these private insurance companies to stay in California for affordable rates so we can keep a shelter and home for us,” Gretchen Melendy said.

There are a few pieces of insurance regulation reform being discussed at the capitol, but people like the Melendy’s say if something isn’t done soon, they could lose it all. And they are not along–their neighbors are going through the same struggles.