The Homeowner Bill of Rights states that the insurer must renew the HO policy at least once following a total loss (Insurance Code Section 675.1).
It also states they cannot cancel the existing policy on a damaged (partial loss) house, but it could mean that the insurer could non-renew the policy of a partial loss. We’ve seen insurers use this loop hole to non-renew a partial loss home.
So, it is clear a total loss must be renewed at least once and partial loss policies cannot be cancelled during the individual policy period. However, insurers may non-renew a partial loss or other homes in the fire area at the end of the policy. Keep in mind that policies can always be cancelled for non-payment, at the homeowner’s request or reasons stated in Insurance Code Section 676.
It is not clear how long the Insurer must renew the total loss policy. While stating the policy must be renewed at least once, the statute states the policy cannot be cancelled while the house is under reconstruction which could take, as we have seen, more than two years following the fire.
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