New Mexico insurers declined to renew a record number of homeowners policies last year, and the state's own regulator says mitigation has reversed some of those decisions. Here is how to get ahead of the letter for your own book.
On October 20, a New Mexico state representative whose district sits inside the burn scar of the largest wildfire in state history asked a panel of insurance industry leaders a direct question. If carriers leave these communities entirely, how do they rebuild? The hearing, reported by Source New Mexico, came three months after the state's Office of the Superintendent of Insurance told lawmakers that national insurers declined to renew more than 6,200 homeowners policies in 2025. That is the highest annual count in the state's history and nearly triple the roughly 2,200 non-renewals recorded in 2021.
The industry answer at the hearing was candid. Julie Rochman, a former CEO of an industry research organization who now chairs the state's FAIR Plan board, said carriers pull back when they already hold as much risk in a state as they can support while still paying every claim. She also said the single most important thing a homeowner can do for the market and for their own house is sweat equity on mitigation, starting with a five foot buffer of non-flammable material around the structure.
You do not need to be in New Mexico for this to matter. If your book includes homes in wildfire country, in a hail belt, on a coast, or in a county a carrier has quietly flagged, the same pattern is coming to you. The non-renewal letter is the last step in a process that starts a year or more earlier inside the carrier. The question is whether you are working that process before the letter or only after it.
What the Regulator Said About Mitigation
The detail from the July hearing that should stick with you is this. Insurance Superintendent Alice Kane told lawmakers that in a number of cases where a non-renewal was coming, the homeowner completed mitigation and the non-renewal was canceled. In her words, they were able to keep their insurance. That is a regulator describing a mechanism, not a hope. A pending non-renewal on a specific property was reversed because the risk on that property changed.
The state is backing this with money. In 2025 the Legislature gave the superintendent's office ten million dollars to help FAIR Plan policyholders mitigate against wildfire, including clearing trees from near structures, installing vent screens, and making roofs more flame resistant. Kane said the grant program is still early, but she expects carriers to notice statewide mitigation efforts and keep writing homes they would otherwise drop.
So the sequence the state is describing is the one you can run on your own accounts. Identify the exposure. Fix the parts of it that are fixable. Document the fix. Present it to the carrier before the carrier decides.
Why You Hear About It Last
Carriers do not announce that they are tightening in a territory. They change underwriting rules, add inspection requirements, lower the roof age they will accept, or stop writing new business in a zip code. You see the effect one account at a time, usually as a non-renewal notice arriving with sixty or ninety days on the clock. By then the carrier has already decided, and your options are a remarket under time pressure or the FAIR Plan.
The earlier signals are visible if you look for them. A carrier that starts ordering exterior inspections on renewals it never inspected before. A carrier that declines a new quote on a street where it already insures six houses. A carrier whose renewal comes back with a new wildfire or wind score on the declarations page. Each of these is the carrier telling you where its appetite is heading, and each one is a reason to pull the rest of your accounts with that carrier in that area and look at them before the next renewal cycle.
The homeowner also does not know any of this is happening. They have paid on time for years and assume the policy renews because it always has. When the letter comes, they experience it as a betrayal, and the first person they call is you. Being able to say you saw this coming and here is what we already did is a different conversation than being able to say you are sorry and you will start shopping.
What Mitigation Looks Like on a File
Carriers respond to documentation, not to assurances. A client telling you they cleared brush does not change an underwriting decision. Photographs with dates, a receipt from a tree service, a roofing invoice with the product name, and a short written summary of what was done and when can. For wildfire, the measures the New Mexico program funds are the same ones most carriers and the industry research organizations point to: defensible space immediately around the structure, ember resistant vents, and a Class A roof.
Build a one page mitigation summary template and fill it in for any account you think is exposed. Address, construction, roof year and material, distance to the nearest brush or slope, what has been done, what is planned, with photos attached. Send it to the underwriter with the renewal, not after the non-renewal. If the carrier still declines, the same document goes to every market you remarket to and to the FAIR Plan application. The work is not wasted either way.
Where a state or county mitigation grant exists, tell your clients about it. The New Mexico program is limited to FAIR Plan policyholders, but other states and many local fire districts run assessment or cost share programs. A client who qualifies for help with the cost is far more likely to do the work, and a client who does the work is far more likely to stay insured and stay yours.
What to Do This Week
Pull your homeowners book by carrier and by territory. Flag any county or zip code where you have seen a non-renewal, a declined new business quote, or a new inspection requirement from that carrier in the past twelve months. That list is your watch list.
For every account on the watch list with a renewal in the next six months, call the client now. Explain that carriers are tightening in the area, ask what mitigation has been done, and offer to help them document it. Set a deadline that lands at least sixty days before the renewal so there is time to get it in front of the underwriter.
Then check what your state's insurance department and FAIR Plan are saying publicly. New Mexico's superintendent is collecting data from the ten largest carriers to find out what is driving non-renewals and has said publicly that mitigation reverses some of them. If your state regulator is saying something similar, quote it to your clients. It is far more persuasive coming from the regulator than from the agent trying to sell the work.
The lawmaker's question at the hearing was about rebuilding after an exodus. Your version of the question is smaller and more immediate. Which accounts in your book are a letter away from the FAIR Plan, and what can be done on those properties before the letter is written? Answer that now and the letter stops being the start of the conversation.