Homeowner Insurance in the New Wild Fire Era
After 3 years of devastating wild fires in California, insuring your home is getting more difficult and more costly. Many consumers who own a second home in the mountains are already discovering this as those homes tend to be in more forested areas; areas which are understandably more exposed to a wild fire. But these latest fires have made such an impact on the insurance industry as a whole that those who are not in such an obvious fire-prone area are feeling the effects of a tightening insurance marketplace.
Some insurance carriers have identified areas where they are just too saturated with risk. To put it simply, they’ve done a great job at selling their product. If an insurance company insures every home on the street, they need to cut back on the number of homes they insure in that immediate area. If you’re one of those homes, you might need to replace your coverage at your next renewal date.
Quite a few very desirable suburban cities are prime candidates for a large wild fire loss. Cities like Oakland, Hayward, Danville, San Ramon and Livermore attract home buyers because of their beautiful views and hillsides. Unfortunately those homes with wonderful views often have very little in the way of a fire break to protect them from an advancing fire. Insurance companies are already identifying locations like this and electing to no longer insure in these areas.
It used to be that insurance companies rated based on your zip code, but now in the information age, there is much better information available to assess risk. All insurance companies have some form of brush underwriting software that they use. Instead of assessing fire risk for a region, they can now do this for an individual home on an individual street.
What Can You Do?
Defensible space is the name of the game. Keeping the area surrounding your home lean and green for 100 feet on all sides is the best protection. Trimming tree branches so that they are 10 feet apart and do not overhang your roof is advised too. For some insurance companies doing this can be enough for them to continue to insure your home.
Working with an independent insurance agent who can offer you coverage from several different sources is extremely important. A good independent insurance agent can find you insurance through many different sources, including The California FAIR Plan.
The homeowner insurance market is reacting to the significant fire losses right now. If your home is in an area that is considered to be a high risk of future fire losses you should expect there to be fewer options to insure your home and those options will likely come at a greater cost than before.