Homeowners insurance has become more significant, more expensive, and harder to get for homes in California over the last few years. And it is being brought further into our collective minds following the most recent devastation in Pacific Palisades. The problem for home owners and home buyers are three fold: 1) Carriers dropping policies. 2) Rates increasing multiple times above previous rates. And 3) Some properties are uninsurable except for the meager California Fair Plan.
Based on our recent conversation with Ray Badock of RC Fisher, it is unclear how much the recent fires are going to affect the rest of the state, we just know that they will. The state insurance commissioner needs to continue to work with insurers to regulate increases in ways that hold the market together, but that is a little out of my knowledge set to comment much more.
Let's talk about things we do know for home owners and the things you can control. First, follow all the best practices for home maintenance for your situation. This can include controlling, cleaning, and maintaining foliage around your home. Cut back, cut down, replace with plants that are less flammable. You can also update your home with more fire resistant materials and make sure it is in good repair. If you have a pool, consider safety features that utilize your pool water automatically when needed.
Second, be proactive with your insurance agent/broker. Make sure you understand what your policy covers and if there is any indication of the insurer lowering their foot print in California. And ask what sorts of things they are seeing required, like roof and foliage maintenance. Also, if your home is in a trust be sure to add the trust as a secondary insurer. Check with your insurance broker for more details.
Third, when exploring buying a home, it is important to review its fire rating, a required disclosure. We have our buying clients research home owner insurance policies BEFORE writing an offer to see if traditional policies are available. It is important to know that when deciding IF to write an offer and for how much.
Give us a call if you have questions about buying or selling a home, or need resources for re-insuring your current home.
