Changing Insurance Threatens Homeownership


The American Dream of owning a home is becoming more difficult, especially in California. Coupled with affordability woes, rising insurance costs are already becoming a headache to homeowners and would-be buyers alike. Buyers are becoming more hesitant to move to wildfire prone areas and with good reason. The 2018 wildfire season was the most devastating ever recorded with over 8,500 fires burning almost 2 million acres of land. As government tries to improve forest management, the effects are real – homeowners are being declined for coverage, some insurers are leaving the state and rates are increasing substantially. Collectively, the largest insurance companies in the state have declined to renew nearly 350,000 policies in high risk areas over the last few years. Just what options are left for those homeowners who are declined by their insurance company? There is a last resort, known as the California FAIR Plan which has coverage limits of up to $1.5 million, but that does not include liability and theft coverage, leaving a homeowner to search for a wraparound policy which fills standard coverage. FAIR Plan policies can be really expensive and that additional cost is being considered when buyers make offers on homes. [For example, the buyers of an acreage property we sold in early 2019 on Tassajara Creek Road had only 1 option for insurance – CA Fair Plan. The cost – $7,500 annually, which will probably only increase.] 

How to Fire-Harden Your Home

  • If your roof is wood shingle, consider re-roofing with materials that are fire resistant. Your roof is the most vulnerable part of your home and some insurance companies will decline new coverage if the roof is wood shingle. 
  • Cover any vents, including your chimney, with 1/8” mesh to keep falling embers out AND to keep embers from your fireplace from escaping and igniting a fire.
  • If the exterior of your house is wood (T1-11, clapboard, board-and-batten, etc), consider remodeling to a more fire resistant material like stucco or cement board. 
  • Install rain gutter guards on top of your gutters to prevent leaves from accumulating and providing a source of fuel for a fire. 
  • Ensure any trees or plants within ~20 feet of your home are smaller, well-pruned plants. 
  • Annually, cut any dead limbs and thin trees within a close proximity to your home.  
  • Make sure your home’s address is clearly visible from the street, so first responders can find your home more easily. 
  • Purchase at least 1 fire extinguisher for your home. 
  • Make sure any deck or porch that abuts your home is kept free of combustible materials (including under the deck) and ideally use fire resistant building materials for your deck.
  • Consider having multiple garden hoses that are long enough to reach all areas of your home and any other structures on your property. 

If you have further questions about how your insurance may be affected, let us connect you with one of our trusted business partners that deal with insurance every day. Until then, take precautions and be prepared. 

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