Fire Insurance Availability... California

[ultrarunner]

Looking at buying a home about a mile outside the city limit... it is well water with 10,000 gallon fire sprinkler water tank, fire sprinklers in home and shop, metal roof on shop, fired tile roof on house and a concrete pond for additional water.

Structures are within 100 feet of highway... and property is not forested.

The Insurance Agents/Brokers I deal with both said no go...

Nearest city water fire hydrant is 3/4 of a mile away.

Learned it is just not county... but large sections of nearby cities with high end homes are also not being able find carriers...

I have track records with both agents.... Farmers and State Farm, zero claim history and go back 30 years.

The consensus is the drought and the worst fire season on record leave the only option the State Fund which is the insurance of last resort on only offers minimal structure coverage.

Just wonder if others have run into this?

On a personal note... it has become very difficult to take out trees and even disc in some areas due to sensitive habitat...

Last year someone was fined for creating a fire break on his property in a snake sensitive habitat.

 

[RedNeckGeek]

Try Liberty Mutual. Also ask an independent agent to shop around for you. Just make sure you verify the solvency of the no name options he comes up with.

 

[ultrarunner]

Try Liberty Mutual. Also ask an independent agent to shop around for you. Just make sure you verify the solvency of the no name options he comes up with.

Funny you should mention Liberty Mutual...

Had several friends with them and a local Agent trying to get me to switch...

So, when I bought my next home I said sign me up... silence... then I found out they had completely suspended writing in California... don't know for how long but they were not the only one... Fireman's had simply pulled out of my market and it is a local company or it was until the Alliance Deal...

Hope to never need it even though it is a significant expense...

Decided to pass on the home for now... price, size and issues for insurance and new underwriting plus my new California Property Tax bill would be over 20k for a home and shop on 1.3 acres...

My 10k Property Tax for my acre plus home is already a lot... can't imagine doubling that...

Maybe I will revisit during the next market downturn...

As a sidebar... I have been keeping a close eye on area Real Estate... more inventory added every day and about half was bought in the last 3 to 5 years and now is priced 50 to 100% higher... don't see how this is sustainable...

 

[RobertBrown]

just pay cash

 

[ultrarunner]

For the Insurance or Property?

Is a Homeowner policy available without fire???

My agent is Farmers and they use a rating system and even being a few years old and being fully sprinklered with 10,000 gallon water storage for fire sprinklers and a dedicated standpipe and well pump for fire... he said there was nothing he could do for me in Castro Valley CA unless the county puts in a Fire Hydrant in front...

Imagine it will only become harder to get and cost more when you do.

 

[RedNeckGeek]

A few years ago ISO, a standards organization, changed the way it rated both fire houses and residences with regard to Fire Protection Class. The new system takes into account not only how far the home is from the nearest responder, but how much time it would take to make the trip. It also distinguishes between volunteer and pro staffed fire houses, and whether or not they are staffed 24x7x365. The bottom line is that if you're less than 15 minutes or 7.5 miles away from a 24x7x365 professionally staffed fire house, you'll be placed in Class 9, and that's the highest class many insurance companies will write a policy for. I think if you have fire hydrants close by, that drops you to Class 8 and your insurance will be discounted slightly. It doesn't matter if you've made fire clearance around the home, provided a hundred thousand gallons of water storage, put in sprinklers, or any of that. Somewhere out there is a table that all the insurance companies use, and if you're outside the 15 minutes or 7.5 miles away from a 24x7x365, you're not going to get a policy from anyone but the State.

Every time there's a big wildfire up here, the local TV stations go around shooting pictures of all the burned houses. Once in a while they'll also show one or two that didn't burn, and it's always because the owners provided adequate clearance around the house. Some of the images are startling: Nothing but ash and cinders all around except for certain houses, which sit undamaged inside their little islands. Yet the insurance companies can't be bothered to take this preparation into account, most likely because it would cost them money to send someone out to inspect the place, and it's easier to upcharge everyone, even those that try to mitigate the hazard.

It wasn't clear if your friends that use Liberty Mutual had been denied renewal, or if LM is just not writing any new policies.

 

[ultrarunner]

At that time LM had suspended the writing of new policies... some insurers simple left the State and my Fireman's fund said they no longer insured "Low Value" homes... I had 1200 square feet on a city lot with fire station and fire hydrant a block away... insured at 275k and new minimum was 500k... it was clear they no longer wanted to insure modest homes in Oakland and surrounding areas.

The home I looked at had a neighbor that recently sold and the buyer bought a policy from Loyd's of London for $5500... the previous owner was paying $1800

I'm sure we will all feel the impact of the California fires... at least those of us in California!

 

[downsizingnow48]

Ditto what redneckgeek said. We had the same experience in Mendocino county. My insurance company (USAA) for the last 28 years cancelled our homeowner policy when those new rules were set up.

 

[ultrarunner]

Since I first posted I found two people at work have the same problem... both 20+ years and live just over the city line in the county on a couple of acres with a horse or two... real nice places and clean as a whistle...

 

[randy41]

just pay cash

if you don't have a mortgage there's no requirement for insurance

 

[ultrarunner]

True... but, I don't know if you can get homeowner's coverage without Fire Insurance.

I do think today having basic liability, worker's comp and theft plus storm damage is worthwhile...

 

[ultrarunner]

OK... just got off the phone with my Agent of 30+ years...

He said the last few weeks he has been writing a lot of blended coverage plans... even in the city limits because new underwriting is denying Fire coverage to many...

The most popular coverage is the State of California Fire Plan which is minimum coverage that meets lender's requirements coupled to a Farmer's Home Owner policy with fire EXCLUDED...

He thinks this is the way fire insurance is headed in California and expects to see a lot more of these blended policies... the first one he has ever written was just a few weeks ago.

Interesting because the California Fair Plan came about as minimum insurance of last resort for run down inner city areas and now it looks like it will be the only rural and semi rural coverage available for many going forward...

One catch is you may have to have applied for and been denied by at least 3 carriers...

Eligible Areas

Just like Earth Quake is almost all exclusively the State now...

State of California Auto Insurance is also growing by leaps and bounds...

Maybe one day the government will by the major or only player for Health, Auto and Home

 

[ultrarunner]

Update...

Some of my neighbors who have lived in their homes since the 1960's are getting non-renewals... they have zero claim history.

Replacement policies are much higher... like going from $1500 annually to $5000 on a 1700 square foot ranch home... the reason cited it California Fire Danger and this is city living with sidewalks and fire hydrants...

All are on Social Security and one has said he may just go without.... home has been paid for years ago and he is 90...

Seems to be always something popping up...

 

[EddieWalker]

Wonder how much their health insurance is going to go up there? Add that to home owners insurance and it's going to be very hard for a lot of people to survive

 

[ultrarunner]

I think Health Insurance escalation will hit everyone pretty hard... many of the co-ops have gone under around the country... some have said it will eventually end up with government single payer...

The Home insurance does seem to be very much a California thing... kind of ironic in that I need a permit to take out a single oak tree or any other tree like I did for a single walnut in the backyard and it took several weeks with neighborhood posting before the permit was granted.

Yet the insurance companies are focusing in on areas with foliage/trees... urban/wildland interface is what they call it.

Of course there is always the California Fair Plan that is through the State of California as the insurance of last resort that meets minimum requirements for lending.

Lots of people I know are doing OK with no debt and Social Security... that said it would take much of an increase to make things unaffordable.

On a separate note... there has been a lot of moving to Texas talk around the watercooler... and I just can't help share your story Eddie... only the names have been changed!