Experts educate realtors on fire risk and the real estate market in Nevada County
An active fire season throughout the state and years of prolonged drought have given insurance companies cold feet about doing business in California.
Homeowners in many of the state’s fire-prone areas, including Nevada County, are finding that insurance companies are declining to renew existing policies and are forgoing writing new ones due to fire risk.
But the situation isn’t just causing headaches for homeowners; it’s also a hot topic for the county’s real estate agents, who are often faced with the challenge of helping those relocating to or within the county find affordable policies that will protect their homes in the event of a blaze.
On Friday, the Nevada County Association of Realtors hosted a discussion panel aimed at giving realtors the information they need to understand how fire risk affects the availability of home insurance in the county and to help homeowners overcome potential hurdles to secure insurance.
Joanne Drummond, the executive director of the Fire Safe Council of Nevada County, joined local insurance agents Mike Bratton, of State Farm Insurance, Wanda Mertens, of Farmers Insurance, and Mark Ridens, of Ridens Insurance Agency, to address a crowd of about two dozen realtors at the Nevada County Association of Realtors office on Crown Point Circle in Grass Valley.
The prevailing message: realtors should treat the current home insurance climate as the new normal.
“This is the worst situation that I’ve ever seen in the 31 years I’ve been doing this,” said Bratton. “And I don’t think it’s going to change anytime soon.”
It’s not just the blazes that burned over the summer that are upping the fire risk, Mertens told the group. It’s that more sophisticated technology is being used to determine which particular houses or blocks of a neighborhood are especially susceptible to fire, based on access, water source, wind patterns, type of roof on a structure and more.
“Not only is the fire service far more educated and has information they can access, but the insurance industry does too,” Mertens said.
Insurance companies who are canceling policies or refusing to write new policies are in part trying to manage their existing risk in Nevada County, Bratton said.
He said a company’s priority is taking care of its existing clients; if a company already has significant business in a high-risk fire area, the company becomes more reluctant to take on new policies in that area.
“We don’t want to put too much risk in the fold that could damage future rates” for existing policy holders, Bratton said.
All of the contributing factors amount to a “frustrating” situation for those seeking a home insurance policy, Ridens said.
“Their opportunity to look for an insurance company that fits their needs, that offers the services that they want at a price they can afford is drastically reduced right now,” Ridens said.
Still, realtors working with buyers in the county can help them pursue their options, the experts said. Bratton advised realtors that their clients have a higher chance of finding insurance for a new property with the company that insured their previous home.
“You’ve built up rapport with that company, you’ve got a relationship with that company,” Bratton said.
And realtors may have to encourage their clients to look behind the big-name insurance companies they’re used to, and shop for policies with other companies instead — and to be persistent.
“There’s coverage out there but seven or six out of 10 are going to say no,” Bratton said.
Drummond said there are things realtors can encourage home buyers to be aware of when purchasing a property that will help their chances at securing an insurance policy, including whether there is 100 feet of defensible space around the home.
The type and arrangement of vegetation on their property, the clearance of access roads and the type of roof on the home all need to be viewed with fire risk in mind, Drummond said.
“It is the number one natural hazard that we live with living in the Sierra Nevada,” Drummond said.
And the risk isn’t going away, Bratton said.
“It’s just what we live with,” he said. “We need to be proactive and do the best job we can of cleaning our properties up and working with the Fire Safe Council and understanding fees are going to be higher,” he said.
That’s why it’s “paramount” for the county’s realtors to have a handle on the county’s fire risk and insurance market, said Greg Bulanti, who serves as the Nevada County Association of Realtors education chair and is the organization’s current president-elect.
“It’s important for realtors to stay abreast of topics that affect home ownership in Nevada County,” Bulanti said.
Bulanti said fire risk has long been on realtors’ minds, but was brought to the forefront by the Lowell Fire, which burned more than 2,000 acres in Nevada County during July and August.
He said the association will make it a priority to continue facilitating conversations about the way fire risk is affecting the county’s real estate market, and ensure the area’s realtors have the tools and knowledge they need to best serve their clients.
“The world has changed because of fire danger in California,” Bulanti said. “I don’t see that genie being put back in the bottle.”
To contact Staff Writer Emily Lavin, email firstname.lastname@example.org or call 530-477-4230.
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