Problems persist for those searching for fire insurance in Nevada County
Carolyn Williams and her husband have discussed moving to Idaho.
It’s not desirable. They have family here. Williams said she’s lived in her Nevada City home for 28 years.
But the cost of replacing their AAA home insurance has them considering a move.
“I don’t want to move,” Williams said. “I love this house. I love this neighborhood.”
Williams has read the horror stories on Facebook. She’s talked to neighbors. Plenty of people have found themselves without home insurance or with higher premiums.
Williams said she discovered about two months ago she’d lose coverage in September. She’ll still have insurance for her vehicles and her home, but not fire coverage.
If a tree falls on her roof, she’d be insured. But not if there’s a fire, she said.
Last year Williams paid $1,200 for her insurance. It was $1,500 this year. Getting a new fire policy will double, possibly triple that premium, she said.
Suzanne Meraz, with CSAA Insurance Group — an AAA insurer — said in an email that her company periodically evaluates its exposure to significant risk. A recent review led it to some changes for a small percentage of customers in high-risk areas. It will continue to provide homeowner and rental coverage, but only if policyholders buy separate Fair Plan coverage and meet other criteria. It also will non-renew “only a very small percentage of insurance policies with the highest risk.”
Williams appears to fit into the latter.
“The price is going to go up too much,” Williams said.
It’s a problem Ryan Harris, senior broker with Harris Insurance, has seen for several months. He said insurance companies are overexposed in this area, providing coverage for an overabundance of homes in certain zip codes.
The more overexposure that exists, the greater the chance people will lose coverage, Harris said.
“This is probably going to be a two-year process until it gets better,” he said. “We need more markets to accept the risk.
“This is a huge roller coaster ride that we’re on,” he added moments later. “But it will get better.”
Harris attributes the insurance difficulties to last year’s wildfires and the bankruptcy of Merced Property & Casualty Company. Merced had some 8,000 policies in the North State. Its dissolution sent policy holders on a chase to find coverage.
Homeowners can still get insurance. Harris said there’s no property that can’t obtain a quote. However, people should expect higher prices.
LeRoy Whittle, who lives in Alta Sierra, is fortunate. His insurance company said they’d drop him. He then found a new provider with a policy that costs $400 less.
“It turns out we got lucky,” Whittle said.
Insurance companies use a handful of factors when determining if they’ll cover a home, Harris said.
Houses are scored on whether they’re within 1,000 feet of an in-ground fire hydrant and within 5 miles of a manned fire station. They also receive a score based on the brush, density and slope of the property.
A home can have nearby hydrants and fire stations, but still lose coverage because of brush, density and slope, Harris said.
The state Department of Insurance said it can’t tell companies where to provide coverage, but it can ensure non-renewals are done fairly.
Policy holders must receive 45-days’ notice. They can call the department’s consumer hotline at 800-927-4357 to determine whether an insurer met its requirements in the non-renewal and for help in a search for more coverage.
“California has suffered four years of devastating wildfires, including the deadliest and most expensive in our state’s history,” Insurance Commissioner Ricardo Lara said in an email. “We expect that for homeowners in any area that presents a high risk of wildfire loss there will likely be fewer options for coverage.”
Insurance rates are based on risk. Prevention and mitigation can reduce that risk, which would have a positive impact on the availability and affordability of home insurance, the department said.
“There is no doubt that climate change is contributing to more extreme fires and weather,” Lara said. “We can reduce future losses by investing in our lands proactively, (and by) promoting innovation by engaging with insurance companies and local communities to get ahead of climate risk.”
However, the department said it’s unknown how long it will take for premiums to drop because of mitigation efforts.
Susan Walker, president of the Nevada County Association of Realtors, has heard the stories. When clients ask her for help, she provides them a list of insurers. Most people can obtain a policy. A couple of clients have used the Fair Plan, she said.
The California Fair Access to Insurance Requirements Plan was created for those who can’t find insurance on the market. It’s considered a final resort.
“I haven’t, personally, seen any drastic changes as far as the market goes with insurance,” Walker said. “We haven’t had a big problem yet. We’re hoping that’s not going to be the case.”
Walker called the current housing market slow, but attributed it to the weather. She doesn’t see the area’s insurance situation affecting home sales.
Barbara Bashall, executive director of the Nevada County Contractors’ Association, said rising insurance costs haven’t affected building. She’s heard contractors talking about their own homes, but home building itself appears untouched.
“It doesn’t affect our industry,” she said.
To contact Staff Writer Alan Riquelmy, email firstname.lastname@example.org or call 530-477-4239.
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