California Homeowners Struggle to Find Fire Insurance

In the aftermath of the most destructive fires California has ever seen, homeowners are facing a big problem. The California Department of Insurance has received increased complaints, evidence, and feedback from consumers that homeowners’ insurance coverage in high-risk areas is increasingly difficult to obtain and unaffordable for those that need it.

1 in 3 CA Homes in High-Risk Areas

There are an estimated 3.6 million Californian homes in the wildland-urban interface (WUI), of which 1 million are in a high or very high risk-of-fire area, according to the report, Availability and Affordability of Coverage for Wildfire Loss in Residential Property Insurance in the Wildland-urban Interface and Other High-Risk Areas of California.

What is the wildland-land urban interface? The WUI consists of communities in areas where housing and wildland vegetation intermingle (known as the intermix WUI) or areas where housing is in the vicinity of a large area of dense wildland vegetation (known as the interface WUI).

In California, 32.6% of all homes can be classified as either in the WUI intermix or interface. That means one in three homes is at risk for wildfire.
 

CA Homeowners Facing Sky-high Insurance Premiums

Homeowners’ complaints about both renewal issues and premium increases have risen significantly over the past six years. The majority of complaints filed with the California Department of Insurance (CDI) come from zip codes designated by CALFIRE as having the greatest risk of wildfire.

• 249% increase in renewal complaints from high-risk zip codes
• 217% increase in premium increase complaints from high-risk zip codes

Although the population of these areas is only 38% of the overall state population, complaints from these high-risk areas made up more than 60% of all official complaints about rising premium amounts or an inability to renew existing homeowners’ policies.

How big is this problem for homeowners?

The CDI has seen cases where homeowners who were paying an annual premium of $800 - $1,000 for insurance saw a renewal increase to as high as $2,500 - $5,000 for the same coverage.

And many insurers are deciding not to issue renewals for homeowners’ insurance at all.

What is the CDI Doing About Homeowners’ Insurance Concerns?

The California Department of Insurance extensively reviewed consumer complaints and found that several major insurers have been pulling back from writing new business and renewals in certain parts of the WUI.

The CDI also reported that homeowners’ insurance premiums and fire surcharges have significantly increased in these high-risk areas.

The CDI is doing its best to take actions to address the availability and affordability of homeowners’ insurance in high-risk areas of California. The department is reaching out to insurance providers, brokers, agents, and public officials about improvements made to the FAIR Plan. The CDI is also suggesting legislative measures needed to achieve long-term success in addressing these problems.

How Can Homeowners Find Affordable Insurance in High-Risk Areas?

While the CDI has suggested legislation that would provide premium credits for homeowners who meet specific criteria - such as obtaining a certificate for conducting defensible-space efforts- there’s no guarantee that new laws will be put into place at all.

So what can homeowners do if they’re struggling to find, keep, or afford coverage?
 

Insurance Brokers Who Specialize in High-Risk Homes

Some insurance brokers have a long history of operating in high-risk areas and have established a relationship with insurance providers with a comfortable appetite for homes in the WUI.

Aegis Insurance Markets, an independent insurance broker operating out of Truckee, California, has been insuring homes in the WUI for almost 20 years. Truckee is one of CALFIRE’s high-risk cities, designated as a very high fire hazard severity zone.

Aegis has seen first hand the devastation that wildfires can bring to high-risk areas.

On June 24, 2007, an illegal campfire spread into the forest just outside South Lake Tahoe, just 44 miles outside Truckee. The resulting Angora Fire became Lake Tahoe’s largest wildfire, destroying 254 homes and structures, burning down entire neighborhoods, and destroying 3,100 acres of forest landscape.

In the aftermath of the Angora Fire, many homeowners rebuilt, triumphantly returning to homes that were more resilient and defensible against future fires. But not everyone was that lucky. Others were underinsured, uninsured, or between insurers when the devastating blaze took place.

Aegis knows how crucially important it is that families and homes in high-risk areas be properly insured, and refuses to leave people unprotected.

Since 1999, Aegis has been creating relationships with numerous companies and multiple carriers. Aegis can find affordable insurance for homeowners’ in high-risk areas, for every type of property. Whether it’s a primary residence, second home, rental, condo, or even a vacation rental or AirBnB, Aegis has a long history of covering high-risk homes.

Homeowners who are struggling to find, keep, or afford insurance coverage in a high-risk area shouldn’t put their homes at risk. And they don’t need to choose between no-coverage and unaffordable coverage. Instead, California homeowners should turn to independent brokers who have experience covering homes in fire-prone areas.

While the CDI fights for legislative measures that can fix the problems found in today’s homeowners’ insurance markets, independent brokers like Aegis Insurance Markets are finding immediate solutions for homeowners who need affordable coverage now.