Anyone else out there having trouble getting homeowner s insurance in CA

[Martin]

I'm completely pissed off - I've been getting cancelled by insurance companies annually for the past few years, and every time I get a new policy placed, the premiums are at least 50% higher than before, and I need to go through inspections, etc. It's a massive pain - but at least I was able to get coverage.

I live in a 9-10 fire risk zone (up in the hills) and just had a new policy written in July. The other day, I get a letter from the insurance company saying that they are no longer insuring any homes in CA that are in the 9 or 10 risk zones, so they did a mid-term cancel on me and now I have 30 days to get a new policy.

I've called everyone that I can think of, and enlisted the help of an agent who gets policies for other homes up in the hills, and she said that pretty much everyone is SOL now. Most insurance companies are pulling out of CA, and getting a policy written is now super expensive, requires a very thorough inspection, they may require you to clear-cut trees and brush hundreds of feet from your home. For people like me who have a portion of my house that is about 80 feet from a neighbor's property line, and their place is heavily wooded, I'm an immediate no-go on the "defensible space" requirement. The neighbor doesn't want to cut his trees down (I don't really blame him) but it makes my place virtually uninsurable in today's insurance market.

Anyone out there know of a "trick" to getting insured in high-risk areas? I'm now down to the "last resort" insurance - the California FAIR Plan. It's crap insurance and it's super expensive. Also, I have to wrap another policy around that to cover everything except wildfire damage - which is also super expensive. It's ridiculous...

[cashcorn]

Martin have you tried Ameriprise through Costco. I live at the beach and my foundation backs right to the edge of my slope. My only backyard is an 800 sq/ft deck. Other companies would come out and inspect or use google maps and cancel the application. Ameriprise/Costco has been great for 2 years so far. They also have great car insurance policies. Good Luck! Greg

[LifeIsGood]

Maybe you should rethink living in a 9-10 fire risk zone. It sounds like a lot of professionals don't think your house will be there very long.

[Martin]

Maybe you should rethink living in a 9-10 fire risk zone. It sounds like a lot of professionals don't think your house will be there very long.

Living up in the hills is nice - I wouldn't have it any other way. What's ironic about the current situation in CA is that most insurance companies are cancelling policies because of last year's fires. Those fires wiped out entire neighborhoods, and the insurance companies took massive losses. What's ironic is that the fires spread from house to house in areas that are not wooded at all (very low risk zones) - most of the losses were from houses being too close together. There were very few losses in the hills. The rating system is flawed in my opinion.

Greg - thanks, I will check out Ameriprise. I've heard good things about them.

[Martin]

There have been dozens of articles in the local publications talking about how people are either getting non-renewed, or having an inspector show up mid-term and send a report saying the homeowner either needs to clear cut all the trees on their property within two weeks or lose their insurance. It's rather crazy - most "old growth" or "legacy" trees are protected - you have to go through months of hassle just trying to get a permit to take them down. That, and these are nice trees - not junk trees.

In my situation, they want me to clear cut an area that is a steep slope above my property. We've all heard of the landslides that have happened after trees are gone... And, guess what, the insurance won't cover land movement. So, they want people to remove trees, but they won't cover a landslide that could happen when it rains hard. It's just plain stupid.

Had a long talk with a very good insurance agent. She told me she's going through hell right now because 90% of her business are nicer homes up in the hills. Insurance companies are refusing to insure them, so people are in a panic. On top of that, many insurance companies have sent her notices that they're just going to pull out of the CA market altogether.

I'd get out of CA if I could. Too many roots here, and family and work obligations. That said, this is the first time in my life that I feel like getting out of this state is desirable.

[Bryan Savage]

There have been dozens of articles in the local publications talking about how people are either getting non-renewed, or having an inspector show up mid-term and send a report saying the homeowner either needs to clear cut all the trees on their property within two weeks or lose their insurance. It's rather crazy - most "old growth" or "legacy" trees are protected - you have to go through months of hassle just trying to get a permit to take them down. That, and these are nice trees - not junk trees.

In my situation, they want me to clear cut an area that is a steep slope above my property. We've all heard of the landslides that have happened after trees are gone... And, guess what, the insurance won't cover land movement. So, they want people to remove trees, but they won't cover a landslide that could happen when it rains hard. It's just plain stupid.

Had a long talk with a very good insurance agent. She told me she's going through hell right now because 90% of her business are nicer homes up in the hills. Insurance companies are refusing to insure them, so people are in a panic. On top of that, many insurance companies have sent her notices that they're just going to pull out of the CA market altogether.

I'd get out of CA if I could. Too many roots here, and family and work obligations. That said, this is the first time in my life that I feel like getting out of this state is desirable.

Traffic might stink, but what about moving to someplace right over the border in Nevada? California isn't all that wide, so if you could relocate the work obligations, family wouldn't be too far out of reach.... unless you have daily interactions with them...

[Martin]

An update - I think I got it all sorted out, but it was a complex process. I ended up having two options - allowing my mortgage holder to do a lender placed policy (for about 5x what a usual policy would cost, and only covered their interests - no liability, no theft, etc.), or cobble together a bunch of policies from different providers to equal what a normal homeowner's policy would cover. I found an awesome agent who specializes in homes up in the hills, and she sorted out what none of the other agents could sort out. If anyone else falls into this situation, where you get non-renewed because you're in a "high risk" area, PM me and I'll get you her contact info. She only does business in CA, but she can do business anywhere in CA. Super responsive, super responsible, and very detail oriented. She saved my butt.

By the way, be aware that "high wildfire risk" is now defined as a wildfire risk of 3 and above. It used to be 9 or 10, then a couple of years ago it switched to 6 through 10, and as of this summer, it's 3 through 10. That hits just about everyone in CA unless you are living under water. Insurance companies are regularly sending out inspectors to see if you have trees within 12 feet of your roofline, whether you have cleaned your gutters, whether you have your roof cleaned, and whether it looks like you have shake roofing that hasn't been fire-resistant treated withing the past two years. On top of that, I'm hearing of people getting cancelled because they have small steps on their property that don't have railing - the inspector will come out, take a picture, and give the homeowner 30 days to install railing or be non-renewed. We're not talking about ten, or even five foot high stairs here - this is two or three steps of wide and safe stairways. Same goes for cracks in your driveway due to roots, etc. If they think it's a tripping hazard, you get a letter in the mail (often received 15 days after they tell you that you have 30 days to fix it - essentially giving you 15 days to fix things).

The insurance marketplace is a mess these days. I have neighbors who have never had a claim in 30 years who are getting cancelled because of these things.

[cashcorn]

Martin, Glad you have it all sorted out! It seems like every year is a new challenge. I might have to move to Texas one of these days.. I will stick it out though, as you can't bet 72 degree average temps at the beach year round. lol. Perfect Viper driving weather!

[Martin]

Martin, Glad you have it all sorted out! It seems like every year is a new challenge. I might have to move to Texas one of these days.. I will stick it out though, as you can't bet 72 degree average temps at the beach year round. lol. Perfect Viper driving weather!

I think about moving sometimes, but this is home. I've thought about Idaho or Texas, but they're catching the California Fever already - I figure if I move there, I'll be right back to where I started. When it all comes down to it, I like it here, and the job opportunities just can't be beat. If I didn't own a property that I really like, and I was shut out of the market like the majority of the people who live around here, I'd get out.

Insurance is going to be tougher for everyone pretty soon. 2017 was a year with the biggest insurance losses across the country yet. In CA it's wildfires and earthquakes, in some states it's hurricanes, in some it's tornadoes, in some it's hail, etc. Insurance companies are going to have a tough time staying in business and it's going to be felt everywhere.

[Coloviper]

Martin, there is always Colorado! Seems like the mass of people moving here are from either CA or TX. Not that we really want more people moving here, but you can't stop it either. At least the State is pumping money into the infrastructure, we'll as fast as they responsibly can anyway.

[Martin]

Martin, there is always Colorado! Seems like the mass of people moving here are from either CA or TX. Not that we really want more people moving here, but you can't stop it either. At least the State is pumping money into the infrastructure, we'll as fast as they responsibly can anyway.

I thought about it a few years ago - my company decided to move headquarters away from Silicon Valley because of the crazy cost of talent. So, we chose the Denver area and it was a good move. A lot of people bought places up in Boulder when they relocated and they work remotely most of the time, and go into the office when needed.

The reality for me is that I've got so much blood sweat and tears investment in the property I own that I just can't let it go. It's one of those very unique places where people visit and say "holy shit, I had no idea something like this existed around here." It really is special - a stream with wild trout (big ones - some are in the 30" range in the deeper holes), about 35 acres of land, a couple of rental houses on the property that I know I'll need during retirement, and, of course, the Prop 13 benefit. I bought it waaaay under market value about 20 years ago, so my prop taxes are quite reasonable. Selling might be a great financial move someday, but for now, I just love living here and in a twisted way I love the challenges that owning a place like this presents.

All that said, if a wildfire blows through here, we'll be screwed. But, then again, if I have a heart attack tomorrow, I'll be screwed.... If cancer comes back, I'll be screwed...

[Bill Pemberton]

Sounds like a situation the Ca. Insurance should get involved in. Similar things happened in Florida , years back, and the State fought and won against Companies that just wanted to pull out or pick and choose.

[Martin]

Sounds like a situation the Ca. Insurance should get involved in. Similar things happened in Florida , years back, and the State fought and won against Companies that just wanted to pull out or pick and choose.

It's a weird situation here. There are "admitted" and "non-admitted" companies that sell insurance. Most of the "admitted" companies have to abide by a LOT of CA Dept. of Insurance oversight, but they have very strict requirements on what policies they'll write. But, the "non-admitted" companies are pretty much self-regulating and they're much more flexible about the policies they'll write. In my example, I complied with everything an "admitted" company would need to accept (complied with all the CAL FIRE defensible space requirements), but a "non-admitted" company can make its own rules. They can write a policy and then 59 days later change their underwriting standards to something ridiculous (like 1000 feet of clear space between a structure and any trees or brush) and cancel you with no fear of repercussion. When I got cancelled on the 59th day when they changed their "risk appetite" (they do have to abide by a 60-day rule - if they let you keep your policy for 61 days, they have to wait until renewal time to non-renew you) I complained to the State. They opened an investigation, told the company that they were acting wrongfully for cancelling me without even sending an inspector out who was "wildfire risk qualified" and the insurance company's lawyers basically wrote back saying that they are non-admitted, they don't need to follow the rules of an admitted company, they weren't forcing me to take out a policy with them, and they weren't forcing me to do anything. But, if I didn't do what they wanted (which was impossible), they had the right to cancel me. The State contacted me and said, next time, go with an "admitted" company and we can help you - but in this case, you're screwed.

So, I cobbled together a bunch of policies from admitted companies, and I'm keeping my fingers crossed that I can keep this mish-mash of policies in place for many years. It's really not a fun experience having to beg for insurance.

Eventually, so few companies will be doing business in CA that the ones who are doing business will see the huge profit potential and things will loosen up a bit. Until then, though, it's only going to get worse.