SKYROCKETING INSURANCE PREMIUMS DAUNT HOMEOWNERS
As wildfire danger increases in California, it’s becoming more difficult – and more expensive – for homeowners to protect themselves against it.
California residents face a growing threat of losing fire insurance due to higher frequency and severity of wildfires, said Chris Mokracek, Mono County’s Director of Emergency Management in a presentation at the Aug. 13 Mono Supervisors meeting.
Only a third of all homes in the US are fully insured, he said.
And that sad number isn’t bound to improve given the increased severity of wildfire risk in California, worsened by the effects of climate change and the cost of rebuilding.
California is ranked #1 for climate disasters, averaging an annual $16.33 billion dollars in damages. Cal Fire reports there have been 5,195 wildland fires year-to-date as of Aug. 15.
Last month, California experienced its hottest July on record, which may have conrtibuted to a spate of fast-spreading wildfires, according to an Aug 1 report by Daniel Swain, climate scientist at the Institute of the Environment and Sustainability.
But despite the increased danger of fire risk, the state government, through regulation, often makes it financially unfeasible for some companies to continue providing coverage because it limits the ability of insurers to raise premiums to match the increased risk, Mokracek said.
All the while, reinsurance, which is insurance for insurance companies, has become more expensive and harder to obtain due to the increased risk.
California rates, though below the national average, are high, with the average yearly cost for $300,000 homes at $1,405, according to the state government website.
*Of course the government makes a comp on a $300,000 home, which as we all know, does not exist.
Last year, California Governor Gavin Newsom signed an executive action to “strengthen and stabilize” California’s insurance marketplace.
According to the language of that executive order, the situation is dire. It referenced wo of the state’s largest insurance carriers, representing over 27 percent of the admitted insurance market in California, had announced they would stop issuing new homeowners and commercial property insurance policies in California.
Over a third of the other market players announced plans to limit new policy origination
The Newsom Administration released a proposal in May to increase the transparency and speed of rate change application approval timelines, and on June 12 California Insurance Commissioner Ricardo Lara drafted a new policy to specifically address distressed areas.
In the meantime, though, it falls on homeowners to take action if they are dropped by their insurers, Mokracek said.
He urges people, if they’re dropped by their insurers, to ask the companies if there are home improvements they can make within 75 days before their coverage expires to prevent being dropped.
Some home improvement solutions are quite inexpensive, such as installing screens to keep embers out or clearing gutters and nearby plants, but other, more important fixes can be costly.
For example, installing A-rated fire rated roofs can prevent fire damage. Materials that comply include asphalt glass fiber composition shingles clay tiles, concrete tiles and slate.
Mokracek said people need to expect to pay more and spend time shopping for home insurance options. In the worst case scenario, The California FAIR Plan (CFP) offers basic fire protection for people who can’t find private coverage.
In certain cases, it’s possible to pair a CFP policy with a “difference in conditions” (DIC) policy to fill gaps in what CFP policies don’t cover.
Also at the Aug 13 Mono County Board of Supervisors meeting, board members through the consent agenda approved a resolution determining Deputy Sheriff Scott Minder industrially disabled and eligible for industrial disability retirement.
This means he will receive $2,304 per month until placed on the retirement roll by CalPERS at which time CalPERS begins paying the industrial disability retirement.
Industrially disabled individuals are people who contracted a job-related illness or injury, according to the CalPERS website.
The board also denied two claims submitted by Frontier on two claims for damages for damaged cables allegedly caused by digging operations.
