California Home Owner Insurance Woe's
For more than a few years, California home owners have been experiencing difficulty renewing their insurance policy or obtaining insurance while trying to purchase a home. After the 2017 fires in Sonoma and Napa counties, insurance companies have been increasingly leaving the state - or discontinuing writing policies in California. As well, us realtors would have to time our closings for early in the month as some carriers would only issue a certain amount of policies per month. The domino effect is the California Fair Plan (CFP) acts as a substitute (and a poor one at that) for many home owners choosing to buy a home in a high fire zone. As the years have gone by, 'fire zone' maps (used by insurance carriers to determine what hazard zone a home is located in) are rapidly changing and increasing the boundaries of high fire zones and high severity fire zones.
As if the Pacific Palisades Fire (PPF), CFP's coffers amounted to about $250,000,000. The cost of the PPF is $6.2B. So I bet you're wondering where will the money come from. You guessed it.. in part you will by paying for it. Here's now it works, roughly. CFP actually is self insured up to $2B. So their insurance carrier will kick in. The rest of the insurance carriers in California will kick in about $2B. The rest will be covered between all the home owners in California.
If you have a CFP policy you can expect your insurance to go up about 40%. If you have a 'regular' policy you can expect your insurance to go up about 20%. You can also expect your car insurance to go up too. Mine went up 40 bucks and I'm just a little old lady with a great driving record.
Chew on this..... 1 in 5 home owners in Miami are NOT insured. They own their home and will pay for any future damage as a result of a hazard. Given climate change the probability of regular hurricanes in Miami, will Miami turn into the next Detroit in the next 30 years?
BTW, if your trust owns your home, verify the trust is named on your insurance policy properly. You know the insurance carrier will drop you for any reason!
Talk Soon, Annalise
