WHAT TO KNOW ABOUT WILDFIRE INSURANCE
Current statistics compiled from CalFire and the U.S. orest Ser ice, as shown on www. re.ca.go , indicate that from 2017 to 2020, California experienced more than , wild res which collecti ely burned more than . million acres. The 2018 Camp Fire in Paradise alone destroyed nearly 19,000 structures, of which around 14,000 were homes, and resulted in deaths. While many o these fires are thought to be human caused, PG&E has accepted some of the responsibility for failure of their power lines to hold up in windy conditions. It is also thought that lightning strikes in high rush areas are another cause o the fires. Regardless o the source, fire is a standard eril insured against in virtually all property or homeowner’s policies. As such, insurance companies have paid out billions of dollars in claim ayments resulting rom fire damage to dwellings, outbuildings, furnishings, and loss of use of property. Resources suggest that Truckee, CA, ranks #7 of the top 10 locations in the U.S. for extreme brush hazards combined with extremely high replacement costs. Now, how does a homeowner deal with the insurance issues associated with insurance companies withdrawing from the market, or rates that are three to fi e times higher than previously charged? Answer #1–Find an agency or broker with access to multiple insurance companies. Brokers have access to multiple specialty companies through which they may place your coverage. Although the price may be higher, the coverage is essential to retain equity in your property, which is at risk without insurance. If you have a mortgage, your lender will require property insurance.
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Answer #2–I necessary, use the CA Fair Plan or fire insurance. This is a rogram designed to write fire insurance on di cult to insure ro erties. ou can also urchase a wra around policy to cover additional causes of loss not covered by the Fair Plan, thereby bringing your overall coverage close to that of a typical homeowner’s policy. Many agents are registered with the Fair Plan to act as brokers for policyholders, assisting with su mitting a lications to CA Fair or fire insurance coverage. Answer #3–I you are offered a renewal homeowner’s or fire insurance policy from your current company, consider yourself ortunate, and ay the ill. This is not a good time to try to find a lower premium. Answer –Start shopping as soon as you know your policy is eing non renewed. Co erage at any rice can e di cult to secure, so don’t wait until your coverage expires. The CA Department of Insurance is currently reviewing the methods underwriters use to measure the Wildfire Rating of CA properties and is promoting the idea that insurers return to prior methodology in brush areas. Insurance companies, if forced to withdraw from their current Fire Scoring methods, might further withdraw from the CA property insurance market. Thanks to Terry Jarcik at Cal-Nevada Insurance Agency for writing this article. You can contact Terry at 775.831.1422, tahoepro@aol.com or www.calnevadains.com.
CATT GUIDE / 2021–2022
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