What Californians need to know about new insurance developments.
What’s been going on with insurance in California? It’s been a growing concern in many of our regions, with more and more clients reaching out to us, bewildered by the notifications of insurance policy cancellations. To add to the chaos, we’ve seen major insurance companies like State Farm completely pulling out of California, while Allstate is refraining from underwriting new policies.
So, what’s the plan of action for homeowners in such a turbulent insurance landscape? It feels like déjà vu from a few years back when the California Fair Plan was introduced, primarily for high-fire-risk areas. Now, we’re bracing ourselves for another wave of uncertainty. Fortunately, there are options available, including the California Fair Plan, although “fair” might not accurately describe its pricing structure–it tends to be rather expensive.
With the California Fair Plan, you essentially end up with two policies. We recently had a client who received a cancellation notice from Berkshire Hathaway, despite having a favorable plan with an annual cost of around $2,200. However, due to limited alternatives, their insurance costs surged to over $5,000 when they attempted to secure a Fair Plan.
When you’re considering a home purchase, factoring in insurance costs is crucial. Monthly insurance expenses can significantly impact your housing budget, whether you’re a buyer or seller. As a seller, be prepared for potential concerns from buyers about insurance costs.
We have techniques to make this more manageable for buyers, but it’s also worth noting that the higher insurance costs are often tied to the area rather than a specific home. In wooded regions, for example, insurance rates tend to be elevated. We’ve had clients reevaluate their preferences and opt for more suburban neighborhoods after examining insurance costs.
It’s advisable to consult with us when you’re contemplating a move. We can provide guidance and point you in the right direction based on your location preferences. Additionally, Metro offers a disclosure service that can assess housing numbers and determine whether a property falls within a high-fire or severe high-fire hazard area.
If you’re grappling with insurance issues, please don’t hesitate to call or email us. We have established relationships with experienced insurance professionals who can answer your questions and explore available insurance options tailored to your specific needs and property. Your peace of mind is our priority.
