What you need to know about Homeowner’s Insurance
Recent Tragedies in Southern California make this topic more important than ever…
Rising Premiums: The California Department of Insurance has approved State Farm's request to increase home insurance premiums by an average of 22% for approximately one million customers. This decision aims to address the company's substantial deficit following recent wildfire losses.
Special Assessments: To cover a $1 billion shortfall resulting from Los Angeles wildfire costs, California's FAIR Plan, the state's insurer of last resort, is imposing a special charge on insurance companies. These costs are expected to be passed on to homeowners, marking the first such move in over three decades.
Coverage Challenges: Homeowners in high-risk wildfire areas, including parts of Southern California, are finding it increasingly difficult to secure or maintain insurance coverage. Some insurers are reevaluating their policies, leading to non-renewals and stricter underwriting practices.
Regulatory Actions: In response to these challenges, Insurance Commissioner Ricardo Lara has implemented a one-year moratorium on insurance non-renewals and cancellations for certain Southern California regions affected by recent fires. This measure aims to provide temporary relief to impacted homeowners.
Given these developments, it's crucial for San Diego homeowners to review their insurance policies, stay informed about potential premium increases, and explore all available coverage options to ensure adequate protection for their properties.
Here are three key tips for you based on the latest homeowners insurance developments:
Review & Compare Policies: With premium hikes and stricter underwriting, don’t wait until renewal—start comparing rates now. If your insurer is increasing costs or non-renewing policies, explore alternative carriers, bundle policies, or check California’s FAIR Plan as a last resort.
Proactively Mitigate Risk: Insurers are prioritizing homes with fire-resistant features. Consider upgrades like Class A fire-rated roofing, defensible landscaping, and home hardening measures. Providing proof of risk mitigation could improve your chances of securing better coverage.
Plan for Higher Costs: With special assessments and premium increases coming, factor in rising insurance costs when budgeting for home expenses. If you’re buying or refinancing, work with your lender to understand how insurance changes could impact your monthly payments.