Since 2006 I have been involved in homeowners insurance, working from Mammoth Lakes, primarily within Mono and Inyo Counties. We have seen an evolution in the way homeowners insurance carriers evaluate and write insurance. It seems the dynamic evolution from the carrier side has outpaced both homeowners and government entities, such as the California Department of Insurance. This is not surprising considering insurance companies are in a competitive and for-profit industry.
An excerpt from Insurance Commissioner Ricardo Lars’s notice, dated 12-5-2019, to insurers writing residential and commercial property insurance in California:
"California’s property insurers are taking action statewide to reevaluate their risk and retreat from areas they identify as having higher wildfire risk. In many communities across the state, finding affordable comprehensive fire insurance has become difficult. So difficult that real estate transactions have stalled or been cancelled. If this trend is allowed to continue, it could further disrupt local real estate markets and cause property values to decline, reducing tax revenue available for vital services to residents such as fire protection, community fire mitigation, law enforcement, road repairs, and hospitals in these communities.”
What may have been considered an average homeowners premium of around $2,400 five years ago may not be available today as many companies have decided not to offer new policies in the Mammoth Lakes and Crowley Lake zip code 93546. We are now dealing with insurance companies who are specifically mapping a home’s location and looking at factors such as fuel loads on their property and surrounding areas within a mile away creating a “heat map” of green, yellow and red zones.
In 2019 our agency and clients were impacted by cancellations from some carriers. We also received calls from many people who were cancelled by other carries that have since been able to join up with our agency. I look back in retrospect and have named it "the year of cancellations."
From a macro prospective, the insurance industry is showing signs of exiting the “cancellation phase” of this market cycle. The Department of Insurance has approved rate increases and we are seeing insurance companies focus on renewals and search for profitability. Even though we are never excited to see our clients receive rate increases, it’s better than a cancellation as it offers one more choice to our clients. We also see hope that these carriers who have stuck with insuring properties in California will find the next phase of the market cycle. Once companies find rates they are comfortable with, we'll hopefully see Travelers, Nationwide, Safeco, and Hartford wanting to write new policies in zip codes around California like 93546. This will lead to competition and finally the softening of insurance rates... what goes up does come back down in a competitive free market.
Fortunately, we are experienced with the Mammoth Lakes, Crowley Lake and Bishop communities and have some carriers who are willing to evaluate and write insurance in our area. We have also participated in the California Fair Plan when the preferred market is unwilling to insure a home. The combination of a CA Fair Plan Policy and DIC Combination policy is an option of last resort for some homeowners. We will continue doing our best for clients and communities combining local knowledge with the best carriers the marketplace has to offer.
Please reach out to us if you'd like to discuss the circumstances and options surrounding your homeowners or commercial insurance. We're happy to review your insurance for additional options and verify that you're getting the credits and multi-line discounts your property may be eligible for.
Sources:
http://www.insurance.ca.gov/0400-news/0100-press-releases/2019/statement100-19.cfm
https://www.cfpnet.com/
https://cafiresafecouncil.org/resources/fire-safety-information-for-residents/