Hot Top: Homeowners Insurance in the Sierras

Back-to-back severe wildfire seasons in California are changing the insurance landscape and have cost billions in insurance losses. This makes insurers more cautious about writing policies in California, particularly in “high-risk” areas. Both 2017 and 2018 had a greater number of fires than the running 5-year average. To put it in perspective, compare the direct losses for homeowners and farm-owners in 2018 vs 2016:

  • 2016 direct losses: $4.2 billion
  • 2018 direct losses: $16 billion

More than 25% of California homes are at moderate to extremely high risk of being ravaged in an annual wildfire. That means 1 in 4 Californian’s home is at risk for wildfire.

The number of California homes and properties at risk of wildfire threat have reached nearly 7 million, according to a Villanova University study published in August 2018. That’s because more and more homes are built each year in the Wildland Urban Interface (WUI): areas where homes are built near or among wildland vegetation. The WUI is the fastest growing land-use type in the United States. And the riskiest. Wildfires burn more frequently in the WUI and are most difficult to fight there.

More and more insurers are issuing nonrenewals to homes at high risk for wildfire. Here’s what you need to know to keep your home covered. CALFIRE uses a Fire Hazard Severity Zone model developed by scientists at the U.C. Berkeley Center for Research and Outreach as the basis for evaluating fire hazard in local areas.

CALFIRE has created a list of cities deemed high or very high risk; see if your city made the list.

The Fire Hazard Severity Zone (FHSZ) maps are used by:

  • Developers to determine where ignition resistant building materials will be required for new construction.
  • Homeowners to identify properties that will require defensible space maintenance.
  • Real estate agents and sellers who will be required to disclose natural hazards at the time of a property sale.

FHSZ maps can influence land use decisions, property values, and, yes, insurance rates.

If your home is one of the millions of properties in California deemed “high-risk”, you have options for insurance. Or if you’ve been dropped by your insurance company or find yourself facing larger and larger premium payments to keep your existing coverage, you’re not powerless.

The secret to finding affordable homeowners insurance for your high-risk home is finding the right insurer. Because not all insurance companies are created equal. Some insurers specialize in high-risk homes. These insurers are prepared to cover your home, no matter where in California you live. Reach out to your TEAM TAHOE Real Estate Agent for a list of preferred insurers in the area.