Homeowners’ insurance companies have taken a beating in recent years, especially those that cover homes in rural areas like ours. Consider the payouts to homeowners in Redwood Valley, Potter Valley, and other communities devastated by wildfire.
The unfortunate result is that homeowners throughout Mendocino County are getting notes like the one I just received from insurance companies trying to mitigate risk. I first received a letter informing me that the insurance inspector was not happy with a large oak tree branch hanging over my roof, as well as a grapefruit tree right next to my house and a few other minor complaints. I cut the oak, pruned the grapefruit, and fixed the other issues in hopes of getting back into my insurance carrier’s good graces.
Not long afterwards, I received another letter, this one saying that my insurance policy would not be renewed. What?!
In fairness, my home is somewhat fire prone with its redwood siding. I replaced the original redwood shake roofing with composite shingles, but it’s still a well-organized pile of kindling, according to a firefighter friend of mine.
So, although I am disappointed to lose my insurance, I confess I have sympathy for insurance companies. They are in the business to make a profit. Before your gasp in horror, remember, we are all in business to make a profit—and we should support insurance companies being able to do so or we would all be left with the risk of losing everything in the event of a wildfire.
However, sympathy or not, I still have a problem: my insurance is soon to be canceled. When I called my local insurance agent, Mark Davis, he let me know I wasn’t alone. People are receiving cancelation notices all over rural Northern California.
The question becomes, what can we do about this? If you cannot find standard homeowners’ insurance, you may opt for the California Fair Plan, a state-sponsored insurance plan that will insure almost anything. The downside is that you pay a high premium to cover the high risk.
The California Fair Plan is different from traditional homeowners’ insurance in that it only covers the structure, not the contents and not all the other potential risks of homeownership, such as the mailman slipping on your porch or your dog biting the kid next door.
If you are forced to insure through the California Fair Plan, you should consider purchasing a secondary homeowners’ policy through a traditional insurance carrier, too—one that covers everything except the structure.
The moral of the story is to be proactive about this. Make your home as insurance friendly as possible from day one, not only to reduce wildfire risks, but other risks, too. The Mendocino County Fire Safe Council (firesafemendocino.org) has excellent suggestions on reducing fire risk, and your insurance agent can offer recommendations on reducing other types of risk. In the meantime, here are a couple of pieces of advice. If you have a trampoline, donate it to a friend or charity, anyone who isn’t concerned about insurance risks. And if you’re in the market for a puppy, avoid breeds with reputations for aggressive behaviors.
If you have questions about property management or real estate, please contact me at email@example.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.
Dick Selzer is a real estate broker who has been in the business for more than 45 years.