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With all the recent wildfires, insurance company bottom lines have been dramatically impacted. We never really worried much about your ability to get insurance…it was almost always available and at a fairly reasonable cost. That is changing…
Q: Where has the most dramatic change occurred in homeowner’s insurance?
A: The availability and cost of Fire Insurance. Not only are the rates rising but in some places, insurance companies are not writing new policies for Fire Insurance.
Q. What happens if my insurance company raises my rates?
A: Get on the phone and call around to other insurance companies. Or call me for some referrals.) In most cases, it better to stay with your existing company rather than changing companies altogether.
Q: What if they cancel my insurance?
A: There is a program called the FAIR Plan (https://www.cfpnet.com/) which operates similarly to the California Earthquake Authority where fire insurance is available. Its expensive though.
Q: What about Flood insurance…is it required?
A: Around here, usually no unless you are in a designated Flood Zone. If you are in a flood zone and have a federally insured loan on your house, you will be required to get flood insurance (usually in the $2-3,000/year range)
Q: What other insurance issues are you seeing?
A: AirBnB, vacation rental, etc. If you are using your home for short term rentals, be sure to contact your insurance company to make sure you have the right kind of coverage.
Q: Anything else?
A: Vacant homes. If you are planning to have your home be unoccupied for an extended period of time, (usually 60+ days) be sure to call your insurance company to confirm that you will be covered.
Q: What about an Insurance Broker vs. an Insurance Company?
A: Brokers offer access to insurance products from a wide range of insurance providers so would be a good place to start if you are having trouble finding insurance. Your best bet is to call around. Combining all your insurance needs under one roof often provides substantial discounts so be sure to ask.
Q. Should I upgrade the policy I have had for many years?
A: Yes, it is definitely worth reviewing. Replacement costs have risen dramatically, labor is more expensive. There’s nothing worse than paying for insurance that ends up not covering you when you really need it.
Owen Halliday is a REALTOR who manages the Sereno Group Real Estate office in downtown Los Altos. If you have a subject you’d like addressed in a future column, Owen can be reached at owen@serenogroup.com or 650-492-0062.
