7 Risks to Consider Before Renting Out Your HomeSome homeowners Insurers are raising rates and cancelling coverage following two years of devastating wildfire losses. Homeowners must act now to secure affordable coverage for their homes.
Why California Homeowners Insurance is Scarce
In 2017, 7,117 fires burned 505,956 acres, according to CALFIRE. In 2018, 6,284 fire burned 876,147 acres. These fires have devastated communities and destroyed homes. The emotional cost has been enormous – and so has the financial cost.
The 2018 wildfires resulted in insured losses of $11.4 billion, according to official estimates. Despite this high figure, not all losses were insured. Some homeowners with insurance have found that they do not have enough coverage to pay for the construction of a new home in California.
The New Normal
As increased wildfire activity becomes the new normal, more areas are being categorized as high-risk. For homeowners trying to secure insurance coverage, this is a reason for concern. Some homeowners have received notice of nonrenewal and some insurance companies no longer offer homeowners insurance coverage in California.
Other homeowners are experiencing rate hikes, some of which are substantial. According to the California Department of Insurance, some homeowners who had been paying $800 to $1,000 a year for insurance coverage were given rates of $2,500 to $5,000 upon renewal.
Unfortunately, these problems show no sign of abating. The National Interagency Fire Center predicts above normal fire activity in California this summer.
How to Protect Your Home
Don’t wait until the next wildfire strikes. Homeowners must act now to make sure they’re fully protected.
- Get insurance. Finding affordable insurance may be increasingly difficult, but it’s more important than ever. Don’t give up if you have been refused coverage. Even if one insurer denies coverage, another may be willing insure your home.
- Check your coverage amounts. If you’re underinsured, increase your limits now. If your home is destroyed, you’ll want enough coverage to rebuild. If you have owned your home for a while, or have made upgrades, the value may have increased substantially over the years.
- Maintain your policy. Once you find a good policy, you want to keep your coverage in good standing. Make payments on time to avoid cancellation.
Need assistance? Contact Heffernan Insurance Brokers’ Personal Insurance team.
