California Homeowners See Big Rate Increases

Home in Nevada County, California, looking to save money and lower homeowners insurance rates.

California homeowners in Nevada County where the Camp Fire destroyed the town of Paradise are having a hard time finding affordable homeowners insurance. In many cases, homeowners are having trouble finding any insurance company that will cover their home after their current insurance company declined to renew their policy.

Homeowners have been told that none of the big insurance companies are writing policies in the area. Residents who have been lucky enough to find an insurer are seeing huge premium increases. Jeanette George, who was recently profiled in a The Union article got a quote that took her current $1,200 annual premium up to a budget busting $4,000 a year.

Many of the homeowners looking for a new policy are former customers of Merced Property & Casualty Company, which went belly up after it could not cover the cost of claims from the Camp Fire. State regulators have stepped in and are starting the liquation process but the odds of policyholders being made whole are slim.

At the time of the fire, Merced had 705 policies in force in Nevada County. Across the state, Merced had 7,531 policies according to data from the California Department of Insurance.

Northern California homeowners have suffered insurance issues before the Camp Fire. Premiums have always been pricey in this area with premiums climbing dramatically in Paradise. Those costs will likely rise even more now and some home sites may be deemed uninsurable.

Homeowners should be prepared for rising premiums as well as difficulty finding coverage. Teresa Dietrich, real estate agent and president of the Nevada County Association of Realtors said in The Union article  “People can still get policies,” obviously, those policies are more costly. They’re not just assuming it’s fire safe anymore.”

Insurance Agents Working Overtime

Insurance agents whose customers were with Merced are working overtime to move their clients into new policies. Merced had $64 million in losses from the Camp Fire alone.

According to local agents, finding new policies can be difficult as some insurers pulled out of the area years ago. Four of the major insurance companies no longer write polices in Nevada County and the surrounding areas.

While it is still possible to find a policy in the area, agents warn homeowners to be prepared for premium shock. In the end, if it is impossible to find coverage in the private market, some homeowners may have to turn to the FAIR plan.

The FAIR plan is the state run insurer of last resort. FAIR plan policies are very limited, only covering fire damage, homeowners must carry a separate policy to protect their homes from other perils. These policies are priced to accurately reflect the risk presented so they are rarely cheap.

Homeowners must shop the private market before they can turn to the FAIR Plan and must provide proof they cannot find coverage in the private market. Currently, the FAIR plan covers 4,269 homes throughout the state.

Tips for Finding Coverage

Here are a few tips for finding homeowners coverage:

• Shop Around:This is an absolute necessity in Nevada County and the surrounding areas. Call all of the major insurers for a quote and be sure you are comparing apples to apples when it comes to coverage levels and deductibles. Or submit an online quotes request on our website so we can easily help you compare up to 12 competitive California home insurance quotes.
• Use a Local Agent: In cases where it is difficult to find coverage, local agents are your best bet. They will often know which insurers are still writing policies in the area and who has the best pricing for your particular area. Our online quoting services allows you to speak to a local professional that is aware of coverage options in your area.
• Raise Your Deductible: Pushing up your deductible is a good way to lower your premium. Doubling your deductible can result in significant savings but make sure that you can afford whatever deductible you choose in the event you have to make a claim.
• Upgrade Your House: If your home is still standing, consider upgrading your roofing materials or installing a sprinkler system. While these can be pricey upgrades, they will lower your insurance premium while helping to keep your home safe. If you are rebuilding your home factor in the cost of fire resistant materials. For extra savings, please review our Top 5 Home Improvements That Can Save You Money on Your Home Insurance