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The facts are that too many high fire hazard area residents are being
..."burnt twice"...first by the fire, then by trying to re-coup your losses"
(Quote by Steve Poisner, Former CA Insurance Commissioner in 2007)
Blog Post May 2020 - The State of the "Brush" Area Insurance Market - Douglas E Nadybal
The bottom line for many high fire hazard area homeowner's is that your insurance costs have skyrocketed yet your coverage still contains serious gaps. Many people are now priced out of the market for comprehensive coverage or can't find it at any price. Several new carriers have entered the market for fire, flood and earthquake insurance. But the question still remains, have they the solvency to withstand a mega-loss? If you receive a fire insurance offer from one of them, should you consider it? Maybe, but you might end up losing access to even CA Fair Plan, which has very deep pockets. The recent major fires took down at least one California insurance company leaving policy holders in a difficult spot.
Even very basic insurance, such as California Fair Plan has gotten really expensive in many areas. Having very basic coverage, while better than nothing, could leave you with tens of thousands of dollars in un-reimbursed expenses. You might even be forced to move while still having to pay your mortgage, or risk default if you can't bear the cost of operating two homes. Are you prepared to do this for 2-3 years, or longer?
Properly understood, your home is both and asset and a liability. To survive a fire, earthquake, flood, etc, it and you require comprehensive asset and liability protection. This goes beyond basic insurance planning. Asset protection requires advance planning. If you wait until after a fire or lawsuit to do something, you have little to no impact on the outcome. Fire insurance planning, is a part of your over-all insurance risk management, which in turn is a part of your over-all asset protection plan. Fire insurance planning requires not just insurance. If you just buy insurance and forget about it, it is probably not going to work out very well.
Just as there are many bad financial advisors, there are many insurance agents that are incompetent in the area of high fire risk insurance. According to our own California Dept. of Insurance, the majority of homes, including homes in high fire hazard zones, are incorrectly insured. Many agents push coverage to supplement basic fire insurance that in fact pay nothing for losses due to brush fires. D.I.C. homeowner's are one of them. Even the Fair Plan is pushing them.
We like to think of ourselves as an asset protection service specializing in protecting you from your own insurance. Your fire insurance is a vehicle to get you back home. But, it requires a driver, and that driver has to be you. It has to be set up correctly and there has to be documentation. If you are deficient in either, you could be out of your home a long long time.
Our goal is to educate and assist and direct you in all of the pre-loss planning steps you need to accomplish to asset and liability protect your home. This is not about selling your more insurance. Over-insurance is wasteful, and can even be harmful, just as much so as under-insuring. This about getting it right and being able to prove you got it right when push comes to shove after your file a claim.
Our former State Insurance Commissioner, who is quoted above, said it best. Do not allow yourself to get into a position where you can be "burned twice." What do you think he meant by that? We have gotten kind of used to insurance commissioners being either a lackey for the insurance business or a using the office as a bridge to higher office. The commissioner quoted above, went right out to the brush areas in San Diego and Malibu after one of our huge fires, and just told it like it was. The insurance company is not just going to show up at your former house with a cart full of money. They may deflect, deny and do whatever else to discourage your claim. These tricks of the trade are not new, just new to you.
Using our planning steps leads to tangible positive goal ... getting back into your home, if that is your goal, months if not years sooner.
You save money by eliminating insurance that does not do anything to achieve that goal and by eliminating lengthy out-of-pocket expenses.
In this day and age, you need much more comprehensive than an insurance agent who is just a collector of premium.
You need access to all of the latest tools for appraising and documenting your home and personal property in the right format.
You need the capabilities of an insurance broker with access to multiple markets to find you the right combination of insurance products.
You need a planner skilled in all aspects of asset protection, going beyond insurance.
You need the experience that comes from having gone through several catastrophic events, so you can be informed as to what is coming at you.
You need an insurance advisor you can trust to tell you the truth about the insurance you have. Everybody points to the under-insured problem, yet few are willing to point out how you could adjust the insurance you have to position it to be more in line with your objectives.
Please contact us for a consultation. Remember, after the fire, earthquake, flood, or lawsuit, it is too late to change the outcome.
Douglas E Nadybal, MBA, Owner and Founder of Hillside Services Insurance Agency and Brokerage &
Deserwest Capital Management - An Asset Protection Company
Contact me at: firstname.lastname@example.org. Call: (805) 522-1808
40 years experience in helping California high fire hazard area property owners and still growing strong.
| Knowledge and advance planning before a fire happens are essential to you prevailing in an insurance claim.
Insurance Commissioner to So, CA Hillside Residents... "Don't Get Burned Twice..."
An independent study of the aftermath of the 2007 regional fires in the greater San Diego area concluded that a staggering 95% of the damaged homes were insured incorrectly. For many of the more than 1500 families who lost their homes, insurance benefits ran out long before their home were re-built, leading to a staggering average re-building time of over 3 years.
||If you live in a CA wildfire area ... you have options
The CA Fair Plan is the self proclaimed "insurer of last resort" for basic fire insurance. It is a risk pool backed by the resources of the participating insurance companies. If your home can meet certain risk standards you might be able to obtain insurance at better terms and price from these same or even other insurance companies not in the pool. We can pre-qualify your home and suggest possible changes to the fire safety of your home so that when you do apply, you have a better chance of being approved.
||Fires / Floods/ Mudslides/ Earthquakes/ Lawsuits / Thefts / Forced Relocations ....
If the only coverage you now have is Fair Plan fire insurance, you have coverage gaps that need to be addressed either by self insurance or by a combination of several other insurance policies. For many high fire hazard area property owners, what works best is to first define your coverage priorities by defining what you want to happen after you have a loss.
||How Much Will my Fire Insurance Actually Pay?
Victims of Katrina, Sandy, Oakland Hills, San Diego etc - learned that the amount of coverage
shown on their policies is not a guarantee but rather a limit of what the could collect after a loss.
After the Oakland Hills fires,in which over 6000 homes were destroyed, over 1500 families had to
sue to collect or were unable to collect on the replacement value. There are steps you can take -
must take - before you have a loss that can level the playing field.
||Is Flood Insurance Worth Having?
In the aftermath of hurricanes Katrina and Sandy flood insurance rates have gone through the roof as insurance providers try and re-coup their losses. Now, new players are entering the market once dominated by the Federal National Flood Insurance Program. As the picture to the left shows, maybe what you really need is not flood insurance, rather landslide insurance. They are two different things.
||How Much Should I Insure My Home For?
If you were to ask a contractor, a public adjuster and an insurance company how much to insure your home (structure) for, you will get three, possibly massively, different answers. It is a foregone conclusion that you will have to be prepared to fight for everything you can get from your insurance company. The key is to understand that the ultimate number cannot be exactly determined until you actually have the loss. Obtaining an appraisal now may not mean as much as it would to be able to re-create one right after the loss. For this, you need detailed documentation, because the burden of proof is all on you.
||How Safe is Your Home From Fire?
Why was one home taken by fire and the one right next it left standing? Most homes lost to
brush fires are never touched by walls of flame, but are ignited or damaged by are radiant heat, or
from flying embers that can travel for miles. The sad part is that while you can and probably have
already done 99 things to protect your home from fire, it can be the 1 little thing you miss that can
do you in. When you become a client, we can help you ferret out the commonly missed points of
Questions for Your Contractor - What Would It Cost To... ?
Beyond the basic idea of creating a defensible space around your home, there is an evolving body of steps you can take to modify your home. We try and keep our clients current as to about what the new technologies are and what they cost, and provide feedback from other high fire hazard area homeowners who have tried them at their homes.
||What Good Is A Home Inventory?
A personal property home inventory can take a lot of time to do yourself or cost $250-$1000 or more if you have it done. Then, you have to keep it up to date, or it becomes quickly dated. The value of having of having a home inventory is because it can reduce claims settlement time from years to a few weeks or months, and can substantially increase your policy payout. As with dwelling valuations, for most people the cost effective way is to leverage the capability of your digital camera to be able to re-create one later if needed.
||FAIR Plan Policy Holder Calls Acronym a "JOKE"
During testimony before the CA Dept. of Insurance it was reported at a 62 year old veteran was unable to reach a settlement with the Fair Plan for his claim made in the aftermath of the 2007 regional fires. By his account, the Fair Plan was holding up the entire claim by requiring specific information on each and every one of the over 2,800 book titles he claimed. This avoidable dispute went on for years.
||Malibu Homeowner's Fooled by His "Wrap-Around Insurance" Plan.
" Wrap-around" homeowner's policies have seriously retrogressed in value. Years ago, the purchase of the combination of a Fair Plan fire insurance policy and a homeowner's wrap-around policy, would result in having the exact same coverage as provided in a comprehensive single homeowners policy, this is largely no longer the case. While they still do provide some important coverage not offered by the Fair Plan, they commonly included "difference in conditions" limitation can negate other key coverage items.
||Are You Living In An Insurance Bubble ... A False Comfort Zone?
Three things must happen before you have a major loss ... (1) your insurance, being your last line of defense must be free of un-intended gaps, (2), you must have some serious documentation in place, (3), your defensible space must be just that, and free from overlooked points of concern that could undo the entire plan. For the most part, "brush area" residents lack all three! The end result is having a large portion of your insurance that you will never stand a chance of collecting on. In truth, your decision on what to do depends on your answer to this question ... if you have a total fire or other total loss, do you stay or do you go? If you really want to get back into your home, then your pre-loss preparation means everything. If your agent or broker handling your insurance cannot help you in all three outcome areas, you are not being well served.