Is California to high a risk to insure?
News travels fast. The worse the news, the faster it travels. And like a wildfire that is growing out of control, the crisis that is the homeowner insurance market in California is accelerating and blowing up deals in escrow.
Hear from a few insurance experts and share your own insights 7 p.m. on Tuesday, Oct. 8 during Tulare County Voices insurance forum at 210 W. Center in Visalia.
Here are excerpts from a few of the news reports in California over the past several weeks:
“State Farm is projecting that by 2028, the number of policies it issues in California will drop by 1 million, as the insurance giant grapples with financial distress and pulls back from the Golden State.” – San Jose Mercury News, Sept. 30
“Many California families are opening their mailboxes and finding a bombshell: a letter from their insurance company saying they’re losing their homeowners insurance coverage, even if they live where you’d think fire risk is low.” – NBC Bay Area News, Sept. 26.
“California’s homeowners insurance crisis is making it more difficult to build and buy affordable homes — and in some cases impossible.” – Capitol Weekly, Oct. 1
“Many insurance companies have stopped writing policies in the state because of increased wildfire risks, but that’s not the only reason. They say in the case of any catastrophe, the potential costs of replacing any residential or commercial property, from labor to material costs, is just plain more expensive now. So even owners of properties in areas that are not at high risk for wildfires have had their policies canceled because their buildings may need repairs or improvements.” – CalMatters, Aug.13
Clearly a storm is gathering. Will it strike this area? Could you be faced with higher insurance premiums or even have your insurance canceled? How will this business development affect us in Tulare County?
Tulare County Voices at 210, a monthly forum co-sponsored by the Visalia Times-Delta and First Presbyterian Church at 210 W. Center Ave. will direct its attention to the state insurance issue at its October forum, “Uncovered: Is California becoming uninsurable?” at 7 p.m. on Tuesday, Oct. 8 at 210. Admission is free.
Helping to sort out the facts on this topic will be several local experts in insurance and real estate, including Rona Swanson, a veteran agent for American National Insurance; Chris Jolly of Melson Realty and president-elect of the Tulare County Association of Realtors; and Tom Collishaw, CEO of Self-Help Enterprises. Joining the forum via Zoom will be a member of the state insurance commissioner’s office.
Among the questions that will be directed to these experts will be ones to help the audience and the community understand how these changes in the insurance industry might affect their own financial situation:
- How extensive is the insurance squeeze, and how painful for policyholders? Does it affect everybody?
- What have been the causes of California’s insurance crisis?
- What will be the remedies, and are they being pursued?
- How much has the crisis interfered with business such as real estate sales or business creation or expansion?
- How many insurance companies have stopped insuring in California?
- Are real estate deals affected by the insurance crisis?
Reports indicate that the most severe reactions – canceled policies or the inability to obtain insurance – have been to property in areas most susceptible to natural disaster – flooding, mudslides and, especially, wildfires. Wildfires have been specifically cited by insurance carriers as reasons for their leaving California.
There are other consequences, however, for policy holders whose property is not in an area prone to natural disaster, including increased premiums, limited coverage and inability to obtain new coverage. The tightened insurance market has already had an effect on local real estate deals.
Eventually those inconvenient facts seep into everyone’s business, and property owners would be served by knowing more about them. Meanwhile, policy makers in Sacramento are aware of the issue and are seeking remedies.
Tuesday’s forum will provide an opportunity to learn about this fast-moving trend and how to build a firewall against it. Join Tulare County Voices at 210 and join the community conversation.
Paul Hurley is a retired Opinion editor for the Visalia Times-Delta