The insurance market is rapidly changing in areas subject to wildfire risk, like the East Bay Hills. We contacted one of our trusted insurance agents, Ruth Stroup, Farmers Insurance, to help shed some light on current insurance issues.

Ms. Stroup shared that across the board she is seeing new stricter guidelines for new policies. Some carriers are not renewing high risk policies and most carriers have increased their rates. (This also includes earthquake insurance, especially if you own a home on the Hayward Fault.)

It may be time for a policy review, so speak with your insurance agent. Ms. Stroup mentioned that in general, the cost of insurance tracks an increase in housing costs to cover the replacement costs on a home that may be taken by fire or damaged by an earthquake or flooding. She advised that if you have added to the value of your home through renovation, that you should talk to your agent to ensure you have the correct coverage and policy for your needs.

The East Bay Express recently reported on the issue of insurance policies in the face of wildfires: “Some insurance companies are canceling policies of homeowners who live in or near wildland areas in California, including the Oakland and East Bay hills, because of concerns about the proliferation of catastrophic wildfires”, reports Kimberly Veklerov of the San Francisco Chronicle. “We’re looking at a future where there will be increasing challenges of insurance availability for some homeowners in some areas of California,” said state Insurance Commissioner Dave Jones. “The areas where this is a problem are likely to expand.” Property owners who lose their insurance can enroll in a state-sponsored plan as a last resort.

Mortgage Lenders May Reach Out To Be Sure You Have Enough Coverage

Recently, a Berkeley Hills Realty client contacted our office and asked about a letter they received from Wells Fargo. The letter suggested that the homeowners consider increasing their homeowners insurance coverage and implying that they may be in violation of their mortgage agreement if they did not take some action.

Ms. Stroup said that Wells Fargo sends out those types of letters systematically and has been doing it for over ten years. The letters are sent to borrowers with “Dwelling Coverage” less than the amount of the loan.  Wells Fargo doesn’t consider additional factors like extended replacement cost coverage.

The letter is not a demand nor enforceable, but other companies may have specific insurance requirements, so you have to check with your lender.

Berkeley Hills Realty will continue to share information about insurance issues affecting homeowners in the East Bay.

Thanks to Ruth Stroup, Farmers Insurance https://stroupins.com