image of a wild fire
December 4, 2019

Wildfire Protection: Fighting for (the Right) Coverage in California

Extensive fire damage and claims related to wildfires have significantly increased premiums and reduced coverage options for many property owners in wildfire-prone areas such as California.

According to the California Department of Insurance, wildfire-related claims from July 2018 to April 2019 exceeded $12 billion. These claims include the July 2018 fires in Northern California and the November 2018 Camp, Woolsey, and Hill wildfires. When including claims from 2017 fires, the total losses amounts to approximately $33 billion.

As some insurance companies have folded in the wake of catastrophic claims and many properties are deemed uninsurable by others, both insurers and policyholders are left fighting for decreased coverage options. Some policyholders may even consider undercutting coverage to partially insure their property or reduce premium costs.

Many California homeowners struggle to find adequate coverage or receive cancellation notices despite having long-standing policies because their carriers are no longer able or willing to accept the risk. Those in the market for new property often face unexpected insurance costs that prohibit a purchase, increase loan amounts, or delay escrow proceedings.

Acrisure has a solution to these issues and more. Through our global network of Agency Partners, we are able to work with the nation’s top markets to provide specialized coverage for most, if not all, hard-to-cover properties.

Wildfire Coverage Considerations and Rates

The availability of fire insurance and rates vary greatly depending on your property’s location. Additionally, many carriers have tightened their classifications of risk overall and dramatically raised rates or cancelled policies based on mounting losses and claims. Carriers remaining within the market have levied higher premiums and introduced more restrictive acceptance policies to balance the claims in progress as well as claims expected for future wildfires.

Additional considerations of fire risk such as proximity to vegetation, brush, fire hydrants, and water sources play into policy availability and price as well as the surrounding terrain, accessibility, and local wind patterns. Public Protection Classifications also known as PCC scores rate a property’s risk of fire on a scale of 1 to 10 with 10 being a very high risk.

While it may be tempting to skimp on coverage to acquire lower rates, undercutting could mean having to walk away from your home after a fire despite paying your premiums. Merely having wildfire insurance doesn’t mean you can start over from exactly where you were before the fire. The right coverage will provide reliable claims payment without lengthy lawsuits, resources for alternative housing during the rebuild, and assistance with claims and permits in addition to helping rebuild and replace what was physically lost.

As helpless as it feels to watch your home go up in flames, the depth of your insurance coverage following a wildfire loss can make all the difference between rebuilding and bankruptcy.

Dependable Coverage

Understanding what your policy covers is invaluable in the case of a claim. Fire policies can be written to cover dwellings, separate structures (pools, driveways, outbuildings), personal belongings, and loss of use.

A comprehensive policy should include coverage to rebuild after damage, replace lost possessions, and pay for housing during repair and rebuilding.

Failing to find adequate coverage may result in expensive yet minimal coverage. If your policy is canceled or not renewed and you are unable to find a suitable replacement, lenders can purchase insurance on your property known as Force Placed Insurance. These policies are often expensive despite offering minimal coverage since they are designed to cover the lender’s interest in the property instead of yours.

Relationship-Based Service

Your insurance agent/broker should do more than sign you up for a policy. They should actively work to find and maintain your coverage while providing excellent customer service and proactive communication.

Acrisure leverages the strength of the Agency Partner network to go above and beyond using a consultative approach to fire risks and protection. We look beyond brush and wildfire area mapping to evaluate protection class.

We believe in educating clients on their risk profile, potential future exposures, and matching them with a proactive program that anticipates the unimaginable. While we can’t stop a wildfire, we strive to make you as comfortable as possible with the solutions we are offering. Transparency about the work and research we do on your behalf demonstrates that we have identified that best premium-coverage balance for your needs even when the premiums seem too high.

Rest assured that we’ll communicate and check in with you unlike less-personal companies who send cancellation notices by mail or only reach out at renewal time.