Brush Mapping

[SkisALot]

Does anyone have any experience with high risk homeowner's insurance? DH and I have been looking at moving to a lower altitude (we're in California, currently living at 7300 feet). We're interested in one of two houses at 4500 foot elevation and have discovered that due to "brush mapping" by the standard insurance companies, none will cover either house. Our only option is to get high risk insurance coverage through a company such as LLoyd's of London at a much higher cost than standard insurance. This brush mapping is apparently occurring in the 9 western states. In the case of the region we're looking at, the mapping includes an area just outside the nearest city limitsand into the 5000 foot elevation. Apparently if a person is already insured by standard insurance, he can keep the policy (with skyrocketing premiums) but new homeowners in the area are out of luck even if they're near a fire department or in an area of little brush that can be cleared.

 

[W2R]

Sorry to hear this.

Is there any kind of state sponsored high risk insurance? Sometimes that is the only reasonable option.

 

[SkisALot]

Sorry to hear this.

Is there any kind of state sponsored high risk insurance? Sometimes that is the only reasonable option.

California does have a state sponsored insurance. I'm not sure what the coverage is or how it works other than it's very expensive. And you have too apply in writing. With the "state" of the state these days there's no telling how long a response would take.

 

[Koolau]

I'm wondering if you can find insurance which covers all the other hazards (fire, caused by other than brush, liability, theft, wind, etc, etc.) IOW, you are covered unless a brush fire takes out your house. If so, there are ways to limit the potential for damage (brush removal, water storage for fire control on site, etc.) I can see an insurance co. not covering an "obvious" hazard, but why would they just say "no insurance of any kind?" This is sort of a "pre-existing" condition. Okay, don't cover brush fires, but cover the other stuff at normal cost. Anything like this available to you?

 

[ERD50]

Sorry to hear this.

Is there any kind of state sponsored high risk insurance? Sometimes that is the only reasonable option.

It does not sound reasonable to me. If someone wants to move to a high risk area, why should they expect the other people in the State to pay part of their insurance bill?

The person moving there should decide if the cost/risks of living there is worth the benefits. It's no one else's business.

edit/add: Koolau - if there is a mortgage holder, they will want full coverage.

-ERD50

 

[W2R]

It does not sound reasonable to me. If someone wants to move to a high risk area, why should they expect the other people in the State to pay part of their insurance bill?

States provide this to encourage people to move there and buy homes and pay taxes, I guess. I am thinking of the high risk wind/hail insurance that sometimes is the last resort for new insurance in hurricane prone areas. I know that here, I was "grandfathered" ("grandmothered"? ) into being able to keep my Allstate policy, but AFAIK those who move to New Orleans must get the state sponsored insurance at about twice the cost.

 

[SkisALot]

It does not sound reasonable to me. If someone wants to move to a high risk area, why should they expect the other people in the State to pay part of their insurance bill?

The person moving there should decide if the cost/risks of living there is worth the benefits. It's no one else's business.



-ERD50

I agree with this. In fact, the people in rural areas of California already pay $150.00 a year with their property taxes for fire fighting. One of the issues with what the insurance companies are calling "restricted" areas (and in these areas no standard coverage of any kind is available), is that they are not that "brushy" or risky. The areas they are restricting are very big, some just on the edge of the city limits, some a mile from various kinds of fiire departments (CDF, forestry, etc). In many cases people have 3500 - 5000 gallon water tanks and swimming pools on their property. It just seems that the insurance companies are taking an extreme stance.

 

[W2R]

California does have a state sponsored insurance. I'm not sure what the coverage is or how it works other than it's very expensive. And you have too apply in writing. With the "state" of the state these days there's no telling how long a response would take.

Doesn't your insurance company facilitate this for you? Here, they get a "cut" of the premiums to administer the state sponsored insurance. Have you discussed this with your realtor? He/she ought to be explaining all this to you, IMO.

 

[youbet]

It just seems that the insurance companies are taking an extreme stance.

Insurance companies compete with one another for business and if their managers are rational (in the economics sense of the word), they establish prices which maximize profits. Higher prices = more profit per policy but they sell fewer policies. Lower prices = less profit per policy but they sell more policies.

Unless there is illegal collusion between the competing companies or unless the government is intervening with price controls, other regulations or tax subsidized policies (see W2R's post above), the prices being charged are probably a reasonable reflection of the cost to provide the protection.

While I'm sympathetic toward folks living with risk and paying dearly for insurance, it does seem that having taxpayers subsidize insurance for private landowners tends to be regressive and therefore, to me, inappropriate. If someone choses to enjoy the high tier amenities of living on a river, in a beautiful but fire-prone rural area or in the Florida huricane belt, etc., he/she needs to be able to assume his/her own risk. Why should Joe or Joan Toolbox living in town and working in the factory pay higher taxes so Marvin MovieStar gets subsidized insurance for his luxury home in the hills over LA?

 

[SkisALot]

Doesn't your insurance company facilitate this for you? Here, they get a "cut" of the premiums to administer the state sponsored insurance. Have you discussed this with your realtor? He/she ought to be explaining all this to you, IMO.

Yes to both questions. It's just that we're stunned by the magnitude of the problem here. The realtor did discuss this after we brought it to her attention. We had asked a lot of the people in the areas about getting insurance after we heard "rumors." It's just one more blow to California real estate sales; apparently more deals fall out of escrow than are completed.

 

[W2R]

Why should Joe or Joan Toolbox living in town and working in the factory pay higher taxes so Marvin MovieStar gets subsidized insurance for his luxury home in the hills over LA?

Good point. AFAIK, although I could be wrong, the state actually is not losing taxpayer money at all on these insurance policies here. Yes, there is a line item on our state taxes (edited to add: or is it in my non-state insurance bill? I'm fuzzy on that)to subsidize it, but then last year's additional tax is subtracted from the next year's taxes. After Hurricane Katrina, the state insurance payoffs were abysmal from what I understand so they aren't losing much there, either. I sure don't mind one single bit, since I pay essentially nothing for it and without it, my town would become a ghost town.

 

[youbet]

Good point.

Thanks!

 

[TromboneAl]

Forget it and find another house.

Signed,

Someone who lost a house in a brush fire.

 

[mb]

Forget it and find another house.

Signed,

Someone who lost a house in a brush fire.

Did you lose a house in the Oakland fire?

 

[SkisALot]

Forget it and find another house.

That's pretty much what we've decided. So now, it's, "where do we go," to an earthquake zone, a tornado zone, a hurricane zone, a flood zone, an area with a high burglary or car theft rate. . .
P.S. In the "risky" area we were looking in, there has been one wildfire in 45 years, and it was caused by some kind of flub at the power company.

 

[FUEGO]

I'm wondering if you can find insurance which covers all the other hazards (fire, caused by other than brush, liability, theft, wind, etc, etc.) IOW, you are covered unless a brush fire takes out your house. If so, there are ways to limit the potential for damage (brush removal, water storage for fire control on site, etc.) I can see an insurance co. not covering an "obvious" hazard, but why would they just say "no insurance of any kind?" This is sort of a "pre-existing" condition. Okay, don't cover brush fires, but cover the other stuff at normal cost. Anything like this available to you?

Pure speculation on my part, but "progressive" states (like CA) often require certain things to be covered in an insurance policy, and exclusions (like no coverage of brush fire damage) may not be allowed per state insurance regs.

 

[W2R]

I'm wondering if you can find insurance which covers all the other hazards (fire, caused by other than brush, liability, theft, wind, etc, etc.) IOW, you are covered unless a brush fire takes out your house.

Mortage companies might require coverage for brush fires there, just as they require hurricane wind coverage here. After all, they've got a dog in this fight too, so to speak.

 

[SkisALot]

Pure speculation on my part, but "progressive" states (like CA) often require certain things to be covered in an insurance policy, and exclusions (like no coverage of brush fire damage) may not be allowed per state insurance regs.

No exclusion, no coverage. The funny thing about "progressive:" It seems to come back and bite you in the a. . .ah, backside.

 

[TromboneAl]

Did you lose a house in the Oakland fire?

Yes.