Writings about residential real estate and all things home, by Cynthia Cummins of Kindred SF Homes.
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“He who laughs has not yet heard the bad news.” ~ Bertolt Brecht
I’m not here to alarm you unnecessarily, but this is one post you may want to continue reading.
If you’ve followed the news at all, you’ve probably heard about the current “Homeowners Insurance Crisis” affecting much of California – especially properties located in wildfire-prone areas. Because San Francisco isn’t susceptible to wildfires, you might assume city properties are unaffected. This is not true.
Here are the Cliff Notes (a la yours truly): Insurance companies have been paying out lots of insurance claims in California (as you already know). They say they are prohibited from raising their rates enough to stay in the insurance business in California (a new variation on a recurring theme). So, a bunch of insurance companies have ceased writing any new insurance policies in California (Allstate, State Farm, others). And other insurance companies are tightening the screws on what sorts of properties they’ll write policies on.
In San Francisco, some insurers are refusing or hesitating to insure, due to some of the following reasons:
You may have heard that the California Fair Plan, offered through the state, is the insurer of last resort (as in “you can always get insurance through the Fair Plan.”) You need to know it is relatively expensive and coverage is limited to fire hazard only, so you must purchase supplemental insurance for things like liability. Plus, the upper limit of hazard coverage is $3m. Yet even the Fair Plan doesn’t cover properties that affected by the issues cited above.
This is complex and evolving, and your own situation is unique. If you have questions or concerns, or want to know more, please reach out to me. I can help you think through your scenario and I can refer you to excellent insurance professionals to audit your situation, advise you about your next move, and help you obtain adequate insurance.
Photo Credit: Thom Milkovic
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