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Wildfire Insurance

It’s a complex issue, and one that is continuing to change in an ongoing manner.

For many homeowners in Southern California and across the State, securing appropriate and reasonably priced fire insurance is problematic. Multiple insurance carriers have either fled the State entirely, or are no longer underwriting new business. For people living in the Wildland Urban Interface, that creates tremendous financial hardship and added stress related to wildfires.

Whose fault is it?

The California FAIR Plan

The California FAIR Plan is mandated by the state to provide the most basic form of home insurance coverage to high-risk homeowners (who’ve been denied coverage by mainstream carriers). The program is funded by a group of insurance carriers – and should be considered a “temporary safety net” that will at some point be replaced by mainstream insurance carriers.

Currently, the FAIR Plan limits coverage to $3 million dollars for “dwelling coverage” against the following: 

Fire

Smoke

Lightning

Internal explosion

The basic FAIR Plan does not provide coverage for most other threats, including:

You can in some cases purchase additional coverage under the FAIR Plan, often at considerable cost. Some of these add-ons include:

Covers your home from the following threats not included in the basic policy, including wind or windstorms, hail, explosions, falling aircraft, volcanic eruptions, riot or civil commotions.

Insures your home at its replacement cost, which doesn't include depreciation.

Covers damage to additional structures on your property, such as a detached garage, shed, or guest house.

Covers your personal belongings from the following perils not included in the basic policy, including wind or windstorms, hail, explosions, riot or civil commotions, falling aircrafts, and volcanic eruptions.

Covers your home and property from vandalism or malicious mischief.

Insures your belongings at their replacement cost, which doesn't include depreciation.

Automatically increases the replacement cost of your home to account for a rise in construction, material, and labor costs due to inflation

Covers any mandatory structural upgrades that adhere to local building ordinances.

Protects your home and property from earthquakes through a separate earthquake insurance policy purchased through the California Earthquake Authority (CEA).

Available for condo owners, this covers damage to improvements or alterations in your condo unit.

Pays for lost rental income when a covered loss prevents you from renting out your home or unit.

Covers debris removal and property cleanup after a disaster.

Pays for damage to fences on your property.

Pays up to $250 in coverage per damaged plant or tree.

Covers damage to awnings or signs on your property.

Covers damage to outdoor electronic equipment, including security cameras.

Covers damage to business property.

No liability coverage

For coverage that relates to liability, medical payments coverage, or theft, you’ll have to purchase a separate policy, often referred to as a “wraparound” or “difference in conditions (DIC) policy.

Who is eligible for the FAIR Plan?

If you’re interested in the California FAIR Plan, there are some hoops to jump through. The first is proving that you’re unable to find coverage through a mainstream insurance company. 

After you’ve done that, there are some additional criteria your home and property must satisfy, including:
  • In good condition (related to the real estate market)
  • Not boarded up (or otherwise abandoned)
  • Properly secured with all doors and windows locked
  • No broken windows or skylights
  • Has not been vacant for more than a year
  • Isn’t used for illegal activity

California Fair Plan Discounts

On August 23, 2023, the California FAIR Plan announced a new opportunity for homeowners to qualify for discounts to their FAIR Plan policies. The new discounts are designed to provide some peace of mind to policyholders.

The discounts are broken into two groups, and the percentage of discount will depend on how many things a homeowner can demonstrate to have completed reducing risk to either property or structures – or both. This includes HOME HARDENING and DEFENSIBLE SPACE.

Some of the items that can assist you in qualifying for discounts include:

California Fair Plan Discounts

On August 23, 2023, the California FAIR Plan announced a new opportunity for homeowners to qualify for discounts to their FAIR Plan policies. The new discounts are designed to provide some peace of mind to policyholders.

The discounts are broken into two groups, and the percentage of discount will depend on how many things a homeowner can demonstrate to have completed reducing risk to either property or structures – or both. This includes HOME HARDENING and DEFENSIBLE SPACE.

Some of the items that can assist you in qualifying for discounts include:

Defensible Space Protection

  • Cleared vegetation and debris from under decks
  • Removal of combustible shed and other outbuildings from the immediate surroundings of the home, to at least a distance of 30 feet (see Zone 1 in our Defensible Space description)
  • Trimming trees, removal of brush and debris from yard, and compliance with state law and local ordinances – specifically the LAFD or LAcoFD Brush Fire Code

Home Hardening Protection

  • Class-A Fire rated roof
  • Maintaining a 5-foot ember-resistant zone around a home (including fencing within 5 feet) – this is referred to as Zone 0 in our Defensible Space instructions
  • Noncombustible 6 inches at the bottom of exterior walls
  • Ember and fire-resistant vents
  • Upgraded windows (Double paned or added shutters)
  • Enclosed eaves

You don’t need to do all of these things to potentially qualify for discounts via the FAIR Plan, or from other insurance providers. We understand that some of these modifications could be extremely expensive. MySafe:Riverside wants you to know that completing even some of the least expensive upgrades (e.g. ensuring all of your home vents are protected by 1/8th inch mesh) could help you qualify for insurance discounts. MySafe:Riverside can help! If you have questions, or need your home inspected, don’t hesitate to give us a call.

How to apply?

Currently, for most people living in the Wildland Urban Interface, the California FAIR Plan is a good option if you’ve been denied traditional fire insurance coverage. Insurance companies are investing significantly in learning more about risk, climate change, and how to help homeowners quality for traditional policies, but it may be years before these carriers return to California.

If you’re interested in finding wildfire insurance for your structure, the FAIR Plan may be your best bet.

Need to register? Start here!

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