Home insurance was already hard to get. Then came L.A.’s fires. Here’s what the data show, and what else to know. – San Diego Union-Tribune

San Diego's Home Insurance Crisis Deepens as Mitigation Efforts Fail to Sway Insurers

San Diego homeowners are finding themselves caught in an escalating insurance crisis, with even properties boasting extensive fire protection measures being denied coverage. The situation has prompted unprecedented action from county officials and is threatening to ripple through the local economy.

"It adds salt to the wound when you can't get insurance specifically for fire even when you've taken all these measures," says Bill Cavanaugh, a local general contractor who has seen multiple construction projects stalled due to insurance denials. These projects include homes equipped with new fire hydrants, sprinkler systems, and specialized venting - improvements that add tens of thousands of dollars to construction costs but no longer guarantee insurance coverage.

The crisis has grown dramatically in recent years. County data shows FAIR Plan policies - California's insurance of last resort - have nearly quadrupled from 9,670 in 2020 to over 37,300 in 2024. In rural areas, the situation is particularly dire, with some communities seeing up to 28% of policies non-renewed and over half of homes forced onto the FAIR Plan.

The impact extends beyond individual homeowners. "If you slow down the housing starts... the ripple effect is going to be devastating," Cavanaugh warns, pointing to potential impacts on contractors, suppliers, and even local restaurants that serve construction workers.

Older residents face particular challenges. "For older adults on fixed incomes, finding new coverage can be confusing, financially crippling, or even impossible," says Bob Prath from AARP. "It jeopardizes their ability to stay in their home and preserve their life savings."

In response, the San Diego County Board of Supervisors has unanimously passed a resolution opposing insurance companies' mass cancellations. Supervisor Terra Lawson-Remer, while acknowledging limited local control over the situation, describes the state's insurance system as "broken."

State regulators are attempting to address the crisis through new regulations that would allow insurers to use catastrophe modeling for setting rates while requiring them to maintain coverage in high-risk areas. However, these changes aren't expected to take effect until at least summer 2024, leaving many homeowners in limbo as negotiations between the state insurance commissioner and insurance companies continue through year's end.

Home insurance was already hard to get. Then came L.A.’s fires. Here’s what the data show, and what else to know. – San Diego Union-Tribune

The home insurance market in California is experiencing a crisis, exacerbated by recent destructive wildfires in Los Angeles and years of previous fire damage. Here are the main points:

Current Situation:
- Major insurers are pulling back on writing new policies and renewing existing ones
- Premiums have increased significantly as conventional coverage becomes scarcer
- In San Diego County, non-renewal rates peaked at 13% in 2021 but dropped to 10% by 2023
- Rural areas with higher fire risks are most affected, with some areas seeing non-renewal rates up to 28%

FAIR Plan (Last Resort Insurance):
- San Diego County's FAIR Plan policies nearly quadrupled from 9,670 in 2020 to over 37,300 in 2024
- Total exposure increased from $6.5 billion to $41.2 billion
- Rural communities are heavily reliant on FAIR Plans, with some areas having 50% or more of homes covered
- FAIR Plan provides limited coverage at higher prices and requires additional insurance for non-fire coverage

New State Strategy:
- New regulations allow insurers to use catastrophe modeling for setting rates
- Companies must write policies covering 85% of their market share in high-risk areas
- 19 San Diego County ZIP codes qualify as "distressed areas"
- Changes expected to improve insurance availability but not necessarily affordability
- Implementation could begin as early as summer 2024

Recommendations for Homeowners:
- Shop extensively using multiple brokers
- Document home improvements and fire mitigation efforts
- Consider higher deductibles to lower premiums
- Avoid making small claims to prevent non-renewal
- Look into qualifying improvements under the Safer from Wildfires program for discounts (4-40%) 

Denial Criteria

Based on the article, insurers are denying coverage based on several property characteristics. Let me break down the specific criteria mentioned:

Physical Property Features:
1. Age and condition of plumbing systems
2. Age and condition of electrical systems
3. Age of roof (the article mentions a 15-year-old roof needing replacement)
4. Proximity to hazardous vegetation (like the tall sycamore tree mentioned in the Blues' case)

Location-Based Factors:
1. Property location in high fire-risk zones
2. Rural areas with greater fire risks
3. Specific ZIP codes (the article mentions some carriers stopping new policies for entire ZIP codes)

Claims History:
- The article specifically notes that insurers "look closely at a property's claim history"
- They advise avoiding making small claims to reduce the risk of non-renewal

Notably, the article suggests these criteria have become stricter in recent years, with insurers becoming "increasingly skittish" about insuring:
- Older homes in general
- Condominium complexes
- Properties with previous water claims

The article indicates that this heightened scrutiny is largely a response to years of destructive wildfires, particularly the devastating fires in 2017 and 2018, including the Camp fire that destroyed 153,000 acres and claimed at least 85 lives. This has led to what the article describes as an industry in "crisis mode."

San Diego's Home Insurance Crisis Deepens as Mitigation Efforts Fail to Sway Insurers

San Diego homeowners are finding themselves caught in an escalating insurance crisis, with even properties boasting extensive fire protection measures being denied coverage. The situation has prompted unprecedented action from county officials and is threatening to ripple through the local economy.

"It adds salt to the wound when you can't get insurance specifically for fire even when you've taken all these measures," says Bill Cavanaugh, a local general contractor who has seen multiple construction projects stalled due to insurance denials. These projects include homes equipped with new fire hydrants, sprinkler systems, and specialized venting - improvements that add tens of thousands of dollars to construction costs but no longer guarantee insurance coverage.

The crisis has grown dramatically in recent years. County data shows FAIR Plan policies - California's insurance of last resort - have nearly quadrupled from 9,670 in 2020 to over 37,300 in 2024. In rural areas, the situation is particularly dire, with some communities seeing up to 28% of policies non-renewed and over half of homes forced onto the FAIR Plan.

The impact extends beyond individual homeowners. "If you slow down the housing starts... the ripple effect is going to be devastating," Cavanaugh warns, pointing to potential impacts on contractors, suppliers, and even local restaurants that serve construction workers.

Older residents face particular challenges. "For older adults on fixed incomes, finding new coverage can be confusing, financially crippling, or even impossible," says Bob Prath from AARP. "It jeopardizes their ability to stay in their home and preserve their life savings."

In response, the San Diego County Board of Supervisors has unanimously passed a resolution opposing insurance companies' mass cancellations. Supervisor Terra Lawson-Remer, while acknowledging limited local control over the situation, describes the state's insurance system as "broken."

State regulators are attempting to address the crisis through new regulations that would allow insurers to use catastrophe modeling for setting rates while requiring them to maintain coverage in high-risk areas. However, these changes aren't expected to take effect until at least summer 2024, leaving many homeowners in limbo as negotiations between the state insurance commissioner and insurance companies continue through year's end.