Another fire season passed without a catastrophic event on the Coastside, yet some in the forested regions of San Mateo County report being dropped by their insurance companies due to the relatively high risk of liability.
Homeowners in places such as Kings Mountain, South Skyline, Woodside and other areas are banding together with neighbors to make their houses as fire-resistant as possible. That apparently hasn’t stopped insurance agencies from sending out nonrenewals without conducting any inspection.
These residents are facing fewer and more expensive options as a consequence. In San Mateo County, the California Department of Insurance has reported that more than 7,000 customers have received nonrenewal notices from their insurance companies from 2015 to 2018, although not all of these incidents are related to fire risk.
Woodside resident Bob Falkenberg’s homeowners policy with American International Group was due to renew on Sept. 1, but he was shocked when he received a nonrenewal.
“We have all sorts of fire protection,” he said. “... I was pretty surprised with AIG, especially after all these years, coming back and saying they were not going to renew.”
His broker could only find one other company that would insure his home, and, although he didn’t want to share how much the policy now costs, Falkenberg said it’s about one-third more expensive.
“If insurance rates go up, values go down,” Falkenberg said. “Property taxes go down. There’s all sorts of potential impacts for community disruption if this were to continue. Who’s going to want to buy a house if they hear what kind of insurance they have to pay and it’s kind of outrageous?”
Insurance broker Rob O’Neill, who spoke to a group of Kings Mountain homeowners last month, explained there are only three options when it comes to fire coverage. There are admitted carriers, nonadmitted carriers and the California FAIR Plan.
Admitted carriers are backed and regulated by the state Insurance Department. Nonadmitted carriers are not backed by state funds and often are more flexible and expensive. O’Neill explained these plans can run in the tens of thousands of dollars.
Pat O’Coffey, a certified Home Fire Protection inspector and president of the La Honda Fire Brigade, turned to a nonadmitted carrier. It now costs her $19,000 a year for homeowners insurance after Allstate sent a nonrenewal letter in June.
“We’ve done everything they’ve told us we need to do to protect our home,” O’Coffey said. Her efforts have included creating 100 to 300 feet of defensible space, fire-resistant roofing, sealed vents, and having 50,000 gallons of water available.
“Actually, if there was a wildland fire up here I think I’d be safer inside my home than I would be trying to evacuate,” she said. “I’m that confident in that ability to withstand a major wildland fire.”
The only other option is the FAIR Plan, which O’Coffey said didn’t provide enough coverage for her home. It only provides wildfire coverage, forcing homeowners to find supplemental plans for flood, theft and earthquake damage. O’Neill said there is also a $1.5 million coverage limit, which often isn’t enough. Next year, the limit will increase to $3 million. The California Department of Insurance reported that almost 260 new FAIR Plan policies have been created in the past four years.
“That will be a lifesaver,” he said. “There’s many homes in the Kings Mountain area that could go past $1.5 million in coverage.”
When Frances Mann-Craik received her nonrenewal letter from AAA for her South Skyline home in August, she explored using the California FAIR Plan. She said it would cost $8,000 a year for fire coverage alone, nearly 30 percent more than what she was paying.
Besides the logistical challenges of finding new coverage, she said she felt a “crushing betrayal” after being denied coverage from a company she’s been paying for 50 years.
“I was a member,” she said. “I was part of a family. They would take care of me when times get tough. Times got tough, and I was kicked to the road.”
Trouble finding insurance isn’t only a mountain phenomenon. El Granada resident Graham Wood received notice last fall from Nationwide he would need to make certain adjustments to his home to continue receiving coverage.
“It seemed to me that, although Nationwide refuses to confirm it, they were just deciding anywhere in California that was in a nonurban environment, anywhere that was near trees, they no longer wanted to insure,” he said.
Wood said he tried to ask Nationwide what needed to be fixed, but the company refused to give him photos of the problematic areas. He was also told he had to provide photographic evidence the problems had been resolved. Wood was able to find another insurer with some updates to his fire alarm system.
“You gotta jump through a few hoops,” he said. “… It just added inconvenience to the whole thing.”