Lately, fire season in Southern California is non-stop. Since the drought began, we have exposure all year long. Summer's end, and the beginning of the new year when the Santa Ana's blow, are times when fire danger is particularly high.
Living in a neighborhood surrounded by nature and brush is obviously much more hazardous than city dwelling. Even if insurance is not on the mind of a homeowner who lives in the Santa Monica Mountains, when that homeowner decides to sell, their Realtor should prepare options for the buyer's coverage. The drought has some insurance carriers phasing out of California. The carrier that holds the existing policy may decline to renew that same policy for the next owner.
Fortunately, there are many alternatives. California FAIR Plan (FAIR = Fair Access to Insurance Requirements) is one option; this is a State run carrier that insures for fire, wind and vandalism. The FAIR Plan will cover the dwelling, separate structures, personal property, loss of use and building code upgrades. The FAIR Plan limits coverage to an aggregate 1.5 million. A companion policy called a DIC (Difference In Conditions) policy covers gaps in the FAIR Plan policy such as theft, liability, and broken interior water pipes. For many homeowners the 1.5 million aggregate coverage that the FAIR Plan covers isn’t enough. In that case, there are carriers that will still write a traditional, albeit expensive, policy on a home located in a brush area.
It’s important to talk with an agent who has experience with brush area coverage and knows which carriers will be a good fit. For an older home, due to building code changes, there are increased costs to rebuild - an endorsement will cover the increase. Loss of use is another coverage to consider - this pays for the cost of temporary housing while a home is being rebuilt. Rural communities have large lots where accessory structures are found. Rebuild costs can exceed standard coverage limits if multiple structures are lost at the same time. An increase in coverage adds a layer of safety for a property with a barn and guest house, for instance.
There are many moving parts to a home policy. Bart Baker, a multi-line insurance agent who specializes writing policies in brush areas, has a great checklist for anyone wanting to evaluate proper coverage. See it by clicking here, or email@example.com.