In past week, there has been devastating wildfires in Northern California. This not only has burned many properties and an existential amount of land, this has affected our very own community members. Our thoughts are with all of our customers, friends and families that have been impacted by the devastation.
In light of the current fire tragedies we want to share some insurance resources regarding fire insurance coverage for property owners.
1. Admitted Insurance Carriers
We take customer’s information and actively submit it to many insurance carriers licensed in the state of California in an effort to place sufficient coverage and, ideally, keep the cost down.
These insurance carriers run a couple of reports to determine if a property is eligible for fire insurance coverage through their program.
The first report determines the protection class of the property. The protection class identifies items such as distance from fire station and distance from fire hydrant.
The next report is the fire line report. This report displays information based on the property location such as the distance to brush and whether or not the property is near large fuel sources as a potential risk.
When an insurance carrier inspects these reports and reviews other determining factors, they make a decision on whether or not they are willing to insure the property.
2. Non-Admitted Insurance Carriers
Non-admitted insurance carriers are insurance providers that have chosen not to follow the guidelines set forth by the California Department of Insurance (DOI). For example, their rates are not reviewed and approved by the DOI. Off the bat this may sound unacceptable, they serve an important purpose.
Since they do not file their rates with the DOI, they are able to be flexible in pricing for special risks like high fire danger. In instances where Admitted Insurance Carriers say “No”, these carriers are able to review the property, the exposure and then offer a total package and price for a policy. In many cases, this does not mean that they will be more “expensive”. The non-admitted carriers strive to be fair with pricing given the extra danger they are willing to insure.
Coverage may only be placed with a non-admitted insurance carrier after a diligent effort has been put in place to get the property insurance through an admitted carrier. It is also very important to educate the insurance purchaser of all of the details included when buying from a non-admitted insurance company.
3. California Fair Plan (CFP)
The California Fair Plan is a last resort fire insurance provider when all other options have been exhausted. They guarantee insurance coverage for fire risk is as long as the property is in accordance with other underwriting requirements such as keeping the property in good condition.
The policy provided by the CFP is only basic property coverage with many limitations and is often written with a second companion policy to “fill in the gaps”.
To obtain insurance through CFP, you must go through an authorized broker. We are an insurance broker for the CFP and can help you obtain the coverage.
We also have many options to write a companion insurance policy with the CFP to ensure properties are covered in the most comprehensive way possible. A stand alone policy from the CFP is acceptable for most mortgage companies as evidence of insurance.
We can help!
Don’t be discouraged if you have been denied coverage, non-renewed or cancelled by your current insurance provider. We have the resources and knowledge to help you get insurance for your property.
Our agency is highly trained and familiarized with options for fire insurance coverage and we highly recommend reaching out to us for any fire insurance questions. Leave a comment below with your questions or thoughts and we will be happy to respond!