Securing home owner's insurance in Carmel, Pebble Beach, Carmel Highlands and Carmel Valley has been a challenge for the last few years but given the insurer's reaction to the Mendocino Complex fire in Santa Rosa, the Soberanes fire in Big Sur, and the Camp fire in Paradise new home owners are facing a near crisis in securing fire insurance.
Insurance companies are raising rates on current customers, declining to take on new customers, and in some cases, retreating from the market. It is now imperative that a buyer begin the search for insurance the day an offer is accepted and be prepared to pay more than the current owner, possibly far more.
We work with our clients and several well respected local insurance brokers to generate quotes for insurance, but even with that effort we have clients with properties for which no insurance company will provide fire coverage.
When that happens, an option is to carve out the fire insurance component of homeowner's insurance and insure against fire using the "insurance of last resort" which is the California FAIR plan. The FAIR plan was established in 1968 after a series of brush fires made fire insurance difficult to secure in the state. We are seeing more policies written using the FAIR plan to secure fire insurance.
It is important to remember that the FAIR plan does not insure against theft, liability, water damage etc. For those risks you will need a companion policy from a traditional insurance company still willing to insure against other risks while excluding the fire insurance component which is provided by the FAIR plan.
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