Bob Walsmith: Homeowner’s Guide/Wildfire Insurance

Since the Thomas Fire and debris return in 2017-18 the topic of homeowners insurance in the Santa Barbara / Montecito area has become a hot topic for people looking to get adequate insurance for their home.

“Is my home in a fire hazard zone,” and/or “Can I even get insurance on my new home that I love” are just a few of the many questions that potential homeowners in the area ask.

There is no easy answer, but there are some useful ideas that can make the process less difficult.

The first step for a potential homeowner is to contact a reputable Realtor in the area whenever they discover a home they are interested in. This is because the Realtor can contact insurance carriers to determine the type and cost of insurance that may be available, based on the location of the home and other important information.

The last thing a buyer wants to know before falling in love with a property is that the insurance will cost them $30,000 or more per year. It is better to know this sooner rather than later.

This is important not only in the houses located on the edge of the hills and mountains, but also in the lower part of the town. People are surprised when the house they enjoy catches fire even though it doesn’t seem like it would be dangerous. Roadhouses can vary in quality and price, depending on factors such as slope, vegetation, and more.

That’s why regardless of the location of the house in our area, learning the price and type of insurance should be the first thing after the interest of the house.

The next step is for the insurance agent to determine the type of policy that is right for the home.

Homeowners insurance is determined by law in California, regardless of where the home is located, etc. However, the cost of insurance and the services available can vary greatly.

There are three types of insurance companies in California.

The first is through an “official” company. These are companies like State Farm, Farmers, etc., which are known to many people. These companies are heavily regulated by the state of California and are required to pay what they can and cannot pay in relation to certain policies.

These companies also follow certain standards and are regularly evaluated for their ability to pay their debts. Most lenders require insurance to meet minimum standards and working with a licensed company can ensure that those standards are met.

Ratings for each company are public, so they can be easily checked by consumers. California mandates that a person try to get coverage from three approved providers before receiving coverage from these carriers.

In some cases, if the authorized carrier is unable to cover the accident due to a fire accident, you may need to look for insurance and California FAIR Plan. The California FAIR Plan was established as a “Fire Only” insurance policy designed for homes that they agreed the insurers would not cover. It was created as a stopgap measure to ensure that all buildings in the state can obtain fire insurance.

It is important to note that the California FAIR Plan is not a complete package by itself, it must be combined with Status Differences (DIC) or a related policy to cover other losses that homeowners may experience.

Finally, you may find that the above two may not be useful for some homes. When this happens, you can get more by working with an “illegal” or “Surplus Lines” company. These companies often have some types of unusual risks that are considered inappropriate by most insurers.

Non-accredited companies are not regulated by the government and should be seen as a last resort. Before a company that has not been approved can decide to take out a policy, it must obtain a signed form confirming that the property has been rejected by three or more carriers.

Non-accepted insurance is not legal Department of Insurance such as standard insurers, so they can often be expensive, they can also leave the government at any time, refusing to renew based on their reasonable levels.

Is this much? Absolutely! This is why you need to find a reliable insurance agent who can help guide you through the insurance process, can find solutions to problems when needed, and can help you, your trusted Realtor, and your lender when buying a home.

Bob Walsmith Jr. and the 2022 president of the Santa Barbara Association of Realtors (SBAOR). He is a California licensed real estate agent with Berkshire Hathaway HomeServices California Properties here in Santa Barbara. He has served and chaired several committees within SBAOR, and has been on its board of directors for the past five years. Bob can be reached at 805.720.5362 and [email protected]