A large gathering of individuals formed a line outside the Crown Valley Community Center in Laguna Niguel on a warm Thursday afternoon. Some were turned away once the room reached maximum capacity.
The residents of this Orange County area had experienced the devastating Coastal Fire that tore through the Coronado Pointe community last year, resulting in evacuations and the destruction of 20 homes.
Given the increasing difficulty for California homeowners in high-risk areas to obtain insurance, Senator Catherine Blakespear, representing Laguna Niguel, organized a wildfire insurance town hall on August 11th. The town hall featured Insurance Commissioner Ricardo Lara, who provided information on how wildfire preparedness can impact insurance coverage.
“Your significant presence here today speaks volumes,” remarked Laguna Niguel Councilmember Stephanie Oddo to the audience. “This is a pressing issue in our community and region.”
In response to a series of destructive and deadly fires in 2017 and 2018, insurance companies have ceased coverage for tens of thousands of California homeowners by withdrawing from high fire-risk areas. This has forced many homeowners to purchase policies through the more expensive California FAIR Plan, the state’s insurer of last resort.
Commissioner Lara noted, “Premiums have risen as a result. While statewide premiums are still lower compared to states like Texas and Florida, they have become unaffordable due to increased risk.”
In Orange County alone, the number of FAIR Plan policies has nearly doubled from 2,500 in 2017 to 4,600 in 2021, according to Lara.
“The FAIR Plan has become the primary choice rather than the last option in certain areas,” Lara stated. “This needs to change.”
He emphasized the importance of reducing risk to address the issue, saying, “This is where we have the power and control.”
Lara highlighted the Safer From Wildfires initiative, a 10-step plan that enables homeowners to safeguard their properties. By implementing these steps, homeowners can qualify for insurance discounts offered by participating providers.
Some of the recommended actions include installing fire-rated roofs, ember and fire-resistant vents, enclosed eaves, clearing vegetation and debris from under decks, and upgrading windows to be multi-paned.
“Each of these actions qualifies you for a discount, reducing insurance costs and ensuring coverage,” explained Michael Soller, California’s Department of Insurance spokesperson.
Senator Blakespear shared that her office has been inundated with concerns about skyrocketing insurance costs since she took office. Premiums have been rising by hundreds of dollars each month.
Blakespear recounted a recent meeting with a realtor who revealed that two deals fell through because the buyers couldn’t obtain insurance. The unexpected additional cost of approximately $1,000 for insurance alone caught them off guard.
Furthermore, the insurance situation has influenced how properties are changing hands due to affordability issues.
One Laguna Niguel homeowner, Ali Esmaili, received an email from his lender, Wells Fargo, stating that his fire insurance did not meet certain criteria. He explained, “We’re located next to the canyon and have encountered difficulties with various insurance companies. The ones that do offer insurance have exorbitant premiums, making it unaffordable for us.”
Senator Blakespear called for immediate collaboration among legislators to address these concerns before the Santa Ana winds pick up in October and November.
She emphasized, “Insurance is a necessity, not an option. It’s essential for managing risk and qualifying for a mortgage.”
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