Last month, my column touched on the difficulties that most Coronado homeowners are enduring when it comes to their current homeowners insurance policy renewals. This month, I’d like to elaborate on that and help provide a basic understanding of the new business insurance market and what Coronado residents might be up against when purchasing a new property.

As most of you have probably already figured out, the challenges experienced when attempting to obtain a new homeowners insurance policy reflect a broader trend across California’s insurance market. Despite our town’s non-existent wildfire risk and very low fire risk in general, homeowners are encountering significant hurdles when seeking coverage from preferred, admitted insurance carriers. These companies are scrutinizing many more factors than ever before to mitigate potential losses, leading to heightened difficulty in obtaining new policies. Along with the stringent criteria, they’re often seeking reasons to simply decline coverage. Examples of some of those factors include the age of a building’s roof, plumbing and electrical boxes, or the fact that it’s rented out during one or more of the summer months.

For homeowners unable to secure coverage through traditional insurers, who have also been declined by available non-admitted markets, the California FAIR Plan serves as an insurer of last resort. Designed to provide basic fire insurance coverage in the most fire-prone pockets of our state, the FAIR Plan has recently faced financial strains due to payouts on some of the most recent devastating wildfires. In response to these substantial claims, the plan recently levied $1 billion in assessments on private insurers to bolster its capacity to pay out claims. This means that each admitted insurance company in CA must pay their CA Property Insurance Market share % as part of that assessment. It’s no wonder these companies are trying to do whatever they can to reduce their property insurance footprint in this state.

In summary, Coronado residents must recognize that obtaining property insurance is no longer quick, straightforward, or cost-effective. Even in areas with low wildfire risk, other factors can render properties undesirable to insurers. Homeowners should be prepared for increased scrutiny and potentially higher premiums. It’s a sad reality right now, but it’s the reality.

VOL. 115, NO. 14 – April 2, 2025