Farmers Insurance dropped coverage on more than 1,000 condo owners in San Diego due to wildfire risk.
SAN DIEGO — CBS 8 is Working For You to find solutions to the condominium insurance crisis in California.
In recent months, more than 1,000 condo owners in San Diego have had their property insurance policies not renewed by Farmers Insurance due to wildfire risk.
Janet Ruiz is the Director of Strategic Communication for the Insurance Information Institute, a nonprofit trade group that educates the public on behalf of the insurance industry.
“We want to be able to insure communities, homeowners, condos in California. This is our goal,” said Ruiz.
Ruiz is quick to point out why insurance companies are not renewing policies on large condo complexes.
“Inflation has really driven up the cost of building,” she said. “Since 2017, we’ve seen a huge increase in the numbers of wildfires and the losses from wildfires.”
When it comes to solving the condo insurance crisis in California, Ruiz mainly talks about wildfire mitigation, like clearing brush and hardening homes.
“The insurance companies are going to do better with condo associations as they do more mitigation, so they are more resistant to wildfire,” Ruiz said.
The insurance industry is not too keen on solutions that include state-run insurance programs, like Florida’s Citizens Property Insurance, or California’s Fair Plan that provides fire insurance as a policy of last resort.
“A short term solution could be the California Fair Plan, but it’s really not set up for that. It’s not the best solution,” Ruiz said.
But future solutions are coming, Ruiz said. Beginning in April, the state will start looking at lower insurance rates as a reward for fire mitigation.
“So the California Department of Insurance has asked all the admitted insurance companies to file new rating structures that would include discounts for home hardening, and community wildfire resilience,” said Ruiz.
“After the changes go through with the Department of Insurance, there will be more insurance available to condo associations, condo owners, and the insurance market will be in a much better place,” Ruiz predicted.
A spokesperson for California Department of Insurance emailed CBS 8 saying, “The Department of Insurance is doing our due diligence to help protect the residents of homeowners associations now and for the future. We expect to have more to announce on this soon.”
No ETA on when the department’s announcement might be made.
At CBS 8, we are always Working for You and our San Diego community. If there is something you would like us to investigate, please share your idea here or email us at firstname.lastname@example.org.
WATCH RELATED: Farmers cancels insurance for 115 homeowners in Scripps Ranch (Feb. 2023).
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.