HomeHome InsuranceWhy are home insurance premiums going up? – NBC Bay Area

Why are home insurance premiums going up? – NBC Bay Area

A South Bay family recently saw the insurance premium on one of their homes double, even though the property is not in a high-fire area.

The significant jump comes as insurance companies cancel polices and hike rates across the country — largely citing fire concerns.

“I was dumbfounded,” homeowner Pamela Tremain said. “Because our annual premium absolutely doubled.”

Tremain’s premium jumped from $9,000 a year to $18,000. The insurance is for the family’s second home in Amador County.

A confused Tremain contacted Famers Insurance and was told the increased premium cost is due to California’s inflation.

NBC Bay Area reached out to Farmers Insurance and did not hear back.

Robert Chapman Wood, an economics professor at San Jose State University, said the insurance market instability is driving the large premium increases.

“Right now the insurance companies are sort of in a panic,” Wood said. “And they’re grabbing whatever they can.”

Wood said all Californians are paying for the devastating wildfires that have scorched the state, whether they live in a fire zone or not.

Add the growing number of companies dropping policies altogether, we get a situation where families feel like they have no choice but to pay.

“So that’s the problem,” Wood said. “Six years ago if you didn’t like your insurance rates, you go to another insurance company.”

Wood said the insurance market is like the oil and gas market right now with prices fluctuating wildly based on supply and demand.

There’s new hope for California homeowners facing rising insurance costs: Lawmakers are considering a new bill to boost protections. Bob Redell reports.

Tremain said she is one of the lucky ones who found another option. She called AAA Insurance, which covers her cars and primary home in Willow Glen. Her new premium with AAA is less than $7,000 a year for the same home.

“It worked out,” Tremain said. “But it’s kind of disheartening. You want to be able to trust your company.”

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