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Feb

2024

Navigating Homeowners’ Insurance Challenges in California’s Wildfire Zones

Living in California offers stunning landscapes, diverse communities, and a lifestyle that many dream of. However, along with its beauty comes the reality of wildfires, a persistent threat that has intensified in recent years. For Californians, securing adequate homeowners’ insurance coverage in wildfire-prone areas has become increasingly challenging. Let’s talk about some strategies to navigate the quest for coverage.

WHAT IS THE REAL CHALLENGE?
A recent article in Realtor Magazine sheds light on the uphill battle many Californians face when seeking homeowners’ insurance coverage. Insurers, grappling with the heightened risk of wildfires, are reassessing their exposure and, in some cases, pulling out of high-risk areas altogether. This shift has left homeowners in these regions scrambling to find affordable coverage or facing steep premium increases.

PROACTIVE RISK MANAGEMENT
While insurers are tightening their underwriting standards, homeowners can take proactive measures to mitigate fire risks and enhance their insurability. Maintaining defensible spaces around properties, using fire-resistant building materials, and implementing other fire prevention strategies can bolster a property’s resilience against wildfires. These efforts not only enhance safety but also make homes more attractive to insurers.

EXPLORING YOUR OPTIONS
For homeowners struggling to secure traditional coverage, alternative options like the California FAIR Plan and private market surplus lines insurers may provide a lifeline. The California FAIR Plan offers basic coverage for properties that have been denied by traditional insurers, albeit with limitations and potentially higher premiums. Private market surplus lines insurers, while often more expensive, may offer coverage tailored to specific needs or higher-risk properties.

COMMUNITY RESILIENCE
Beyond individual efforts, fostering community resilience is crucial in confronting the wildfire threat. Collaborative initiatives such as neighborhood wildfire preparedness plans, community-wide vegetation management efforts, and advocating for policy changes to improve wildfire resilience can strengthen the collective response to this shared challenge.

STAYING INFORMED AND ADVOCATING FOR CHANGE
As homeowners, staying informed about changes in the insurance landscape, advocating for policy reforms, and engaging with local stakeholders are essential steps in addressing the homeowners’ insurance crisis. By participating in community forums, supporting legislation that promotes wildfire resilience, and sharing experiences with fellow homeowners, individuals can contribute to shaping a more resilient future.

While the quest for homeowners’ insurance coverage in California’s wildfire zones may seem daunting, proactive risk management, exploration of alternative options, and community engagement can empower homeowners to navigate these challenges effectively. By working together and advocating for change, Californians can build stronger, more resilient communities that are better equipped to withstand the threat of wildfires.

Jul

2023

What is California’s FAIR Plan?

For California residents facing challenges in obtaining homeowners insurance due to various risk factors such as living in high-risk areas or having older properties, the California FAIR Plan (Fair Access to Insurance Requirements) offers a potential solution. The FAIR Plan is designed to provide basic fire insurance to high-risk homeowners who are unable to obtain coverage through preferred property insurers. It operates as a shared market where licensed insurance companies collaborate to share the risk of insuring California homeowners who do not qualify for voluntary coverage.

While the coverage offered by the FAIR Plan is more limited than a standard homeowners insurance policy, it still protects homeowners from shouldering the full cost of a loss out-of-pocket. The basic FAIR plan typically covers named perils such as fire, lightning, internal explosion, and smoke. However, additional coverage options can be added at an extra cost to provide a more comprehensive level of protection.

Eligibility for the California FAIR Plan is contingent upon meeting certain requirements. Applicants must own a single-family home, townhome, condo, or rental unit in California, and the property must fulfill specific building requirements. However, the FAIR Plan does not cover vacant homes that are unoccupied for 50% of the year, properties with existing unrepaired damages, or homes involved in illegal activities based on state and federal laws.

Regarding the cost, FAIR Plan premiums vary depending on several factors, including the property’s location, age, condition, proximity to a fire station, claims history, coverage types, and deductibles chosen. However, FAIR Plans are generally more expensive than standard home insurance policies. On average, California homeowners pay $1,428 for $250,000 in dwelling coverage, but with a FAIR Plan, homeowners should expect a higher rate.

To acquire a California FAIR Plan, homeowners need to go through a licensed insurance broker. The broker will first determine if the homeowner qualifies for preferred homeowners insurance coverage through the traditional marketplace before considering the FAIR Plan. Once the application is completed and approved, the first month’s premium must be paid to activate the coverage.

In response to increased wildfire risks, major insurance companies have stopped, canceled, or paused homeowners insurance policies in California. As a result, the demand for FAIR plan coverage has risen.

KEY FEATURES OF THE FAIR PLAN:

It’s a Last Resort Option:
The California FAIR Plan serves as an insurer of last resort for homeowners who are unable to obtain coverage through the private insurance market due to high-risk factors, such as living in areas prone to natural disasters like wildfires or earthquakes.

It Offers Very Basic Coverage:
The FAIR Plan provides basic property insurance coverage, usually focusing on named perils like fire, lightning, internal explosion, and smoke. However, the coverage is generally more limited than a standard homeowners insurance policy.

It Operates Though a Shared Market:
The FAIR Plan operates through a shared market system, where licensed insurance companies participate and share the risk of insuring high-risk homeowners who do not qualify for voluntary coverage.

You Can Purchase Additional Coverage Options:
While the FAIR Plan offers basic coverage, homeowners have the option to purchase add-on coverages at an additional cost to customize their policies and enhance protection.

It’s Designed for High-Risk Areas:
The plan is specifically designed for homeowners residing in high-risk areas where private insurers are hesitant to provide coverage due to the increased likelihood of potential claims.

Eligibility Requirements:
Homeowners must meet certain requirements to qualify for the FAIR Plan. The property must be a single-family home, townhome, condo, or rental unit in California, and the home must fulfill specific building requirements.

Higher Premiums and Deductibles:
FAIR Plan policies often come with higher premiums and deductibles compared to standard insurance policies due to the higher risks associated with the covered properties.

Association with California Earthquake Authority:
FAIR Plan customers can purchase a separate earthquake insurance policy through the California Earthquake Authority (CEA) if they desire additional earthquake coverage.

It’s essential to keep in mind that insurance policies and regulations can change over time, so for the most up-to-date and accurate information about the California FAIR Plan, it’s best to consult your agent.

May

2023

Allstate & State Farm Stop Writing New Property Coverage In California

Allstate, the state’s fourth-largest property and casualty insurance provider, and State Farm, the state’s largest provider, have stopped selling new home, condominium or commercial insurance policies in California. The insurance giants are the latest to say than they will no longer offer coverage in California, citing worsening climate and higher building costs that have made it harder to do business in the nation’s most-populous state. The moves by Allstate and State Farm may lead more home owners in the state to lean on the FAIR Plan, a state-offered “insurer of last resort” in high-risk fire areas.

California’s Department of Insurance says that the policy changes are related to factors “beyond our control, including climate change, reinsurance costs that have impacted the entire insurance industry, and global inflation.” Unfortunately, this issue is likely to spread to other carriers in much the same way as it has in the auto insurance market, so what do you need to know?

• Make your premium payments on time. There will no longer be a grace period for late payments and, more than likely, you will not be able to get the policy reinstated at the same price.
• Set your payments up on auto pay, with a few days cushion, to ensure there are no issues
• If your policy is already on auto pay, confirm that the payments are coming out of your account as expected.
• Expect your premium to increase with your renewal and know that there maybe a waiting period before your coverage goes into effect.
• Respond immediately to any requests from your insurance company, and call your agent if you have any questions or need clarification.

Dec

2022

Your End Of Year Financial Checklist

With 2022 drawing to a close, now is the perfect time to get your finances in order, maximize your tax savings, and make sure you’re on track to achieve your goals — professionally, personally, and financially. We’re here to help with an end-of-year checklist that will help you take care of all your financial housekeeping before the end of the year. While not everything on here will apply to you, it’s a good resource to make sure you haven’t forgotten anything important!

REVIEW OR UPDATE YOUR BENEFICIARY DESIGNATIONS
Make any needed updates to the beneficiary portion of your bank accounts, retirement accounts, life insurance policies, and annuities.
Have you gotten married or had a child within the last 12 months? Or perhaps a loved one has exited your life through a divorce or a death. Choosing a beneficiary for your life insurance policy is a decision you should consider carefully, it is especially important because beneficiaries trump who’s named in a will.

REVIEW YOUR TAX WITHHOLDINGS
Review your tax withholdings and payments. Big events in the last year — such as marriage, divorce, or having a child — are good reasons to adjust your withholding.
Check out the Tax Withholding Estimator from the IRS. It’s a handy tool for everyone — employees, retirees, and the self-employed — who wants to effectively tailor how much income tax to withhold.

MAX OUT YOUR RETIREMENT CONTRIBUTIONS
In 2022, you can sock away $20,500 ($22,500 for 2023) in your 401(k) or other employer-sponsored retirement plan, plus an extra $6,500 ($7,500 for 2023) in “catch-up” contributions if you’ll be at least age 50 this year.
If you freelance or are self-employed, your limits are even higher: up to $61,000 for 2022 ($66,000 for 2023) or 25% of your qualifying income, whichever is less, if you have a Simplified Employee Pension (SEP) Opens in new window plan IRA. If you don’t, there’s still time to set one up to take advantage of the tax benefits.

REVIEW YOUR INSURANCE NEEDS
Health insurance, life insurance, homeowners or renters insurance, auto insurance, and even the commercial insurance for your small business are all important to review annually. Have you grown your family this year? Bought a house? Started a business? The insurance coverage you had at the start of the year may not be enough for your needs in the new year. Make sure you have the coverage you need and that better pricing is not available. At Roman Insurance Services we will review all of your coverage with you, at no charge, whether or not you purchased your insurance through us. Email us to schedule a few minutes to discuss your coverage.

THINK ABOUT YOUR LEGACY GOALS
Estate planning isn’t only for the very old and very wealthy; there are things you can do at every stage of life to make sure your family’s hopes and dreams are realized.
Start with the basics:
• If you don’t have a will, draw one up. If you already have one, make sure it’s up to date.
• Consider naming a health care proxy to make medical decisions on your behalf if you aren’t able to make them for yourself.
• Think about a financial power of attorney—the authority to make financial decisions for you if you’re unable to do so.

CHECK ON YOUR EMERGENCY FUND
In an ideal world, you should three to six months’ worth of emergency savings set aside. However, most of us don’t live in an ideal world, which can make it difficult to handle everyday needs, much less unexpected surprises. However, it’s important that you don’t fall into the camp of the 56 percent of Americans who don’t have the cash to cover an unexpected $1,000 bill.

IF YOU HAVE KIDS, MAKE CONTRIBUTIONS TO THEIR COLLEGE FUNDS
Having a tax-advantaged strategy in place for your children’s college education can help you prepare for the rising costs. If you already have one, try to contribute as much as you can. If you aren’t sure how to best go about this, we’re here to help you understand the options and to choose something that will be a good fit for your specific situation.

MAKE CHARITABLE DONATIONS
The benefits are two-fold: You will reduce your taxable income and feel good about giving some of your hard-earned dollars to a good cause. It’s a win-win.

KEEP YOUR EYE ON THE FUTURE
The new year starts as quickly as the last one ends. So be sure to set some new goals and write them down. Do you want to create an estate plan or simply save some money for your teen’s braces? Are you hoping to take that trip abroad? Or you might be expecting some big changes that will affect your finances — such as having a baby or changing your career. Now’s the time to make sure you’re on track to make 2023 your best year yet.

Nov

2022

Winter Home Maintenance Tasks

As the days get shorter and the temperatures get colder, you may start to think of the upcoming holidays and snuggling up under a warm blanket at home. But before you start sipping hot cocoa, there are some projects around the house you may want to take care of first.

Here are some home maintenance tasks to consider completing before you settle in for the cold winter:

CHECK YOUR FURNACE
It’s a good idea to do some basic maintenance to help keep your heating system running smoothly through the winter. Check your furnace filter, and change it if it looks dirty, says ENERGY STAR. The filter should be replaced at least every three months. It’s also a good idea to have your furnace cleaned and checked by a professional annually, says ENERGY STAR.

INSPECT YOUR ROOF
The National Roofing Contractors Association recommends having your roof inspected twice a year to check for any signs of damage. Whether you inspect it yourself or hire a professional, spotting potential problems, like damaged or missing shingles, may help you avoid a bigger problem and potentially more expensive repairs down the road. That’s why it’s a good idea to make any necessary small repairs before the sleet, ice and snow of winter arrive.

FILL GAPS AROUND WINDOWS AND DOORS
Drafts around windows and doors can leave you feeling cold, and they could be wasting energy as your furnace works harder to warm that cool air. Angi recommends applying caulk around the window trim to seal off any drafts. Another option is to install weatherstripping around edges of doors and windows to create a tight seal, says Angie’s List. You can also make a simple door draft blocker to help keep heat from escaping under your door.

TEST THE SUMP PUMP
As water drains from under and around your home, your sump pump pushes it out of the house and away from the foundation. Have a professional inspect your sump pump each year to ensure it is working properly, says the International Association of Certified Home Inspectors. You can also consult your sump pump’s owner’s manual and perform some basic maintenance and regular testing yourself.

INSPECT YOUR CHIMNEY AND FIREPLACE
There’s something special about a warm fire on a cold winter’s night, but it’s important to get your chimneys, vents and fireplace cleaned first. The National Fire Protection Association recommends having a professional chimney sweep clean and inspect your fireplace and chimney. If you have a gas fireplace, your chimney and flue should be inspected for any blockages, says the Chimney Safety Institute of America. A professional will also inspect the gas lines and vents for leaks and can make necessary repairs.

CLEAN YOUR GUTTERS
Clogged gutters can lead to issues like water damage, loosened gutters, ice dams and issues with insects and rodents. Make sure your gutters and downspouts are cleared of leaves, sticks and other debris at least twice a year — whether you handle this chore yourself or call a professional.

STORE YOUR OUTDOOR FURNITURE
Winter can be hard on patio furniture. Wicker, plastic, resin and wood furniture should be cleaned (follow the manufacturer’s directions) and stored indoors for the winter, says HGTV. Teak and metal furniture can be stored outdoors year-round, although you’ll want to clean it appropriately to help protect it during the winter, says HGTV. Consider covering furniture to help protect it, and store cushions and patio umbrellas indoors.

TURN OFF OUTSIDE FAUCETS
In cold weather, water in exterior pipes can freeze and cause pipes to burst. So, before the temperatures dip, disconnect garden hoses from outdoor faucets. If your exterior faucets have shutoff valves, The Family Handyman recommends turning them off. Then, release any water remaining in the pipe by opening and closing the outside tap. You can also help protect exterior faucets with an insulated cover, says The Family Handyman.

^{Content courtesy of Allstate.}

Mar

2022

Show Your Home Some Love With These Spring Cleaning Tips!

It’s never too early to plan for spring cleaning!

Spring cleaning is the perfect time to check in with your insurance agent and make sure your coverage is up to date, while you’re at it see if you can save money by combining your home and auto policies.

Here are a few things inside and outside your home that should be inspected to determine if they are in good condition:

INSIDE YOUR HOME
Electrical Outlets and Cords: Check electrical outlets and cords throughout your home for any potential fire hazards such as frayed wires or loose-fitting plugs. Extension cords and power strips are not designed to be permanent fixtures and should only be used on an interim basis.

Fire Extinguishers: Check your fire extinguisher at least once yearly, including the hose, nozzle and other parts to determine if they are in good condition and that the pressure gauge is in the “green” range. Check the expiration date. If necessary, move your fire extinguisher to an accessible place so that you can get to it easily in an emergency.

Air Conditioning: Check around the unit for indications of leaks. Before turning it on for the season, have your air-conditioning system inspected and tuned up by a professional. Check the drain lines annually and clean them if they are clogged. Change the air filter.

Water Heater: Check for leaks and corrosion. Check your owner’s manual for any recommended maintenance.

Furnace or Boiler: Have your furnace or boiler cleaned or inspected annually.

Under Sinks and Around Toilets: Look for any signs of leaks or corrosion on pipes, supply lines and fixtures.

Plumbing: Check exposed pipes and valves in your basement or crawl spaces, if safely accessible, for signs of leaking or corrosion.

Appliances: Check supply lines for washing machines, ice makers and water dispensers, refrigerators, and dishwashers for signs of leaks or wear and tear.

Plumbing for Hose Spigots and Irrigation Systems: After opening valves for outdoor water supplies, be sure to inspect components for leaks. Don’t forget to check inside plumbing as well as outdoor spigots.

Dryers: Dryer lint can build up inside the vent pipe and collect around the duct. Clean both the clothes dryer exhaust duct and the space under the dryer. Use a brush to clean out the vent pipe. Look for lint buildup around the lint trap and clean it as needed.

Smoke Detectors: Daylight savings time is a good time to change the batteries in your smoke detectors. Inspect each smoke detector to determine if all are in working order, and make sure to test them monthly. Ideally, there should be at least one smoke detector on each floor of your home, including outside of each bedroom, and one within each bedroom itself.

Light bulbs: Check each light bulb in every fixture for the correct recommended wattage and replace any burned out bulbs.

OUTSIDE YOUR HOME
Roof: Check for any damage from snow or ice, and make any necessary repairs to reduce the possibility of leaks. If you have a skylight, check outside for a buildup of leaves and debris. Also, check the indoor ceiling for signs of leaks. Remember to put safety first any time you are on a roof. If you have any doubt, leave it to the professionals.

Gutters: Clean leaves and other debris from gutters and downspouts to keep water flowing and reduce the possibility of water damage.

Trees: Visually inspect trees for damage or rot, and remove (consider hiring a licensed professional) any dead trees that might blow over in heavy winds or during a storm. Keep healthy trees and bushes trimmed and away from utility wires.

Lawn Equipment: Make sure lawn mowers, tractors and other equipment are tuned up before using. Store oil and gas for lawn equipment and tools in a vented, locked area.

Walkways and Driveways: Repair any cracks and broken or uneven surfaces to provide a safer, level walking area.