By RHEA-FRANCES TETLEY
After repeated requests from local residents concerned over the massive numbers of mountain residents who have seen their homeowners’ insurance policies canceled in the past couple of years, California Insurance Commissioner Ricardo Lara came to the San Bernardino Board of Supervisors chamber on Dec. 18 to meet with a group of concerned residents and community leaders. Together, they discussed the changes he knows need to be made, while listening to suggestions and concerns of residents addressing homeowners’ insurance cancellations.
Just before the meeting, Lara added over 200,000 properties and numerous Zip Codes to a moratorium on insurance cancellations to last until Dec. 5, 2020. Zip Codes included in the year-long moratorium include Crestline 92325 and Cedarpines Park 92322, resulting from the Oct. 24 “Old Water Fire” in lower Waterman Canyon. Many other mountain zip codes, including 92382, 92352 and 92317, were added as a result of the Hillside Fire, which ignited on Oct. 31, also in lower Waterman Canyon. There are now 180 Zip Codes statewide under the moratorium affecting over one million California homes. If you have received a cancellation notice that is dated after Oct. 11, 2019, with a listed Zip Code, your insurance company is now required to offer renewal. This moratorium was made possible by former State Senator Lara’s 2018 Senate Bill 824, prior to being appointed insurance commissioner.
“I am calling on insurance companies to push the pause button on issuing non-renewals for one year to give breathing room to communities and homeowners while they adapt and mitigate risks and give the legislature time to work on additional lasting solutions,” Commissioner Lara said. He is also proposing to expand the California Fair Plan to make it comprehensive, including increasing coverage from $1.5 to $3 million dollars and eliminating the need for wrap-around policies, beginning in June 2020.
Several local residents spoke, including Rim school board trustee Jordan Zarate, who said, “Those invited today represent just a fraction of the dedicated community members in our mountains. Each person here wears a multitude of hats, each investing hundreds of hours a year to improving our community. Focusing only on fire mitigation tactics, preparation and capability of our response, here’s just a sampling of what we do.” He then listed dozens of agencies working together to mitigate fire danger.
Lara said mitigation efforts being undertaken by both residents and communities at this time are not even considered in the “fire score” zone ratings, which insurance companies use to base their rates and policy renewals. He wants to make the companies consider these mitigation efforts, as they do change the possibility of massive fire losses. Currently, there is no way for a homeowner to appeal a fire score, no matter how much mitigation has been performed.
Several real estate experts, including Carol Banner from Lake Arrowhead’s Coldwell Banker Sky Ridge Realty, expressed the need for a stable insurance market. Finding affordable comprehensive fire insurance has become difficult, resulting in real estate transactions becoming stalled or canceled. If this trend continues, Banner noted, it will disrupt local real estate markets and possibly cause property values to decline.
Local residents met, writing a “white paper” prior to the meeting, describing the scope of the problems the non-renewal of insurance has caused and its impact on communities. Some of the problems include increased insurance costs, raised rents and the impact on home sales.
The white paper lists over 12 efforts the communities have made to mitigate wildfire dangers, including an additional nine actions that Edison is currently undertaking to reduce equipment-ignited fires, plus the extensive firefighting services locally available.
The white paper requested Lara to consider offering incentive programs to the admitted insurance companies to lure them back to writing insurance for identified areas, and to change the fire score zone rating system. It questioned how the expanded California Fair Plan will fiscally respond to major incidents in the state. They suggested the commissioner request a roundtable/retreat among all insurers to see how insurance companies can address the future.
Local insurance broker/agent Michele Wimmer said, “It appears the long-term goal is to bring back fair coverage to our Zip Codes and amend the fire-line scores. The California Fair Plan will be expanding its coverage, beginning June 1, 2020.”
Crestline resident Rick Dinon concluded after the meeting, “The Commissioner’s presentation reflected an understanding of the disruption and economic stress the insurance crisis has inflicted upon our communities. The interim measures he recently instituted will be helpful. It is, however, a late reaction to an issue that was apparent a long time ago. I am disappointed I see no attempt to leverage market forces to incentivize insurance companies to re-enter the market instead of relying on the Fair Plan as a sole source of coverage.”
Lara said, “This wildfire insurance crisis has been years in the making, but it is an emergency we must deal with now if we are going to keep the California dream of home ownership from becoming the California nightmare, as an increasing number of homeowners struggle to find coverage.”