Marin homeowners rattled as insurers bail over fire risks

When Larkspur resident Anita Bock heard that her insurer, State Farm, stopped writing new policies in California, she immediately called her agent to ask if she would lose her coverage — again.

“He said that at this point in time, there’s no indication that’s going to happen,” said Bock, who lives on Christmas Tree Hill. “So all we can do is hope. Of course, if there are a significant number of fires this season, then who knows what will happen in the future.”

The insurance giant, along with Allstate, recently joined a small but growing group of homeowners insurance providers in the state walking away from new business because of the increased risk of catastrophes, inflation costs and a challenging reinsurance market.

Insurers say California’s unusual regulatory structure — with an elected insurance commissioner and a 1988 ballot measure, Proposition 103, that rolled back rates and requires insurers to get state approval for increases — has kept prices too low, spawning a growing crisis after recent wildfires.

The news of big insurers pulling out comes after years of struggle by homeowners attempting to find and keep a policy because of wildfire risk.

Those who cannot find a policy on the insurance market may apply for bare-bones, smoke-and-fire only coverage through California’s FAIR Plan, which the state’s insurers help fund to provide coverage for homeowners in high-risk areas. But total costs can be two or three times that of a typical homeowner policy, as the owner typically must also buy a “difference in conditions” policy to cover other risks like water damage.

The number of California FAIR plan policies has nearly doubled since 2018, and now accounts for 3% of the total.

In Marin, one in 15 homes is in a “very high” wildfire hazard zone. The county ranks third in the state for homes at increased risk of wildfire damage in the next 30 years. Corte Madera and Larkspur, which share the Christmas Tree Hill neighborhood, face serious fire risk.

Bock, a county resident since 2002, said her previous insurance with Northwestern Mutual was canceled several years ago because of fire risk. She knew many members of her neighborhood also were dropped, so she recommended State Farm to them.

“It’s obviously a huge concern for us,” she said of living in the high risk zone.

Amy Bach, executive director of the San Francisco nonprofit United Policyholders, said she is seeing replacement coverage doubling or tripling canceled premiums.

More people are turning to coverage provided by the California FAIR Plan Association, which pools providers to offer basic policies to the uninsurable, or going without coverage. While she wants to see insurers come around and reward risk reduction, she’s also a realist.

“I think we are going to see higher rates,” she said. “The question is how high can people handle.”

Larkspur resident Peter Mazonas moved to the FAIR plan after being canceled by CNA insurance more than 20 years ago.

“It’s basically no insurance for a lot of money,” he said.

He was eventually able to get insurance with Allstate, but has seen his premium steadily increase between 10% and 15% in recent years. Mazonas is the coordinator for the neighborhood response group in Madrone Canyon, a FireWise community that includes about 400 homes that have all had fire inspections, and said insurance has become a recurring question, and a serious concern, in his community.

“None of this is a surprise,” said the nearly 50-year resident, who said the possibility of being dropped “is always in the back of our mind, but we’re doing everything we can do.”

Bach said a main issue is that insurance companies want to see fire prevention methods work before they believe it. She hopes that companies will give discounts to homeowners and communities that are taking action and feels that, up until State Farm’s decision, momentum was shifting in the right direction.

“We all agree on the things that will move the needle,” Bach said. “So now we’re like, let’s get insurers on the same wavelength with us.”

State regulations passed last year require insurers to give discounts for preventative steps taken at the neighborhood and individual homeowner level.

Christmas Tree Hill also is certified FireWise, the national program that helps communities prepare for and reduce fire risk. Bock sits on the FireWise board, as well as the neighborhood response group. The group helps inform people on how to comply with defensible space laws, types of vegetation that are hazardous, and when events are planned, such as free “chipper days” to rid properties of excess vegetation.

For her, the insurance news is even more reason to prevent fire risk in and around the home.

“I think we’ve done a very good job of making our community aware of what needs to be done in order to prepare for fire,” Bock said.

Rich Shortall, executive officer at Fire Safe Marin, said he believes Marin is a leader in wildfire prevention and awareness. Fire Safe Marin is a nonprofit organization that aims to reduce fire hazards and promote preparedness.

Shortall said that while individual action is important, community strength is essential because insurance agencies look at community risk as a whole and not as individual homes.

“They’re looking big-picture,” he said. “You may have perfectly prepared your home, but if your neighbors didn’t, your risk is reduced but maybe it’s not as helpful as we may hope.”

In a survey done through the Marin Wildfire Prevention Authority, about 50,000 homes out of about 112,000 around the county reported having home evaluations done. These inspections generate a report with actions to take for better wildfire preparedness.

“I’m hoping programs like this will have a positive impact for insurance companies,” Shortall said.

Novato fire Chief Bill Tyler said a major goal of his is to do fire risk assessments on 100% of homes in Novato within three years, and said his agency very close to completing that goal. He said education is essential.

“There’s a lot of information out there that definitively shows that if you take these steps, it will dramatically reduce the likelihood of your home catching fire,” Tyler said. “All of this prevention and risk reduction begins with education of the homeowner.”

Some examples of fire risk reduction steps include making sure a home has defensible space, having landscaping that allows for horizontal and vertical space between all vegetation and avoiding highly flammable plants such as bamboo, juniper and Italian cypress.

Also key are updates to “harden” homes such as improving venting systems, replacing wood shake or shingle roofs and upgrading wooden decks and siding with ignition-resistant materials. Grant programs can help cover the costs of the changes.

Tyler said that while communities in Marin have been responding well to fire concerns by getting home assessments done, taking out grants and collaborating, he believes insurance companies’ decision to leave the marketplace will have huge impacts on both current and future Marin residents.

He highlighted the amount of work and energy everyone — the fire service, communities and residents — have put into preventing their homes and neighborhoods from burning down.

“What the individual does, then the neighbors, then the FireWise community getting the whole neighborhood together … the education … it’s all of those things working together in all of the communities in Marin that is really elevating the awareness and education that our public has, and we think that’s worth something,” Tyler said. “We are making a difference and we want insurance companies to recognize that.”

Bock said risk reduction at her home alone takes up a lot of time.

“It’s something you have to keep up all the time,” Bock said. “You don’t just wait for fire season because we know that it could happen at any time.”