The shrubs across the street nearly cost him his home insurance

It’s not yet common, but in high-risk fire neighborhoods, Berkeley Hills residents may find that keeping their home insurance depends on how well their neighbors prune their property.

At the end of August, wildfire prevention advocate Dan Grassetti opened a letter from Allstate, his home’s insurer, with some alarming (and just a little ironic) news. His policy wouldn’t be renewed because of a fire hazard.

The surprising part: The hazard wasn’t on his property but in the lot across the street.

Grassetti, the founder of the Hills Conservation Network, a vocal wildfire prevention organization, said he has always managed the vegetation on his Alvarado Road property to meet prevention standards — cutting brush and grass, trimming trees. The network is controversial for its stand against removing trees, including Eucalyptus, but supports other types of vegetation thinning. In early summer, Grassetti’s property passed the city of Oakland’s annual wildfire inspection.

His house sits in a state-designated high-risk fire zone perched above Claremont Canyon. It survived the 1991 Oakland firestorm by a few doors.

The Allstate non-renewal notice was jarring, Grassetti said, and he was struck by this line in the letter: “A fire hazard exists because of overgrowth of brush on or next to your property.” Phone calls with his agent confirmed the concern was with the vacant lot across the street from his house, and not his land, he said.

He appealed the decision right away, claiming he wasn’t responsible for his neighbor’s property. And last week, the company reversed course, Grassetti said. He’s waiting for a renewal letter, but all he’s been told by his broker so far is that a new inspector was sent to the site.

Rare but legal

This case is unusual but not unheard of in the Bay Area, wildland fire insurance experts say, noting that each season of destructive fires puts those navigating coverage on shakier terrain.

Insurance woe stories from the East Bay’s high-risk wildland fire areas are increasingly common. For property owners in these neighborhoods, it’s harder and harder to get insurance, which, if even available, is expensive and often watered down. For insurance companies, it’s harder and harder to take on the financial risks of wildfire coverage as once-rare disasters become routine.

In some areas of the state, entire ZIP codes are rejected by home insurers for high fire risks. Grassetti’s insurance roller-coaster ride is yet more sign of this turbulence, experts say.

“I don’t know if Allstate is trying to move away from this market as a whole or had an issue with my house in particular, but the photos of the problem they took had nothing to do with my house in particular,” Grassetti said on Sept. 2. “According to a Farmers agent I spoke with yesterday, all the insurers are moving away from insuring houses in ‘high fire risk’ zones.”

Basing a policy on the conditions of a neighboring property is rare but legal, said Joel Laucher, a consultant with nonprofit advocacy group United Policy Holders and a former chief deputy insurance commissioner for the state.

“Of course you can’t make a person clear land they don’t own,” Laucher said. “[Insurance companies] can’t tell [you that] you need to clear land that your neighbor owns, but they can say there needs to be no brush risk within a certain number of feet of your home.”

Brush across the street

Peggy Smith, Grassetti’s Berkeley-based Allstate broker, said she can’t comment on any individual policy. She confirmed she’s in contact with Grassetti. “This is something I’m working on with the inspectors,” she said in a conversation with Berkeleyside before Grassetti learned the non-renewal was reversed.

When Grassetti received his non-renewal letter, it included a photo of the land across the street that Allstate said led to its initial decision to cut him off. The land didn’t meet the company’s 100-foot defensible space standards for his house, the letter said. Defensible space commonly refers to property around a home or structure that is cleared to minimize the spread of fire.

The picture shows a shrubby slope, uphill from Alvarado Road. According to Alameda County parcel maps, three contiguous parcels of open space are on this hillside, including the lot opposite Grassetti’s house. The parcels, located in Oakland, are owned by the same San Francisco entity, Y & H Company, according to property tax documents.

Michael Hunt, spokesperson for Oakland Fire Department’s wildfire inspection program, said all three of the parcels (48H-7652-25, 48H-7652-26,48H-7653-11) were inspected by the department in July and found out of compliance “for failure to adequately clear roadside vegetation.”

The lots were also noncompliant in 2020, Hunt said.

According to Oakland Fire Department requirements:

“Vegetation growing along the roadway should be pruned back. Ten feet is the recommended distance, though in some cases, less may be appropriate. Limbs that overhang the roadway and are less than 15 feet above the ground should be cut back to the roadway edge. Pruning vegetation along the roadway improves vehicle access, increases sight lines, and creates a fuel break that could help stop the spread of wildfire.”

As of last week, all but one of the lots “have since mitigated,” Hunt said. One lot has a pile of vegetation that needs removal for final compliance, he said. (Grassetti, however, said he hasn’t seen any signs of recent clearing or work on the property.)

Berkeleyside reached out to the Y & H Company for comment. One person reached by phone said he would pass on a reporter’s phone number to the person who owned the Oakland lots. No one from the company has called.

Different standards create blind spots

Residents of high-risk wildfire areas, which includes most of the East Bay hills, are at risk of fines, liens, or insurance non-renewals if they don’t meet the fire prevention standards of both their city (or county, for unincorporated areas) and their homeowner’s insurance.

While experts tend to agree on the importance of requiring people to mitigate fire risk on their property, conflicting or unclear requirements can pose challenges.

Fire agencies and insurance companies don’t share notes.

A property owner may be in compliance with his or her city, only to learn the insurance company wants something different, as Grassetti did.

Smith, Grassetti’s insurance broker, said she didn’t know how the Oakland Fire Department’s requirements compare with Allstate’s. Hunt, the Oakland Fire spokesperson, said the same. “I don’t know the specifics Allstate uses to approve or deny and it’s not necessarily based on our inspection protocol,” Hunt said.

Even more confusingly, different insurance companies have different regulations, so a property owner may be OK with their city and their insurance provider but putting a neighbor’s insurance coverage at risk, without knowing it.

“I’m sure it does create animosity,” Laucher said. “Ten years ago we might not have liked it, but it wouldn’t cause a non-renewal. Now it’s a much higher concern.”

However, he said, “generally speaking most insurance companies don’t necessarily get to this point with their insured.”

In California, it’s not easy for insurance companies to cancel a homeowner policy after it’s been in effect for at least 60 days, but they’re free to decide not to renew a policy with a required 45-day written notice.

One exception to this are temporary cancellation and non-renewal moratoriums enacted by the state for certain ZIP codes in or adjacent to fire disaster areas.

Insurance companies assign each property in high-risk fire zones a score based on a variety of factors including fuel load (vegetation that could burn) and slope — fires usually burn faster uphill. High-scoring properties are vulnerable to higher insurance costs, coverage refusals and non-renewals. The scores, usually calculated by speciality data companies, are private.

“They are allowed to put in place any standard as long as it is objective, risk-related, and applied consistently,” Laucher said.

His organization, United Policy Holders, is advocating for standardized evidence-based fire risk reduction measures statewide.

The organization is also encouraging neighboring residents to work together on wildfire safety measures collectively, such as by organizing Firewise communities, a risk-reduction program of the National Fire Protection Association.

The program’s main goal is neighborhood safety, but participation can also help lower insurance costs.

This is also the drumbeat of Oakland Firesafe Council, an education and advocacy group serving all of Alameda County, said Sue Piper, the council’s president. Piper is also a board member of United Policy Holders.

“You’ve got to organize your neighborhood; you’ve got to start thinking about defensible space,” Piper said, “You’re only as strong as your weakest link.”