C.A.R. is committed to helping members and consumers recover from wildfires and other natural disasters. We’ve prepared these materials to keep you and your clients informed about how to protect their homes, keep their insurance coverage, and find new coverage when necessary.
CA WILDFIRE/NATURAL DISASTER RESOURCES
Wildfires and other disasters have caused devastation in California, affecting homeowners, renters and real estate professionals alike. Use these materials C.A.R. prepared to help clients get relief and aid and learn ways to help protect their home. These materials can help clients learn how they might keep their insurance coverage or find new coverage if necessary.
For more resources, visit C.A.R.'s California Disaster Resources.
C.A.R. stands ready to assist REALTORS® who have been impacted by natural disasters. To access the Disaster Relief Fund, emergency funds and housing support, legal aid, and other resources, visit California Disaster Resources.
View and download the list of Wildfire Disaster Resources.
Register here for C.A.R.'s January 14 Legal Live Webinar about the recent wildfires in Southern California, or go to https://on.car.org/jan14live The recent wildfires in Southern California are a reminder that no matter where you live in the State, fire season seems to be all year long. C.A.R. attorneys will address issues such as the impact of wildfires on existing transactions, insurance coverage, cancellation rights and limits, price gouging, rebuilding and the tax consequences thereof, reminders about fire hardening and defensible space disclosure laws. The webinar will also provide you with a resource list for you and your clients, including how REALTORS® can get assistance from C.A.R.’s Disaster Relief Fund. Unfortunately, fire events happen. This webinar will help get you through those trying times, whether now or in the future.
Learn about California’s anti-price gouging laws as they pertain to rental housing, especially during emergencies like wildfires. This FAQ provides essential information for landlords, property managers, and real estate professionals to ensure compliance.
The Watch Duty app provides up-to-the-minute updates on local wildfires by county. Visit their website to download the app.
CAL FIRE has many useful resources for responding to and managing wildfires.
For Your Clients: These frequently asked questions can help you and your clients better understand the current homeowners insurance situation in California. Use this information in your marketing outreach such as newsletters, social media posts, emails, or however you keep your clients informed.
Homeowners Insurance Help FAQ
Q: State Farm and Allstate have announced they will no longer sell new home insurance policies in California because of wildfire risks and an increase in construction costs. What does this mean for prospective homebuyers?
A: In certain high-risk areas of the state, there are very few insurance companies willing to write new policies. In some, State Farm was the last private insurance company writing policies. In those areas, the generally more-costly California FAIR plan may end up being the only property insurance available.
Q: How does this decision impact existing State Farm and Allstate policyholders?
A: State Farm and Allstate will continue to service and renew policies of existing clients in the state and offer new auto insurance policies. However, they will not be issuing any new property insurance policies for the time being in California.
Q: What will happen if more companies follow State Farm’s and Allstate's moves?
A: There are still a wide range of companies writing policies in California. However, those willing to write new policies in higher risk areas are declining, and as stated above, with the departure of State Farm and Allstate, those in more high-risk areas may have no other option than the FAIR plan.
Q: What actions are being taken to improve the situation in the future? Any news regarding the Department of Insurance plans to encourage more carriers to write policies in California?
Many entities such as the nonprofit United Policyholders are maintaining regular dialogue with insurers to encourage them to recognize the value of wildfire risk reduction and resume insuring condos and homes located in the wildland-urban interface and suburban regions. The Department of Insurance also maintains dialogue with insurers on a regular basis and is consistently working to improve California FAIR Plan options.
Q: What is the California FAIR Plan and what options does it offer?
A: The California Fair Access to Insurance Requirements (FAIR) Plan provides basic fire insurance coverage for properties in high-risk areas as a “last resort” option when traditional insurance coverage is not available. A FAIR Plan policy offers protection from risk of fire and will satisfy a mortgage company’s requirement that your home be insured, but it doesn’t cover theft, flood, earthquake, hail, vandalism, or personal liability.
Q: What is the difference between admitted and non-admitted insurance companies? Should consumers consider non-admitted carriers?
When referring to insurers, the terms “admitted” or “non-admitted” indicate whether those companies are either fully or lightly regulated by the state’s insurance regulating agency. Many unfamiliar home insurers are non-admitted but may serve as a suitable coverage option, especially in areas where more well-known coverage options aren’t available. A good insurance broker can help inform you on whether a non-admitted carrier has the financial backing necessary to provide adequate coverage. You can also visit AM Best Rating Service to check the financial strength of an unknown brand.
Q: Should homeowners expect to pay higher premiums if fewer insurance companies are willing to write new policies?
Several factors have led to today’s challenging insurance market, which has, particularly in some areas of the state, contributed to higher premiums. The best way to avoid paying higher rates is to seek out a proactive, consumer-oriented agent or broker to help educate you on your options.
Q: Is it necessary to use an insurance agent or broker when shopping for home insurance? If so, how do I choose a good one?
A: If you’re insuring a home, business, or anything that’s unique, it’s generally advisable to find a good agent or broker to help you choose the right coverage. In assessing your options, make sure to seek out personal recommendations, online reviews, and obtain background information about licensed professionals via the California Department of Insurance website, which keeps track of registered insurance companies, agents, and brokers doing business in the state. For more help finding a broker, visit the United Policyholder’s online guidance, try the Department of Insurance’s Home Insurance Finder, or use the FAIR Plan’s Find a Broker tool.
Q: What questions should I ask when shopping for home insurance?
A: Asking good questions, trusting your instincts, and checking license statuses will help you avoid being scammed or overpaying for insurance. Some suggestions to ask when working with a broker or agent:
How long have you been in business?
Are you a “captive” agent, meaning that you exclusively represent one company? If not, how many companies do you represent?
If I cancel the policy mid-term, will there be an “earned minimum” premium?
If I have a loss and need to file a claim, how will you assist me?
Is there a broker fee plus a commission, and if so, how much will the commission and fee be?
Q: What resources are available for homeowners in the event their insurance provider non-renews them?
A: If you are one of the many Californians whose insurance company has notified them they will not be renewing a policy on their home, don’t panic. First, your insurer must give you at least 75 days notice before your policy expires to issue a nonrenewal. You can also contact your provider to see if there are any actions you can take to qualify for a renewal. The California Department of Insurance (www.insurance.ca.gov) provides useful guidance for responding to non-renewal notifications and also provides several information guides, tips, and tools for understanding home/residential insurance. Plus, you can contact their Insurance Customer Hotline (800-927-HELP) for assistance. In the event the decision is not reversable, finding a good “independent” agent using the resources mentioned above can help you find and maintain adequate coverage you can afford.
Q: What is the mandatory one-year moratorium on non-renewals?
The one-year moratorium refers to Senate Bill 824 (2018), an important consumer protection law that requires a mandatory one-year moratorium on insurance companies cancelling or non-renewing residential insurance policies in certain areas within or adjacent to a fire perimeter after a declared state of emergency is issued by the Governor. The protection from cancellation or non-renewal lasts for one year from the date of the Governor’s emergency declaration. The law has been implemented following wildfires in 2019, 2020, 2021, and 2022. For more information or to find out if your ZIP code is included in the latest moratorium, visit the Department of Insurance or see the C.A.R. fire insurance resource.
Q: What are the restrictions on an insurance company’s right to terminate coverage or “non-renew” an existing policy following a wildfire?
If you live in a ZIP code protected under the one-year moratorium, your insurance company is prohibited from cancelling or non-renewing your residential insurance policy for one year from the date of the Governor’s emergency declaration following the fire. If your home was destroyed by a wildfire, your insurer must renew you for two years. An extension of up to 12 additional months, for a total of 36 months, should be granted if you encounter delays beyond your reasonable control. For more guidance on protections following a wildfire, visit the Department of Insurance’s Top Ten Tips for Wildfire Claimants.
Q: How do consumer protection laws in California impact minimum rights applicable to temporary relocation expenses and time to rebuild?
Your time to collect Additional Living Expense (ALE) reimbursement, including temporary rent and rebuilding expenses, after a declared catastrophe is no less than 24 months even if your policy says otherwise; however, your amount of coverage is not increased. According to the Department of Insurance, an extension of up to 12 additional months, for a total of 36 months, should be granted to cover ALE expenses if you encounter delays beyond your reasonable control. For more on what is and isn’t covered for wildfire claimants, visit the Department of Insurance’s website.
Q: What are some precautions to take to improve your home's chances of surviving a wildfire?
A: When it comes to wildfire safety, every inch of a home is vulnerable due to several factors, including the possibility of fallen embers carried by the wind. As such, you’ll want to use ignition-resistant materials on and around your home to help it withstand such hazards and radiant heat. Also, be sure to create and maintain 100 feet of defensible space around your home. Defensible space is the buffer created by removing dead grass, plants, and weeds to help keep wildfires away. A quick guide on defensible space is available here. For additional useful guidance on fire safety, visit fire.ca.gov.
Q: What are some resources REALTORS® can offer their clients if they’re having a hard time, especially in a transaction?
Clients should know that many resources exist that are designed to help them make informed decisions when dealing with insurance. The Department of Insurance and United Policyholders websites contain a wealth of insurance knowledge and guidance and the Department of Insurance Customer Hotline (1-800-927-4357) connects clients directly to dedicated insurance experts ready to provide support when needed. In addition, a good insurance broker can help guide them in their search. Especially given the challenging conditions of the market, an experienced broker will have the know-how and background to help homebuyers find a policy with adequate coverage at a reasonable price. For help finding a broker, visit the United Policyholder’s online guidance, Department of Insurance’s Home Insurance Finder or use the FAIR Plan’s Find a Broker tool.
*The FAQs provided herein are for informational purposes only and not a substitute for legal advice. Your decision to select and contact an insurance provider should be based on your independent evaluation and in your sole discretion. Please visit the Department of Insurance and United Policyholders for further guidance.
Last updated: June 30, 2023
For Your Clients: Download and share these informational PDFs on topics related to wildfire safety and homeowners insurance with your clients via newsletters, emails, social media or however you stay top of mind with your network.
How to Find (or Keep) Fire Insurance
How to Protect Yourself from Scam Artists
How to Fire-Harden Your Home
The New One-Year Non-Renewal Moratorium Explained
Prepare for Flood, Mudslide or Other Insurance Claims Related to Wildfire
For Your Clients: Learn about important considerations related to purchasing a home and obtaining fire insurance through this quick guide that you can share via email, social media, directly on your website, or through your preferred outreach method to your clients.
Fire Insurance Quick Guide
Share in Meetings: This quick guide covers state and local defensible space laws and offers compliance guidance. It can be shared with colleagues via email, discussed in meetings, and used to help inform interactions with homebuyers in California.
Defensible Space Quick Guide
Download this powerpoint deck on wildfire issues.
For Your Clients: Learn how natural disasters such as wildfires can affect real estate transactions, and how to protect the parties involved through this quick guide that can be shared via email, social media, directly on your website, or through your preferred outreach method.
Natural Disasters Quick Guide
To address growing concerns surrounding finding and maintaining homeowners insurance coverage in California, experts at the California Dept. of Insurance, CALIFORNIA ASSOCIATION OF REALTORS® and United Policyholders, a nonprofit that advocates on behalf of consumers, recently gathered for an insurance townhall briefing for REALTORS®.
Panelists highlighted the complexity of the problem homeowners face when securing and maintaining fire insurance coverage and advocated that all stakeholders ― including REALTORS®― work together to encourage more cooperative mitigation as well provided as some actionable steps consumers can take to bring insurance costs down.
The panel included an emphasis on the multitude of resources available to help consumers at Insurance.CA.gov and UPHelp.org including information on the Wildfire Prepared Program, California FAIR Plan, and Wildfire Risk Reduction and Asset Protection (“WRAP”) Initiative and speakers underscored the continued commitment on behalf of the Dept. of Insurance, C.A.R., and United Policyholders to work together alongside insurance companies and other key stakeholders to help improve the process of finding and securing coverage throughout the State. The full recording is available online here.
CALIFORNIA ASSOCIATION OF REALTORS® has partnered with FortressFire to provide Wildfire Disclosure Reports (WFDRs) in response to the residential real estate market’s need for clarity and support for navigating wildfire risks, securing insurance, and complying with state reporting mandates.
The FortressFire WFDR is more than a list of best practices and general regulatory requirements. The WFDR uses a patent-pending physics-based model to identify the specific vulnerabilities of a home, the specific fuels that will cause the house to burn, along with cost estimates to eliminate those vulnerabilities and greatly reduce the risk of destruction in the event of wildfire.
These insights and recommended actions put homeowners on the path to insurability and more affordable rates.
The WFDR includes:
Fuel Load Analysis: Assessing the property's vegetation density to understand fire fuel potential.
Topographical Insights: Understanding how the terrain may influence fire behavior and spread.
Proximity to Fire-Prone Areas: Identifying potential risks based on the property's location.
Compliance with State Regulations: Documenting the status for AB 38 inspections and insurance coverage options.
Mitigation Recommendations and Costs: Offering personalized strategies to mitigate vulnerabilities and enhance insurability.
For more information on Wildfire Disclosure Reports including a list of Authorized Distributors, please visit our C.A.R. Wildfire Disclosure Report page.
Share in Meetings: Share this slide deck with colleagues to provide them with a summary of defensible space law, an outline of insurance coverage contingencies, and other important guidance related to finding and keeping homeowners insurance in California.
Wildfire Issues: Defensible Space & Fire Insurance Slide Deck
Share in Meetings: Understand important considerations related to purchasing a home and obtaining fire insurance through viewing this useful webinar. Share with both clients and colleagues the knowledge you gain about the current homeowners insurance market in California in conversation or summarize the takeaways in a newsletter or through a Q&A on social media.
United Policyholders Webinar Summary: Following the announcements that State Farm and All State have chosen not to issue new policies for homeowners insurance in California, nonprofit organization United Policyholders conducted a webinar recently to provide consumers with information about the impacts of these decisions.
Amy Bach, the Executive Director of United Policyholders, led a panel of home insurance industry experts to discuss the current market and actions homeowners can take to protect their homes.
The panel also covered what to do if your insurance company non-renews you, how to assess home insurance companies you’ve never heard of, and the CA Fair Plan and what it covers. Throughout the panel, speakers offered important guidance on what to consider when buying home insurance and where to go to educate yourself to protect your home, namely to the Department of Insurance and United Policyholders resources.
Among other takeaways, Bach underscored the importance of hiring a good insurance broker or agent, especially considering the challenging conditions of the current market. Bach also warned against underinsuring dwellings, as two-thirds of homeowners who lose their homes in wildfires find themselves underinsured. For consumers working with a non-admitted insurance carrier, it's that much more important to work with an agent or broker who can assure the company has the financial strength needed.
The meeting recording, materials presented, and links to basic tips and resources are available online.
Share in Meetings: Listen to this C.A.R. hosted panel discuss why insurance companies are dropping CA homeowners and what REALTORS® can do to save the transaction. Share the information learned in meetings and conversations, summarize it in a newsletter or email, or spread it on social media to help keep your network aware and prepared.
Wildfire Fallout: Link to Audio Recording
Speakers:
Emily Rogan, United Policyholders Rex Frazier, Personal Insurance Federation of California John M. Hochhausler, Manning & Kass Judy Austin, Broker Associate and 2019 President, Tuolumne County AOR® June Barlow, General Counsel, CALIFORNIA ASSOCIATION OF REALTORS®
The Small Business Association offers low-interest disaster assistance loans and other resources.
Disclaimer: The resources provided herein are for informational purposes only and not a substitute for legal advice. Your decision to select and contact an insurance provider should be based on your independent evaluation and in your sole discretion. Please visit the Department of Insurance and United Policyholders for further guidance.