If you are like most homeowners in California, you are seeing an increase to your home insurance premium when you open your renewal policy. This is a source of frustration for most of us at a time when it’s very hard to absorb extra costs for things we need.

A recent study of independent data provided by LEXIS-NEXIS, CoreLogic, and other data sources revealed that the four main causes are Water losses, increased construction costs, liability claims, and wildfire risk.

• Water loss is continue to rise countrywide And the data shows that trends are continuing hire, and California ranks third in the nation for water losses.
• Construction costs continue to rise.  Labor costs have increased 4.6% over the past two years countrywide, and California materials costs continue to be higher than national averages. They were 4% higher in 2019 than the nationwide average.
• Liability claims any California ranks second in the US for liability claims, And generally liability insurance claims have a slow moving process which adds to insurance company expenses.
• The most significant impact on California homeowners insurance premiums is the continued an ongoing increase in wildfire risk. In 2017 and 2018 there were over 18,000 fires that burned more than 3,000,000 acres. Approximately one out of every four Californians live in areas considered to be high risk for wildfire, and over 1.1 million California buildings are in very high severity fire zones

So while we really do not enjoy being the messenger of such troubling news, it’s our job to know the trends and help you find the best policy to meet your needs. The situation is so difficult that the California Fair Plan Association, which provides fire insurance when there is no other option available, recently doubled it’s available limits of coverage to meet the growing needs of California Homeowners and Building owners.  Please call us today for consultation regarding your situation.

Share This