Twain residents meet to discuss homeowners’ insurance crisis

The stark reality of cancellations and massive premium hikes brought Twain residents together July 24 to try and join or create a fire district to satisfy insurance companies. Plumas County Supervisor Lori Simpson sat in for Kevin Goss who is recovering from a serious illness.

The consensus was anything but positive. Simpson has researched the problem because it affects every homeowner in Plumas County and the entire state. The major insurance carriers have taken a huge financial hit from the destructive forces of wildfires. Many areas that have received serious fire damage are no longer insured by those companies.

Many homeowners in the state have received cancellation notices or premium increases of 400 to 500 percent. Those who have mortgages are caught in a double whammy: Their lenders demand they carry insurance.

The list of areas hit by fire in the 2018/2019 years is extensive, but North State insurers have just had to deal with the most destructive wildfire in California history. Some smaller insurance companies have failed from the drain caused by claims.

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Scott Packwood of CalFire outlined a process that could be used to form a fire district. The Feather River Canyon Community Services District (FRCCSD), could form its own fire district or perhaps join with the Quincy Fire Department. Jeff Wilson and Jerry Sanchez, officers of that service district, were present to evaluate the steps needed to form or join a fire district.

Insurance companies rate fire districts on a numeric scale 1 to 5 with 1 being a fully manned district, with all the latest equipment and training. These conditions only exist in large metropolitan entities.

Most rural, volunteer fire districts are rated a 5 and a great deal of work and training might get them as high as 4. Insurers don’t really care. They are focused on getting out of areas prone to wildfires because of the liabilities they have been hit with recently.

Unfortunately there is no quick fix for the problem. Insurance carriers are faced with huge losses and the prevalence and intensity of wildfires shows no sign of decreasing.

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Even Lloyds of London has cancelled many polices and has refused insurance for home buyers in fire prone areas. This has forced people to search for insurance in the surplus insurance market at a high cost. This is the area that lenders go to when mortgage holders lapse on their fire insurance.

One area of last resort is the California Fair Plan. Insurance is available through this organization of carriers, but at a very high cost. The Fair Plan only covers damage from fire, hail and other weather-related causes. Other coverage items, such as liability, water damage, theft, etc. has to be purchased by a separate, or wraparound policy, at an additional cost.

State Insurance Commissioner Ricardo Lara is looking into legislative solutions to provide some sort of relief to homeowners and is looking to policies modeled after areas in the Midwest and Gulf Coast that have faced similar problems from tornados and hurricanes.

Aaron Grove of the Forest Service stressed the absolute necessity of clearing grass and brush from around structures. But even homeowners who have gone so far as to install sprinkler systems on roofs, have seen their policies cancelled. There is panic among insurance carriers, and agents are feeling the crush. They can’t stay in business if they can’t write policies.

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The effects of climate change and population density can no longer be ignored, but for those who live outside large metropolitan areas, there is no viable solution on the immediate horizon. There are means where Twain residents can create a fire district, but at this point it is doubtful that insurance companies will moderate their requirements regardless.

Homeowners with ongoing insurance issues can call the CA Department of Insurance Consumer hotline at 800-927-4357 or visit www.insurance.ca.gov.