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Important Notice Regarding Changes in California HOA Insurance Market

Posted on April 10, 2024

As part of our unwavering commitment to keeping you informed about developments in the insurance landscape, we feel compelled to draw your attention to recent shifts in the California market.

We have recently observed significant changes in the state’s home insurance sector. Specifically, several major insurance providers have made the decision to cease selling insurance in California. This decision is primarily influenced by the state’s high wildfire risk, exacerbated by increased severity and rising home construction costs. Notably, seven of California’s largest property insurers—State Farm, Allstate, Farmers, USAA, Travelers, Nationwide, and Chubb—have chosen to limit new homeowners policies in the Golden State. This move raises pertinent questions about the stability of the California home insurance market.

In light of these developments, we recognize that these changes may impact your options for coverage and premiums. Therefore, we are dedicated to navigating these changes alongside you.

In response to these changes, other carriers entering the market may impose different requirements for insuring properties. Here are some common conditions that you may encounter:

Property Inspection: New carriers may require a thorough inspection of your property to assess its insurability and associated risks.
Safety Upgrades: Mandated safety upgrades may include ensuring that railing widths for balconies and walkways are within safety standards.
Electrical System Upgrades: Properties with outdated electrical systems, such as Zinsco or Federal Pacific panels, or those with aluminum wiring or stab lok breakers, may require upgrades to meet safety requirements.
Stucco Repair and Pool Fencing: Some carriers may necessitate patching cracks in stucco and installing fencing around common area pools to meet safety and liability standards.
Fire Sprinkler and Stand Pipe Testing: It is imperative to ensure that fire sprinkler and stand pipe testing is current to comply with regulatory and insurance requirements.
Roof and Pipe Upgrades: Upgrading roofs that are near or beyond their lifespan and replacing galvanized pipes with copper may be necessary to enhance property infrastructure and improve insurability.

Preparation is key in navigating these changes effectively. Understanding the requirements can aid in budgeting for any necessary upgrades and ensuring compliance with insurance standards. Ultimately, these proactive steps can assist in obtaining insurance coverage at the best possible rate within your budget.

We acknowledge that adjusting to these insurance changes can be challenging. Rest assured, we are here to provide support every step of the way. However, if you are currently insured with State Farm, Allstate, or Farmers for your HOA, it is advisable not to shop these policies, as leaving these carriers may result in difficulty securing coverage with them in the future and result in unexpected capital expenses for the above upgrades mentioned.

If you have any questions or concerns regarding your insurance coverage or the current market conditions, please do not hesitate to reach out to us.

Sincerely,

Heather Miller -CEO