Our hearts are with Los Angeles as the recent fires impact our colleagues, friends, and family members. As Northern Californians who have experienced similar challenges, we understand the concerns these events raise, particularly regarding real estate and homeowners’ insurance in our Lamorinda community's high-fire designated areas. The recent San Francisco Chronicle article (1/18/25) comparing Moraga and Orinda to Pacific Palisades has prompted many questions from our community.
In times of uncertainty, it's crucial to focus on the facts. Currently, after checking with many carriers, our team has learned insurance solutions remain available. The California Fair Plan continues to serve as a viable option for fire insurance in high-fire designated areas of Lamorinda and the Diablo Valley. Many community members have successfully paired this with a wrap policy from another carrier to ensure comprehensive coverage as many traditional carriers began limiting their California presence a little more than a year ago.
For clarity, I recently spoke with Robert Pane of Rate Insurance, who provided valuable insights about the California Fair Plan:
“The California Fair Plan was established in the late 1960s/early 1970s as the "insurance of last resort" for homeowners unable to obtain standard insurance. While not state-run or taxpayer-funded, the risk is distributed among admitted carriers licensed in California. Claims are paid directly by CA FAIR, backed by reinsurance, and supported by the admitted carrier pool if needed.”
In addition, Robert shared the below key statistics and current conditions:
- Contra Costa County has seen 6,500 new policies in 2024 (228% increase), representing over $10B in total exposure
- For context, Los Angeles County's exposure is $112B
- Currently, active fires have triggered temporary moratoriums in affected and evacuation zone zip codes
- Coverage options will resume once fires are fully contained
Looking ahead, while we cannot predict exact outcomes, we should anticipate:
- Potential rate adjustments as carriers balance their risk portfolios nationally
- More stringent property inspections focusing on roofs, brush clearance, and overall home condition (As a side note, Todd and I received a call from our carrier for an in-person inspection of our Lafayette home. I will have first-hand knowledge of the process and outcome to share soon.)
- Possible changes to carrier policies and acceptance criteria once the situation stabilizes
To protect our clients' interests, we are currently recommending that all purchase offers include a contingency for obtaining satisfactory insurance and ensuring that same insurance is still viable and available at the close of the escrow period. While this deviates from our typical market practices, it's a prudent approach given the current climate. We believe reasonable sellers will understand this temporary adjustment to protect qualified buyers.
The Dana Green Team remains confident that our local real estate market can maintain its stability when both buyers and sellers approach transactions with reason and fairness. We are committed to guiding you through these evolving circumstances with transparency and expertise.
Please don't hesitate to reach out with any questions or concerns.