Coto de Caza home ineligible for homeowners policy.

2 Replies

As buyers, we are considering accepting a counter offer on a 2MM+ home in Coto de Caza.

The home is at the end of a cul-de-sac and backs to open space. We've been struggling to secure a quote for homeowners insurance as carriers are classifying the home as ineligible due to wildfire danger. Over the last week, we've been denied by over 20 different carriers. They also denied adding supplemental insurance on top of the California FAIR plan, which only covers 1.5MM of structure.

I have a limited understanding of the insurance business, but I have heard that it's not unusual for insurance companies to "tighten up" after a bad wildfire season, and then soften again a few years down the road. However, all of the insurance agents I've been speaking with say that they've never seen it this bad, and some are speculating that it may only get worse.

We are still waiting to hear back from a few non-admitted carriers but the agents suspect their quotes will exceed $20,000/yr.

Does anyone on this sub have experience with this issue?

What is your opinion on you think this issue will get worse as the years go on? Is it going to drastically affect home prices? I am afraid that even if I do find an insurance option for this home, I will struggle to sell the home in the future due to challenges securing a homeowners policy.

Are there any insurance options that I'm missing? I've reached out to 4 different agencies and USAA. Combined, it makes up 25 different carriers which have denied coverage.

@Coto Insurance Trouble ,

We see this situation in Texas a lot.  We write landlord insurance all over the state.  When there has been a season of hurricanes and hail, the insurance companies either won't write coverage or bump the prices sky high.  

It is their way of saying, "Hey if you really want coverage, we will provide it at this price!"

Then we have a season with no major climate events and we see some of these same companies come way down.  I just did a policy for a member of BP the other day and a big national company is trying to get a lot of landlord insurance in Texas so their pricing was extremely aggressive(i.e. LOW).  This person was pretty happy to see how low the quotes were. 

I did mention to this new client that these prices may move around when the policy is up, and we may need to shop this coverage again for him next year. 

I think you will find that same situation in California.  The term we use is "appetite".  Meaning maybe nobody has an appetite for fire risk in California right now. 

I would contact some of the neighbors and just let them know you are looking to buy the home at the end of the street and you are concerned about insurance.

Who do they use? What do they pay?

If this is tough for you right now, I would consider it may be tougher in the future when it is time to sell.  You don't want to be overly optimistic about your opportunities to sell. 

If you are REALLY in love with this place find some great insurance, and submit a new offer to the sellers with the price adjusted for the risk that you may have to rent the house out instead of selling when you leave, and the risk that you may have a LOT of trouble getting insurance in the future. 

Good luck,


@Coto Insurance Trouble were you able to secure insurance coverage on the home you were looking to purchase?

The California home insurance market has been upended as a result of the wildfires which have been increasing in severity over the past few years. Many of my clients have seen their insurance premiums increase from 2x-5x what they have been paying for years. There are only a handful (less than 10) of insurance carriers consistently considering coverage for homes in high fireline areas. I have had clients in rural mountain communities of Northern California tell me that people are selling their homes or even going without insurance due to the rising costs.

The California Department of Insurance and the United Nations Environment Program have partnered in order to find some sort of sustainable solution in moving forward.