The personal insurance industry has changed significantly during the past six months and the changes continue to unfold daily. To help give context, over a twenty year span, from 1999 up to 2017 the insurance industry paid $5.1 Billion for wildfire claims compared to the fourth quarter of 2017 where the industry paid out $6.8 Billion for that quarter alone. In 2018 the Woolsey and the Camp Fires cost the industry close to $20 Billion in insured losses.
Needless to say these costly fire damage claims have put a significant strain on the insurance industry, prompting carriers to take action and consumers are feeling the heat.
The personal insurance market is changing
Obviously, premiums are increasing. More problematically, more insurers are declining to renew policies due to risk factors such as encroaching brush or recent claims history. They’re also tightening underwriting standards, not just for brush, but also for earthquake and water damage claims. And with all the rebuilding activity, higher demand for contractors is increasing insurance replacement values. Some carriers are pulling out of the northern California market all together, potentially making some homes uninsurable and adversely impacting the real estate market.
How to change with the times
As the new normal takes hold, adapting to this new reality of risk is paramount. Here are some concrete steps you can, and should, do: