Home Insurance Could Triple - Mountain News : News

default avatar
Welcome to the site! Login or Signup below.
Not you?||
Logout|My Dashboard

Home Insurance Could Triple

Font Size:
Default font size
Larger font size

Posted: Monday, May 2, 2016 6:00 am

Consider what a shock it would be to discover that your homeowners insurance is suddenly being increased from $1,800 per year to $6,100. This unpleasant surprise happened to a Farmers Insurance agent, Michele Wimmer, whose office is on State Highway 18 in Rimforest. It can happen to you, too.

The source of the problem is called a FireLine Score. It comes from an entity called the Insurance Service Organization (ISO). The insurance industry tracked statistics and noticed that during the past decade, hurricanes, thunderstorms and winter storms have caused more weather-related losses than wildfires, which come in fourth place with nearly $5 billion worth of insurance losses. But underwriters see those losses growing because wildfires have increased during the past 10 years.

Insurance companies identified a need for more comprehensive and detailed assessments of the possibilities of wildfire damage for each property. “They created a method for rating fuels, slope, roadways risk and accessibility by emergency vehicles,” Wimmer explained. ISO also identifies properties located in Special Hazard Interface Areas for risks exposed to wind-borne embers, for example, properties affected by the Santa Ana winds in California.

“Each house gets a score of zero to 25. It’s used for rating purposes, but is not used the same way by all companies.” Wimmer said some insurance companies use it to decide not to write a policy at all, to cancel whenever they want, to decline to renew, or to raise the premium. When Wimmer’s FireLine score doubled from six to 12, her premium more than tripled.

“Seniors on fixed incomes cannot afford to have this happen to them,” Wimmer said. “Nobody is safe. Everybody is being affected by this, and people need to stop burying their heads in the sand. We can’t pretend this is going to go away.”

For more than three years, Wimmer has been warning people, including real estate agents, about this. “It’s not a matter of ‘if’; it is happening right now.”

According to Wimmer, you cannot appeal your FireLine Score with ISO. “They don’t care, they won’t change it, and you cannot even get through to them,” she said. “You’re really locked in.”

But ISO is not locked in. The score is not static. ISO can and will re-evaluate and change your score if there are changes in the system for rating fuels, slopes and access. While one neighbor pays $900 per year for insurance, the next one might be paying $1,800 and the one across the street pays $6,100.

When rates are raised, some people become very angry about the rates and they don’t listen. They start checking with insurance agents down the hill, and think they are insured until an inspector comes up the mountain and informs the homeowner that the company doesn’t insure up here because of wildfire concerns, Wimmer reported.

To make matters worse, if you are insured with an admitted insurance carrier, you cannot cancel the policy and go to another agent for cheaper rates. “If you are already insured and are compliant with requirements for defensible space and roofing materials, you cannot simply cancel and change from one admitted carrier to another. You are stuck with that policy and the increased rates. Non-admitted carriers are only for people who cannot get insurance elsewhere. But since you do have insurance, whether you like the premium rate or not, you would be ineligible.”

Since Wimmer is in the insurance business, she attempted to make some changes in her own policy. One idea was to structure the reconstruction cost estimator as low as she could go. “I saved $18 per month by lowering the reconstruction cost.” That $216 didn’t make much of a dent in her $6,100 annual premium.

As Wimmer sees it, no one will be able to obtain affordable insurance on the mountain. “You can’t self-insure if you have a mortgage. If you cannot afford to get insurance up here, can you afford to sell your house? But people won’t be able to sell a home because buyers cannot get fire insurance—or the insurance companies won’t be selling policies. The real estate business will come to a halt.”

Wimmer is alerting the public as a consumer and member of the community, not as an insurance agent. She has lived in the mountain community for 25 years, considers herself to be entrenched here. She has a passion for what is happening to seniors, and believes strongly that the FireLine Score isn’t right. “I know life isn’t fair; but this isn’t right,” Wimmer contends. It’s happening across the board, including auto insurance and other industries. “We are becoming victims of the greedy ones,” she argues. “That’s why I will talk to any group, explain it, provide handouts. We can beat this, but we cannot let it go on too long. We have to pay attention, stand up and stop it.”

Coming next week: What can residents do about this FireLine Score?

  • Discuss

Welcome to the discussion.