Your neighbor keeps you from getting homeowners insurance?…163

#homeownerinsurance #realestate #firehazard

Deerwood Realty and Friends Podcast

Fascinating story today about a man who was denied a home insurance renewal because of his neighbor

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Thoughts/questions:

1. So, an insurance company can determine that they will not renew your policy based on what your neighbor does with their property? That is wild. This should stop any illusion you might have that you have individual property rights and that those rights supersede the insurance authority.

2. A “controversial” wildfire prevention organization…controversial in that they are against removing trees to mitigate wildfires….take a look at this website

3. How do you “legally” remove trees or shrubs from a neighbor’s yard? Does this “encourage” illegal behavior?

4. Insurance exists to protect you in the case that some event happens….I feel like in the past decade or so, insurance has come to mean voluntarily giving a portion of your income to an insurance company that has no intention of paying out on their claim, and in this case, specifically refusing to offer coverage to people in areas where they clearly need insurance. Seems like something is broken here.

And, I’m not so interested in the idea, “Just don’t live there!” The whole point of insurance is to protect in areas where it is not normally financially feasible for the individual to self insure. We face a massive housing shortage in the United States…restricting where homes can be built due to not being able to be insured only exacerbates the problem.

5. How can a state insurance commission allow an insurance company to operate in a state and then restrict where they provide coverage on the basis of the risk? The whole point of insurance is a hedge against risk. From my perspective, if an insurance company decides that they wish to do business in a state, they should be required to operate within the entire state, not cherry pick the most profitable areas…because that isn’t the point of insurance. Or is it?

6. If you have no control of the brush risk, an insurance company should not be allowed to deny you coverage on that basis.

7. This homeowner has lived in this house forever…and now there is a 100 ft defensible space issue? What changed?

8. I’m not against standards for fire safety…whatever is deemed reasonable, especially in an area with the propensity for wildfires should be done…and I am glad that there is a standard from which the fire department operates.

9. I would be in favor of the insurance rules lining up with the safety requirements set forth by the municipality. I’m not for sharing of notes between a private insurance company and a municipality. People are right to be concerned about his…you can see how the differing requirements could cause friction.

10. I’m not sure that I agree with keeping insurance risk scores private. I’m all for a standards based system, but those scores should be available for the public to see, especially new home buyers who are considering purchasing a home in these areas. Like flood insurance, that is a cost that tends to never go down, and does affect the opportunity to add equity one has in their home.

11. Insurance companies, state legislatures, and advocacy groups coming together to work through the problems seems like the only path forward.

Sources: https://www.berkeleyside.org/2021/09/20/home-insurance-non-renewal-berkeley-oakland-hills

https://www.hillsconservationnetwork.org/1991-oakland-berkeley-hills-fire

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