How to prepare for California wildfire season

State Farm and Allstate have announced they are no longer selling new home insurance policies in California, just as the state prepares for peak wildfire season.

Southern California peak fire season typically starts in May or June and runs through October, while Northern California peak fire season usually begins in June or July and runs through October or November, according to the Western Fire Chiefs Association.

If you are looking for homeowners insurance to make sure your house is covered, here’s everything you need to know to be properly insured for California wildfire season. 

Why did State Farm and Allstate stop selling home insurance in California?

State Farm announced it is no longer accepting new applications for home insurance in California, citing record high construction costs that are outpacing inflation, an increase in catastrophe exposure — such as wildfire risk — and a challenging reinsurance market in California. In other words, State Farm can’t raise its rates high enough to cover the increased risk and cost of catastrophic damage caused by wildfires. 

Allstate also quietly announced in its 2022 third quarter earnings report in November that it would no longer write new homeowners and condominium policies in California. Allstate spokesperson Brittany Nash echoed State Farm’s sentiments in a statement on June 2 saying, “The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes, and higher reinsurance premiums.”

While both State Farm and Allstate have halted writing new home insurance policies, both companies stated they will continue to insure current customers. If you have home insurance with either company, you should still be able to renew your policy.

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How to get home insurance in high risk fire areas of California

In recent years, California has seen some of the most destructive and costly wildfires in its history. Due to this increased threat, you may have a difficult time finding affordable homeowners insurance if you live in a high risk fire area in California. 

Here are some things you can do if you’re having trouble getting home insurance in California, according to Janet Ruiz, director of strategic communication at the Insurance Information Institute. 

• Check with your insurance company about mitigation efforts. If you receive a nonrenewal, contact your insurance company to learn if there’s anything you can fix to make your house more insurable. “Many insurance companies will respect the work you do to your home, so let them know any [fire] mitigation you’re doing or have done,” said Ruiz. 
• Shop around and compare insurance companies. “We always recommend people shop and compare home insurance,” said Ruiz. “Especially local insurance brokers that work with several different companies, they’re usually aware of which companies in your area are still willing to write new home insurance policies.”
• Check out excess and surplus (E&S) insurance. E&S lines specialize in things standard insurance companies won’t cover, like houses in high risk wildfire areas. “We call these specialty insurers. They’re not admitted by the state so the rates aren’t regulated, but they are reputable companies. They may charge more, but in high risk areas that’s to be expected,” said Ruiz. 
• Check out the California Fair Access to Insurance Requirements (FAIR) Plan. “The FAIR Plan is the state’s insurer of last resort, and it’s just a basic fire policy. So usually people will need to get additional insurance,” said Ruiz. The California Fair Plan only pays for damages caused by fire, lightning, smoke and internal explosions. You may be able to purchase more coverage at an additional cost.  

Even if all you can get right now is coverage through the California FAIR Plan, Ruiz recommends you get the policy, but continue to shop around. Just because an insurer turned you down a year ago for coverage doesn’t mean it will again, Ruiz advises. 

How to prepare for California wildfire season

There are several organizations and programs in California that work with members of the insurance industry in order to help neighborhoods and communities mitigate their fire risk. If you participate in any sort of mitigation program, make sure you let your insurance company know. This may earn you a discount on your homeowners insurance. 

Wildfire Prepared Home

Wildfire Prepared Home is an Insurance Institute for Business & Home Safety research-based mitigation program. The program helps communities fireproof their neighborhoods and houses. 

“Wildfire Prepared Home helps communities harden their homes, advises them on how to clear their land, which plants are better than others,” said Ruiz. 

Wildfire Prepared Home provides you with a guide on how to fireproof your house and then sends out an inspector, who will give you a designation. If you receive a Wildfire Prepared Home designation that means you’ve taken critical, research-backed steps to help harden your house against wildfires. You should also let your insurer know — depending on the company you may receive a discount on your home insurance.  

FireWise USA

FireWise USA is a national program that helps residents organize and mitigate fire risk in their communities. You create a board or committee that works with wildfire experts to make sure the land, houses and landscaping are set up to be less high risk for costly fire damage. 

How to save on home insurance in California

In California, some insurers may offer discounts for partaking in programs like Wildfire Prepared Home, said Ruiz, and there could be more discounts to come. California Department of Insurance enforced a wildfire safety regulation on Jan. 1, to help decrease the cost of insurance for Californians at risk of wildfires. 

“The Department of Insurance asked all admitted insurance carriers in the state to submit a new rate structure in April. And that would include discounts for home hardening and mitigation efforts. This was recent, so it’s still in the process,” said Ruiz.  

Here are some things you can do to keep home insurance costs down:

• Shop around and compare home insurance quotes and companies.
• Ask about discounts, such as bundling your home and auto policies. 
• Keep your credit score up.
• Raise your deductible. 
• Go claims-free for a certain amount of time.