FAQ 2023

We’re attempting to answer FAQs from clients in 2023. If you do not see your question below, please give us a call.

Why did my rates go up if I haven’t filed a claim?

• Insurance rates for property and autos can increase even without filing a claim due to various factors. Broader trends, changes in property valuation, or industry-wide shifts can influence rates. Your individual rate might also be adjusted based on updated risk assessments. Despite an aggregate 10% increase in premiums for the first half of 2023, the profitability of insurance companies has only slightly improved and is still running at an underwriting loss.
• California property and casualty insurers are facing a crisis, and consumers, along with insurance agents, are feeling the impact. Commissioner Lara is hoping to stabilize the industry with many proposed reforms related to rate making and insurance carrier participation requirements, however, it’s unlikely any of these changes will be felt by the consumer until 2025 at the earliest.

Why do I need to provide photos and proof of updates of my property?

• Insurers often require documentation to assess the condition and value of your property accurately. Providing photos and proof of updates helps ensure your property is adequately covered and within the carrier’s eligibility guidelines. It’s a proactive measure to avoid discrepancies in the event of a claim and to tailor your policy to your property’s current state.
• Most importantly insurers will be interested in learning when you last updated your major home systems which include Roof, Electrical, Plumbing, and HVAC

Why can’t the insurance company send someone to do the inspection?

• • Sending someone for an inspection could be resource-intensive and time-consuming. Asking for photos and proof of updates streamlines the process, allowing for quicker assessments. Additionally, this method often reduces costs for both you and the insurance company, helping to keep premiums more competitive.

Why can’t you find me a better policy with another company?

• As your insurance agency, our goal is to find the best coverage for your needs at the best price. We continually assess the market, but switching to insurers involves various factors. These include existing policy terms, coverage specifics, and your individual risk profile. We’re committed to exploring options that align with your preferences and needs.
• Today’s market has contracted a lot with many carriers declining to write new business or having left CA entirely. Right now, it’s best to stay with your current carrier despite the rate increase.

Why is there a waiting period before the policy effective date?

• A waiting period before the policy becomes effective is becoming industry standard practice. It allows insurers to review and manage risk more effectively and ensures that policies are not taken out solely in response to specific events, promoting fairness and stability in the insurance system.

How can I make my home more insurable?

• Keys to making your home more insurable include continued maintenance of the home’s major systems including roof, electrical, plumbing, and HVAC. Additionally, pride of ownership (exterior paint, removing debris, etc.) and ensuring no trees overhang the property are all good starts. Documenting the updates of the homes system is very important in being able to prove to the carriers your home has been well maintained. 
• If your home is in a wildfire hazard area and The Fair Plan seems to be the best option, discounts are available for homeowners who have taken steps to protect against wildfire. Please read more about the home hardening requirements and how to receive the refund on The CA Fair Plan Website

How can I lower my premium?

• Various ways to reduce your premium include raising your deductible(s), double-checking for discounts, adding alarm systems on your property, and taking steps to reduce claim activity. 

Why is the CA insurance market in such a mess? 

• In summary, a combination of climate-related risks, huge inflationary pressures, regulatory complexities, and operational challenges has led to disruptions in the California property insurance market. Addressing these issues requires collaborative efforts among insurers, regulators, and policymakers to create a more resilient and sustainable insurance landscape.
• Climate-Related Risks: California is prone to various natural disasters such as wildfires, earthquakes, and floods. The increasing frequency and severity of these events pose substantial risks to insurers, leading to higher claims payouts and operational challenges.
• Wildfires: The state has experienced devastating wildfires in recent years, causing extensive damage to properties. Insurers face increased costs for rebuilding and payouts, prompting some to reconsider their presence in high-risk areas.
• Insurance Company Exits: Some insurance companies have opted to withdraw from certain markets or reduce their coverage in high-risk regions due to the elevated costs associated with climate-related risks. This trend leaves homeowners in affected areas with limited coverage options.
• Regulatory Challenges: Regulations, including those related to rate approvals and the use of climate models, impact insurers’ ability to adjust premiums and manage risk effectively. Regulatory processes can be time-consuming and may hinder insurers from responding promptly to changing market conditions.
• Reinsurance Costs: The rising costs of reinsurance, which insurance companies purchase to mitigate their own risk, further contribute to increased operational expenses. California’s regulations limit insurers from directly incorporating these costs into their rate calculations.
• Underwriting Challenges: Insurers are facing difficulties in accurately assessing and underwriting risks, especially in areas prone to climate-related events. This uncertainty can lead to higher premiums and reduced coverage options for consumers.
• FAIR Plan Issues: The FAIR Plan, designed to provide coverage to high-risk properties when private insurers are unwilling to do so, has faced challenges. Recent reforms aim to transition properties back into the normal market, but there are concerns about the plan’s financial stability and its ability to meet the increasing demand for coverage.
• Financial Safeguards: Insurers, including the FAIR Plan, are under pressure to build reserves and implement financial safeguards to prevent bankruptcy in the face of extraordinary catastrophic events. This can impact their ability to provide affordable coverage.