Fran Lancaster, a retiree living in Poway outside of San Diego, has had Farmers home insurance for 20 years and has never filed a single claim. She has maintained her property and has a new roof on her house. Over time, her premium reached nearly $1,500 to cover her 1,700-square foot, four-bedroom home. Every year, a renewal notice would come in the mail and she wouldn’t pay it much mind because her mortgage bank bundled the insurance into her monthly bill.
“So last June, I get this renewal statement. I don’t even look at it, I just file it since it is paid by my mortgage company,” said Fran. “I paid no attention until my mortgage got sold to a new provider and they said in November or December last year that you have this huge shortage and we have to increase the mortgage payment by almost $1,000 a month. They increased my premium from $1,500 to $4,400 a year. That is a lot for a retired person.
“When my husband was alive, we had three trucks, two cars and a trailer with Farmers. We had a lot of business with them. When I called my agent, he said be grateful they didn’t drop you. He mentioned someone in El Cajon that went from $4,000 to $11,000 a year to insure their home. He was giving me these really bad scenarios, so I said, fine I will just switch.
“I called 13 different companies and not one would sell me a policy. I called AAA and they said we’re not writing new policies. I called Mercury, they said nope not doing it. I have no recourse but to pay the bill. I just pay it. I am taking it out of my emergency fund to help pay for it.” Fran also called the Department of Insurance to complain about high premiums and got no help.
Fran talked to her Farmers agent who said the deductible could be raised from $5,000 to $10,000 to reduce the premium by $112. She said yes. “I don’t know what I would do if I didn’t have any savings. I am a widow now and don’t have family anywhere else. I would have to leave the state if I did not have any savings.”
Fran’s Farmers agent said that Fran lives in a “number 2” fire danger zone, but she was not told what that designation meant. “I said, well obviously I have not moved so what changed? Did Farmers reassess how they come up with fire danger? Nothing has changed, it has never been a problem with any fire. I was like, what you just reclassified my residence? I guess there is a scale but I don’t know what it means.”
Fran was never given any Farmers notice or explanation of the rate increase nor was she given any advice by the company on hardening her property against fire. Fran did not ask, nor did her agent offer, any steps that she could take to harden her property against fire to lower her rate. She also did not know to ask for and her agent did not give her any list of possible discounts if she were to take those steps.
Fran said that if she had been given instructions on hardening her her home and property against fire, and that would have earned her discounts, she would have followed them. “Absolutely I would have!,” said Fran. “But I cannot imagine what would need to be done. I have a very small back yard with a pool that takes up the majority of it with palm trees and some bamboo. My front yard is also small and is literally within 15 feet of driveway/road. My house is stucco and I have put on a brand new, $30k shingle roof. So, not sure what would have to be done, but I would do it if it was going to make a difference.”
Fran’s house is located off the 15 Freeway on the way into the Northern outskirts of San Diego. According to the Fire Safe Council of San Diego County, which helps residents protect their homes from wildfires, Poway is at serious risk of wildfire due to its terrain with steep mountainous slopes and valleys, a warm dry climate, Santa Ana winds from the east and highly flammable chapparal vegetation. Major portions of the town were evacuated during both the 2003 Cedar Fire and 2007 Witch Creek Fire. Fran remembers seeing one fire burning in the distance right after she moved into the house 20 years ago. But she doesn’t understand why, if her fire danger level wasn’t assessed as high then by her insurer, it was reassessed as high recently.
According to the Council, a new home assessment program is accepting applicants for free, educational home assessments for county residents to assist homeowners with understanding defensible space and home hardening principles and taking action to improve their homes to meet wildfire resilience goals. The home assessments are free via grant funding from CAL FIRE. Some parcels can receive up to $2,500 annually to create or maintain defensible space. In addition, neighborhoods can form Firewise Communities under the auspices of the National Fire Protection Association to work collaboratively to reduce a neighborhood’s wildfire risk. The Department of Insurance now requires insurance companies to provide discounts for residential property insurance when policyholders reduce their wildfire risks.
The neighbors are just starting to get hit with huge rate increases now, a discovery Fran made when she met up with other dog owners taking walks in the neighborhood. At first, people were saying they weren’t getting hit and Fran would say, just wait until your renewal happens. “Now, I have got neighbors coming out and saying that is exactly what happened to me, when the renewal came, they jacked up the rates on me.” “My income is not going up but my outgo is going up,” said Fran. “I understand now that I have one foot out the door as well, it’s like can I even afford to live in the state anymore?”
