If the fires and floods weren't quite enough for Santa Barbara homeowners, we've been hit by a new challenge; the cancellation of close to 6,000 policies between Goleta and Carpinteria by State Farm. Homeowners that haven't been hit with a cancellation have seen their policies increase exponentially. Farmer's Insurance informed local Sotheby's Real Estate Agent Chris Palme last fall that his policy would be increasing from $2,000 a year to $9500. Chis explains, "After experiencing a series of emotions ranging from disbelief to infuriation, I called my long-time insurance agent who informed me that there was little I could do other than hope things improve before the next renewal in a year." Chris leaned on his local connections and was given two potential leads, USAA for anyone with a military affiliation or family connection or AAA. Eligibility for USAA is for members, spouses and children of current members and can represent massive savings in the current insurance market. AAA ended up becoming Chris' new insurer, matching the previous rate he had with Farmers.
There is a lot of talk about how we protect our community moving forward. At a recent Sotheby's event, Robert Feldman gave a fascinating presentation about how his company, WOWS insurance services is reimagining covering California. He believes that it is possible to reengineer how homeowner's insurance is managed and how neighborhoods are covered. His plan uses cutting edge analytic technology in high risk areas to map and spread the risk so that one or two companies aren't sustaining all of the massive losses. His products are designed to help homeowners in high risk areas obtain great coverage that keep costs down and can even be fully transferable upon the sale of the home.
Robert states, "California's Fair Plan should be an insurer's last resort. It can be an effective tool when done properly. However, based on my experience up to 90% of the policies were not set up properly." He advises consumers in the short term to shop the market, work with a trained insurance expert and determine if they qualify for the California Fair Plan.
"California's Fair Plan should be an insurer's last resort. It can be an effective tool when done properly. However, based on my experience up to 90% of the policies were not set up properly."