No insurance in older homes.
-
In San Francisco:
https://www.sfchronicle.com/california/article/home-insurance-coverage-provider-18626298.php
After 26 years with the same insurance provider, Ruby Rich’s San Francisco home was dropped because of its age.
The three-unit, 1904 building — which survived two major earthquakes and was in great shape, according to Rich — was cut last year after Farmers Insurance changed its policies to exclude multi-unit homes built before 1925.
“I was terrified,” Rich said. “My house is my major asset and suddenly I had no insurance.”
In 2023, Farmers Insurance — part of California’s second largest homeowners insurance provider, Farmers Insurance Group — stopped offering and renewing insurance policies nationwide for apartments, townhomes and condominiums built before 1925. The policy change, which the company says applies to “commercial” coverage, did not impact other Farmers Insurance Group affiliates or owner-occupied, single-family homes with Farmers Insurance.
But experts say that other insurers could make similar moves, and some Californians say they are already getting sharp questions about the upkeep of aging homes. It’s the latest twist in the state’s broader insurance crisis, which has seen numerous insurers — including some Farmers affiliates — end or pull back their coverage in California.
A Farmers spokesperson said the insurer decided to exclude old multi-unit homes because “the loss trends for those risks are considerably higher.” He said that losses from owner-occupied, single family homes tend to be different from those of multi-unit buildings. The spokesperson did not comment on why the cutoff year was 1925 or what makes older homes less profitable to insure.
Jerry Becerra, president of Barbary Insurance Brokerage, which operates in the Bay Area, said older homes may have increased risk of electrical fires because of outdated wiring, or at higher risk for water damage as systems wear out.
Some insurance companies other than Farmers have also stopped accepting older homes, according to Becerra, though he did not name them. He said insurers that accept older homes may require a lot of documentation about improvements that have been made, which homeowners often do not have readily available.
As for the question of why insurers may cut out multi-unit homes before single-family ones, Becerra said that multi-unit homes have more residents and that upgrades, including wiring and plumbing, can be more challenging.
David Russell, a professor of insurance at California State University, Northridge, said older homes have more claims generally than newer ones and cost more to restore because materials may have changed and upgrades may be necessary. Many insurance companies have recently lost money, he said, and are being cautious about their risks.
“An owner of an older home might say, ‘I haven’t ever had a claim. I’ve been here 30 years and nothing’s ever happened,’” Russell said. “That’s not how insurance looks — it generally focuses on the future.”
San Francisco has at least 28,780 buildings built before 1925, according to the city’s land use database. Rich, whose home is between Bernal Heights and the Mission, noted that older homes enrich the character of San Francisco.
“Targeting older buildings … sounds like such a betrayal because San Francisco is known for its Edwardian and its Victorian and its beautiful old houses,” Rich said.
Russell said pullbacks like Farmers’ could potentially become more common because impacted older homes will now seek new coverage, and other companies may not want what Farmers already deemed too risky.
"Now look here, you Baltic gas passer... " - Mik, 6/14/08
The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.
-
There are multiple problems in the insurance business today. This San Francisco problem I didn't know about, but if you think about it, there is a logical argument.
We have problems with insuring homes below I-10, due to hurricanes. I've also read where Florida is also having some problems. I'm sure there are problems in other parts of the country I don't know about.
I guess it boils down to risk, company profit and how much the market will bear. I'm mostly free market, but public utilities and insurance are two areas that require some government oversight. And that goes both ways...For instance, in order to keep insurance companies in Louisiana, new buildings after the storm have to conform to hurricane code. In a private, single dwelling home, that means things like metal straps from the rafters to the top plate and a metal rod every few feet connecting the top plate to the bottom plate and the slab. If a house is built on piers, it has to be able to tie into the underlying ground in some manner.
So doing my best Jenn Saki, let's circle back to the original problem...How can California keep insurance companies in the state, yet still maintain its historic buildings? And...Could part of this problem be a symptom of the insane rent in San Francisco, where the only way to afford an older, multiroom home, is to rent out part of it?
-
In San Francisco:
https://www.sfchronicle.com/california/article/home-insurance-coverage-provider-18626298.php
After 26 years with the same insurance provider, Ruby Rich’s San Francisco home was dropped because of its age.
The three-unit, 1904 building — which survived two major earthquakes and was in great shape, according to Rich — was cut last year after Farmers Insurance changed its policies to exclude multi-unit homes built before 1925.
“I was terrified,” Rich said. “My house is my major asset and suddenly I had no insurance.”
In 2023, Farmers Insurance — part of California’s second largest homeowners insurance provider, Farmers Insurance Group — stopped offering and renewing insurance policies nationwide for apartments, townhomes and condominiums built before 1925. The policy change, which the company says applies to “commercial” coverage, did not impact other Farmers Insurance Group affiliates or owner-occupied, single-family homes with Farmers Insurance.
But experts say that other insurers could make similar moves, and some Californians say they are already getting sharp questions about the upkeep of aging homes. It’s the latest twist in the state’s broader insurance crisis, which has seen numerous insurers — including some Farmers affiliates — end or pull back their coverage in California.
A Farmers spokesperson said the insurer decided to exclude old multi-unit homes because “the loss trends for those risks are considerably higher.” He said that losses from owner-occupied, single family homes tend to be different from those of multi-unit buildings. The spokesperson did not comment on why the cutoff year was 1925 or what makes older homes less profitable to insure.
Jerry Becerra, president of Barbary Insurance Brokerage, which operates in the Bay Area, said older homes may have increased risk of electrical fires because of outdated wiring, or at higher risk for water damage as systems wear out.
Some insurance companies other than Farmers have also stopped accepting older homes, according to Becerra, though he did not name them. He said insurers that accept older homes may require a lot of documentation about improvements that have been made, which homeowners often do not have readily available.
As for the question of why insurers may cut out multi-unit homes before single-family ones, Becerra said that multi-unit homes have more residents and that upgrades, including wiring and plumbing, can be more challenging.
David Russell, a professor of insurance at California State University, Northridge, said older homes have more claims generally than newer ones and cost more to restore because materials may have changed and upgrades may be necessary. Many insurance companies have recently lost money, he said, and are being cautious about their risks.
“An owner of an older home might say, ‘I haven’t ever had a claim. I’ve been here 30 years and nothing’s ever happened,’” Russell said. “That’s not how insurance looks — it generally focuses on the future.”
San Francisco has at least 28,780 buildings built before 1925, according to the city’s land use database. Rich, whose home is between Bernal Heights and the Mission, noted that older homes enrich the character of San Francisco.
“Targeting older buildings … sounds like such a betrayal because San Francisco is known for its Edwardian and its Victorian and its beautiful old houses,” Rich said.
Russell said pullbacks like Farmers’ could potentially become more common because impacted older homes will now seek new coverage, and other companies may not want what Farmers already deemed too risky.
@George-K said in No insurance in older homes.:
“Targeting older buildings … sounds like such a betrayal because San Francisco is known for its Edwardian and its Victorian and its beautiful old houses,” Rich said.
And it is the responsibility of the insurance company to pay for beautiful old houses that fall down.
-
I'm very familiar with a company that insures commercial and industrial properties. They will make recommendations for improvements to reduce the risk, and in some cases decline to insure if the customer is unwilling to make the changes. The situation is going to be somewhat different for residential homes, since the owners might not be able to afford to pay for improvements, however refusing to do business in order to remain unprofitable is a logical outcome of a risk-assessment process.
-
A lot of this is state to state. Some states make it difficult to increase premiums sufficiently to cover increases in claims…So they have to come up with whole categories to drop. But before they do that they need to have studies at the ready that show these decisions aren’t discriminatory in some way.
