Growing up in California, wildfires never felt like a direct threat. Earthquakes were the only natural disaster anyone really gave any thought to. But in the last six years, things have drastically changed with the introduction of our newly minted “fire season,” leaving Californians concerned and looking for solutions.
While our California climate changes, so are the local migration patterns. The climate is trending drier and hotter every year while rural development is surging - a direct response to the high cost of urban living, growing housing shortage, and recent remote work opportunities. These recent shifts make for a dangerous pairing, IF the proper steps are not taken by home buyers and sellers.
According to CalFire, 8 out of the 10 largest wildfires in California have been in the last five years, with 50% being in 2020 alone. Also in 2020, more and more Bay Area residents traded urban life for a more rural/suburban one. Since the pandemic, communities such as Roseville/Rocklin, Folsom, Clovis and Merced saw some of the state’s biggest percentage changes in population growth year over year. Closer to home, we’ve seen more residents buying in communities such as Morgan Hill/Gilroy, Livermore, Orinda/Lafayette/Moraga and throughout the Santa Cruz Mountains. But while rural development expands, so does the threat of wildfires. So how do Californians adapt?
If you currently live or are considering a purchase in high-risk fire areas, you may be faced with increasing premiums, high deductibles or a drop in your home insurance policy altogether. In 2020, residents living in moderate to high-risk zones saw a 61% jump in non-renewals from insurance companies. This is a reality more and more Californians can expect in the coming years, and why it’s even more crucial than ever to know your options and prepare.
Most insurance companies will provide a discount or continue your coverage if you take steps to “harden your home” by taking preventative measures such as those listed below:
If you happen to find yourself without coverage, The FAIR Plan might be your only bet. It’s a network of providers that offer basic insurance at a very high premium - designed to be a last resort option.
The reality is wildfire risk is here to stay and growing with each year that passes - just another factor that Californians need to consider when looking for communities to buy in. And if you are looking to sell your home in one of these high-risk areas, keep in mind you will need documentation of a compliant Defensible Space Inspection. Check out the OSFM website to learn more.
Here's How To Gain Your Competitive Edge: As a buyer, check out CAL Fire's Fire Hazard Severity Zone Map to determine if the property you are interested in purchasing is within a high-risk area. Also, call your insurance company to check if coverage is attainable and at what cost. Finally, use this knowledge to negotiate the price and terms of your purchase. As a seller, be sure to continue to maintain your property to ensure code compliance and adequate defensible space. If you are within a high or very high-risk zone, an inspection will be required before close of escrow, and you don't want to be required to conduct all the work and incur all the costs at that time. Also, be sure to disclose all fire hazard information upfront and have the buyer sign down on all disclosures. If not, they may have the ability to come back and renegotiate later on in the process.
Please reach out to us with any specific questions or concerns. We’re always here to help navigate your real estate needs.
Rabello Group