FRESNO, Calif. (FOX26) — Premiums for building insurance are exploding again.
According to Insurify, a group that compares insurance rates, rates in the U.S. have risen 6% this year alone, after already increasing nearly 20% over the past two years.
Homeowners complain that it is becoming increasingly difficult to keep their homes.
“Other retirees like me will eventually have to look for a second or different job,” said homeowner and landlord Victor Mendoza.
This is partly because the cost of building insurance continues to skyrocket.
In California, an overall increase of 8% is expected by the end of the year.
Landlords like Mendoza are now wondering why this is the case.
“Okay, everything is up to code. Everything is fine. They all have their smoke detectors. They all comply with California code and city code,” he said. “I have fire extinguishers in most of my houses. What else can I do to keep my insurance premiums from going down?”
Most major insurance companies such as Allstate, State Farm and Liberty Mutual have either withdrawn from the California home insurance market or are discontinuing their policies.
In a statement in March, State Farm said the decision was made “after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe risks, reinsurance costs and the constraints of decades-old insurance regulations.”
Their excuse is, first of all, the wildfires. Well, I don’t live in a forest, and secondly, property taxes on land, real estate and houses in California have gone up so much that it’s no longer worth it for them to take out policies,” Mendoza said.
He said he is now limited to a small group of insurance companies that would charge a fortune to insure a home in California.
“It’s really unfortunate because everything else is going up,” Mendoza said. “Your PG&E costs are going up, your insurance is going up, our property taxes are going up, your home payments are going up.”
He said that with this development, homeowners would not be able to live the way they had imagined.
“This means having to make cuts or even sell your property,” says Mendoza.
Mendoza said he and his neighbors called the California Insurance Commissioner’s office to complain about insurance in the state and never received a response.
FOX26 reached out to California Commissioner Ricardo Lara’s office to ask why rates continue to skyrocket.
A spokesman for the Commissioner sent us a statement saying:
Commissioner Lara’s Sustainable Insurance Strategy addresses decades of neglected issues and outdated regulations that have led to the insurance crisis facing many Californians. The impacts of climate change are accelerating, and the Department is taking actions to increase the availability of insurance over the next 10 years. Our goal is to create a modern, sustainable insurance market that promotes safety and reduces risk rather than retreating from high-risk areas; instead, we are pursuing a long-term strategy to continue providing insurance coverage to consumers. We are doing this by streamlining the rate application process, implementing risk management tools such as catastrophe modeling and net cost of reinsurance, requiring commitments from insurance companies to offer new and expanded coverage in more areas of our state, particularly wildfire-affected areas, and by strengthening the FAIR Plan.
