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Wildfire Risk — Staggering Costs & Insurance Implications

Posted By Administration, Tuesday, February 13, 2018

The real estate website Redfin has put together some frightening data on the value of homes at risk in the West from wildfire. The value of homes threatened is a staggering $1.5 trillion. Another critical statistic. That figure is 7.7% of the total value of all homes in the U.S.

That leads to the question why. The counties most at risk are Los Angeles County, Orange County and Santa Clara County and they are among the most expensive housing markets in the country. Plus, all three counties are struggling with housing inventory shortages.

“People who are still in shock from losing their homes and possessions from the October fires are greeting one another at open houses while comparing notes on the hotels or rentals where they are temporarily living,” the report said.

Looking at the nation’s top-10 counties with homes for wildfire risk we find seven of the 10 in PIA Western Alliance state of California and one is in the PIA Western Alliance state of Nevada’s Clark County.

“California is so predominant in the ranking not only because of the state’s high frequency of wildfires, but also because of its desirable, expensive housing markets,” Redfin said. “If demand for homes in these places doesn’t subside, inventory shortages and affordability crises in these places will likely continue as wildfires inevitably destroy more homes each year,” the report said.

The top 10 counties for wildfire loss risk are:

1.    Los Angeles County, Calif.

2.    Orange County, Calif.

3.    Santa Clara County, Calif.

4.    San Diego County, Calif.

5.    Harris County, Texas

6.    Riverside County, Calif.

7.    San Bernardino County, Calif.

8.    Dallas County, Texas

9.    Ventura County, Calif.

10. Clark County, Nev.


And wildfire risk or not, Redfin Santa Rosa Agent Starling Sholz says people are still gobbling up homes in those areas. “People view wildfire risk as a price of living in California that’s well worth the rewards — beautiful weather, nature and well-paying jobs,” Sholz said.

All this is nice but it — says Redfin Santa Barbara agent John Venti — leads to sticker shock when buyers get the insurance bill.

“It’s important to get a fire insurance quote before falling in love with a home. We’ve had people and properties receive exorbitantly high quotes for fire insurance. Others were flat-out denied coverage because the home was too risky or the buyer had a large outstanding claim from a previous fire. California FAIR Plan property insurance may be able to provide insurance for homes that have been denied coverage,” he said.


Source link: Insurance Business America

Tags:  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News  Wildfire Risk — Staggering Costs & Insurance Impli 

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