News

'Very scary, very frustrating': Insurance companies are dropping Portola Valley homeowners over wildfire risk

Portola Valley Mayor Maryann Derwin stands on her property looking out at the dry terrain in Portola Valley on Aug. 3, 2021. Photo by Magali Gauthier.

Tobias Freccia checked his mailbox three months ago to find a startling note: Nationwide would not renew his homeowners insurance for the coming year. He scrambled to find a new insurer.

Freccia is not alone. He is on a growing list of Portola Valley residents who are seeing their homeowners insurance rates rise or are simply facing nonrenewal. Residents are trading stories of losing their home insurance, which many attribute to the insurance companies' concerns about being able to cover wildfire risk to homes in wildland-urban interfaces like Portola Valley, on PV Forum, the online forum for residents. (Town officials say they only have a spotty headcount on how many residents have lost their homeowners insurance. They've asked asked residents to contact the town if they do, said Town Manager Jeremy Dennis.)

Residents in Portola Valley are sharing stories of losing their homeowner's insurance on the town's online forum. Via Google Maps.

Insurance companies are becoming wary of insuring homes in the wake of a slew of wildfires in the West. The state's drought isn't helping concerns about fire risk. Six of California's 10 largest wildfires since 1932 were in 2020, according to the California Department of Forestry and Fire Protection. Those six fires burned more than 3 million acres, damaged or destroyed over 7,000 structures and killed 22 people, according to Cal Fire.

The state has stepped in to protect residents' home insurance policies. Nearly 2.4 million home insurance policyholders in California now fall under a one-year moratorium against nonrenewal of residential property insurance coverage in the wake of 2020 wildfires. Although near to last year's destructive CZU Lightning Complex fires, Portola Valley is excluded from the state's moratorium.

The Red Barn, a landmark in the La Honda Creek Open Space Preserve, is obscured in smoke on Aug. 23, 2020. Photo by Kate Bradshaw.

A Westridge resident of nine years, Freccia was forced to enroll in the California FAIR Plan, paying $9,000 for fire insurance and $3,000 for homeowners insurance from Farmers (which would not insure him for fire insurance) annually. The plan was established to meet the needs of California homeowners unable to find insurance in the traditional marketplace, and the number of households buying coverage from the program increased by more than 50% between the start of 2019 and June 2020, to almost 200,000 households, according to a September 2020 New York Times article.

What's local journalism worth to you?

Support Almanac Online for as little as $5/month.

Join

The only company that would include fire insurance in Freccia's homeowners plan wanted to charge $34,000.

"It's very scary, very frustrating," he said. He lost his homeowners insurance two years ago after a home remodel as well. "It makes you feel a little bit helpless."

Banks won't hold your mortgage if you go without homeowners insurance, so Freccia didn't even consider going without. He's not thrilled about enrolling in the state's home insurance policy, noting that the limit of what the plan will cover is lower — closer to $2 million, when his home is worth about $3 million.

"We do the best we can to mitigate any fire," he said. "It's very distressing considering homeownership tends to be one of the better assets people have. It could be pretty devastating (if his home is destroyed in a wildfire) because we wouldn't be able to rebuild on the property; we’d have to cover part of it out of pocket."

There is severe risk of wildfire in several neighborhoods of Portola Valley, a woodland town abutting the Santa Cruz Mountains, according to 2008 analysis. A map prepared that year by Ray Moritz, a consultant in mapping fire-prone vegetation, indicates that threats rated "very high" exist in some Portola Valley neighborhoods, and threats deemed "high" exist in many others, based on the proximity and topography of fire-prone forested areas.

Stay informed

Get daily headlines sent straight to your inbox in our Express newsletter.

Stay informed

Get daily headlines sent straight to your inbox in our Express newsletter.

The "very high" fire risk label affects new home construction, requiring the use of ignition-resistant materials and fire-safe landscape management. In 2009, residents complained that the label could negatively impact their insurance rates.

The cancellations are not entirely new: A look back at Town Council meeting minutes shows residents have complained about the topic for years.

Anne Ashmead, who has lived near Woodside Priory School since 1996, was surprised when Nationwide sent her a letter in May stating that it would not renew her homeowners insurance because the company was not willing to cover properties worth more than $1.5 million.

"I was just like, 'What? why?'" Her insurance agent told her many insurance companies are declining to insure homeowners in the area. She's now looking at paying about 30% more for insurance.

Jack Troedson, who's lived in the Alpine Hills neighborhood for 32 years, also learned Nationwide would not renew his homeowners insurance when it expired in mid-August. There was no explanation in the letter, but his insurance broker said it was because of the wildfires in California.

"All of us, seeing the fires over the last several years, were wondering 'What's this going to mean for fire insurance?'" he said.

His insurance broker found him another policy, which was twice as expensive. He declined it. He found a comparable homeowners insurance plan — through State Farm — that is slightly less expensive than his plan through Nationwide.

"The good news is we've got coverage, but bad news is we had to go through the hassle," he said. "My concern is next year State Farm pulls out; it depends on how it shakes out with fires in the fall."

Former Councilwoman Ann Wengert has lived in central Portola Valley for 22 years. In early January, she received notice that Nationwide would not renew her homeowners insurance when the policy expired in July; this was the first time she faced nonrenewal.

So many things have been evolving and changing in each year. If COVID has taught us anything it's that Plan B is the way of the world.

-Ann Wengert, Portola Valley resident, former councilwoman

"I wasn't terribly surprised," she said, noting the letter didn't include specifics on why her plan was being terminated. "With the scale and number around town anecdotally, indicating it's beginning to be more common. … I knew it wasn't worth changing their mind. Insurance companies usually make these changes based on regional issues."

She moved to USAA. Wengert says she doesn't see this trend changing.

"So many things have been evolving and changing in each year," she said. "If COVID has taught us anything it's that Plan B is the way of the world."

Mayor finds nonrenewal 'capricious' and 'unethical'

Portola Valley Mayor Maryann Derwin stands on her property surrounded by dry terrain in Portola Valley on Aug. 3, 2021. Photo by Magali Gauthier.

Portola Valley Mayor Maryann Derwin, who lives in the Westridge neighborhood, lost her homeowners insurance twice in the last year. In March 2020 she received a letter from Safeco Insurance saying that her policy would not be renewed, leaving her three months to find a new carrier.

"I spoke with a community member who received the same letter a month earlier and was appealing the decision to no avail," she said in an email. "My broker worked to find a new insurer, but the pickings were slim: I could choose between a surplus line's insurer such as Scottsdale or Lloyds of London, or the California FAIR Plan known as insurance of the last resort, offering basic fire insurance for those who have (been) rejected by traditional insurance companies."

At that time, the maximum coverage through the FAIR Plan was $1.5 million, but has since been increased.

"At the last minute my broker figured out that Nationwide had rejected me because of an alleged (wood) shake roof; I do not have a shake roof, so she applied again, and they would write me a policy if I agreed to install a central alarm system and bundle my homeowner's insurance with my auto and umbrella policies," she said.

A year later, she received the dreaded letter from Nationwide saying it was not going to renew her policy because the value of her house exceeded Nationwide's maximum coverage. Her home is classified as a "high value house in brush." The decision felt "capricious" and "unethical" because Nationwide hadn’t even insured her for a full year before dropping her like a "bad habit."

"This time my broker was told that I was not eligible for a CA Fair Plan policy unless a surplus lines insurer had rejected me, putting me in the unenviable position of facing a very expensive policy with less coverage than I had with Safeco or Nationwide," she said. "So, she tried one more option, calling a friend at a State Farm agency who agreed to look at my property. After a rather exhaustive set of questionnaires, forms, phone calls and visits, State Farm agreed to insure me. As with Nationwide, I had to move my auto and umbrella policies."

The town's Wildfire Preparedness Committee has been studying this insurance issue for a few years now. This spring, Dennis spoke with state Insurance Commissioner Ricardo Lara, who was sympathetic but said there are limits as to what he can do to help since he cannot mandate a moratorium on nonrenewals of homeowners insurance policies; only the state Legislature can do that, and those in the know say it is not going to happen, according to Derwin.

Derwin encourages community members to reach out to Lara's office to document the loss of their homeowners policies.

"I am concerned that there will come a time when fire insurance will be a supplemental policy just like earthquake insurance — costly and minimal in coverage — causing property owners to essentially self-insure," she said. "That along with sky high home prices, will destine Portola Valley to become an even more exclusive enclave for the rich and to me, that is heartbreaking. This is not who we are, or perhaps more accurately stated, this is not who we used to be."

A front row seat to local high school sports.

Check out our new newsletter, the Playbook.

Follow AlmanacNews.com and The Almanac on Twitter @almanacnews, Facebook and on Instagram @almanacnews for breaking news, local events, photos, videos and more.

'Very scary, very frustrating': Insurance companies are dropping Portola Valley homeowners over wildfire risk

by / Almanac

Uploaded: Wed, Aug 25, 2021, 11:27 am

Tobias Freccia checked his mailbox three months ago to find a startling note: Nationwide would not renew his homeowners insurance for the coming year. He scrambled to find a new insurer.

Freccia is not alone. He is on a growing list of Portola Valley residents who are seeing their homeowners insurance rates rise or are simply facing nonrenewal. Residents are trading stories of losing their home insurance, which many attribute to the insurance companies' concerns about being able to cover wildfire risk to homes in wildland-urban interfaces like Portola Valley, on PV Forum, the online forum for residents. (Town officials say they only have a spotty headcount on how many residents have lost their homeowners insurance. They've asked asked residents to contact the town if they do, said Town Manager Jeremy Dennis.)

Insurance companies are becoming wary of insuring homes in the wake of a slew of wildfires in the West. The state's drought isn't helping concerns about fire risk. Six of California's 10 largest wildfires since 1932 were in 2020, according to the California Department of Forestry and Fire Protection. Those six fires burned more than 3 million acres, damaged or destroyed over 7,000 structures and killed 22 people, according to Cal Fire.

The state has stepped in to protect residents' home insurance policies. Nearly 2.4 million home insurance policyholders in California now fall under a one-year moratorium against nonrenewal of residential property insurance coverage in the wake of 2020 wildfires. Although near to last year's destructive CZU Lightning Complex fires, Portola Valley is excluded from the state's moratorium.

A Westridge resident of nine years, Freccia was forced to enroll in the California FAIR Plan, paying $9,000 for fire insurance and $3,000 for homeowners insurance from Farmers (which would not insure him for fire insurance) annually. The plan was established to meet the needs of California homeowners unable to find insurance in the traditional marketplace, and the number of households buying coverage from the program increased by more than 50% between the start of 2019 and June 2020, to almost 200,000 households, according to a September 2020 New York Times article.

The only company that would include fire insurance in Freccia's homeowners plan wanted to charge $34,000.

"It's very scary, very frustrating," he said. He lost his homeowners insurance two years ago after a home remodel as well. "It makes you feel a little bit helpless."

Banks won't hold your mortgage if you go without homeowners insurance, so Freccia didn't even consider going without. He's not thrilled about enrolling in the state's home insurance policy, noting that the limit of what the plan will cover is lower — closer to $2 million, when his home is worth about $3 million.

"We do the best we can to mitigate any fire," he said. "It's very distressing considering homeownership tends to be one of the better assets people have. It could be pretty devastating (if his home is destroyed in a wildfire) because we wouldn't be able to rebuild on the property; we’d have to cover part of it out of pocket."

There is severe risk of wildfire in several neighborhoods of Portola Valley, a woodland town abutting the Santa Cruz Mountains, according to 2008 analysis. A map prepared that year by Ray Moritz, a consultant in mapping fire-prone vegetation, indicates that threats rated "very high" exist in some Portola Valley neighborhoods, and threats deemed "high" exist in many others, based on the proximity and topography of fire-prone forested areas.

The "very high" fire risk label affects new home construction, requiring the use of ignition-resistant materials and fire-safe landscape management. In 2009, residents complained that the label could negatively impact their insurance rates.

The cancellations are not entirely new: A look back at Town Council meeting minutes shows residents have complained about the topic for years.

Anne Ashmead, who has lived near Woodside Priory School since 1996, was surprised when Nationwide sent her a letter in May stating that it would not renew her homeowners insurance because the company was not willing to cover properties worth more than $1.5 million.

"I was just like, 'What? why?'" Her insurance agent told her many insurance companies are declining to insure homeowners in the area. She's now looking at paying about 30% more for insurance.

Jack Troedson, who's lived in the Alpine Hills neighborhood for 32 years, also learned Nationwide would not renew his homeowners insurance when it expired in mid-August. There was no explanation in the letter, but his insurance broker said it was because of the wildfires in California.

"All of us, seeing the fires over the last several years, were wondering 'What's this going to mean for fire insurance?'" he said.

His insurance broker found him another policy, which was twice as expensive. He declined it. He found a comparable homeowners insurance plan — through State Farm — that is slightly less expensive than his plan through Nationwide.

"The good news is we've got coverage, but bad news is we had to go through the hassle," he said. "My concern is next year State Farm pulls out; it depends on how it shakes out with fires in the fall."

Former Councilwoman Ann Wengert has lived in central Portola Valley for 22 years. In early January, she received notice that Nationwide would not renew her homeowners insurance when the policy expired in July; this was the first time she faced nonrenewal.

"I wasn't terribly surprised," she said, noting the letter didn't include specifics on why her plan was being terminated. "With the scale and number around town anecdotally, indicating it's beginning to be more common. … I knew it wasn't worth changing their mind. Insurance companies usually make these changes based on regional issues."

She moved to USAA. Wengert says she doesn't see this trend changing.

"So many things have been evolving and changing in each year," she said. "If COVID has taught us anything it's that Plan B is the way of the world."

Portola Valley Mayor Maryann Derwin, who lives in the Westridge neighborhood, lost her homeowners insurance twice in the last year. In March 2020 she received a letter from Safeco Insurance saying that her policy would not be renewed, leaving her three months to find a new carrier.

"I spoke with a community member who received the same letter a month earlier and was appealing the decision to no avail," she said in an email. "My broker worked to find a new insurer, but the pickings were slim: I could choose between a surplus line's insurer such as Scottsdale or Lloyds of London, or the California FAIR Plan known as insurance of the last resort, offering basic fire insurance for those who have (been) rejected by traditional insurance companies."

At that time, the maximum coverage through the FAIR Plan was $1.5 million, but has since been increased.

"At the last minute my broker figured out that Nationwide had rejected me because of an alleged (wood) shake roof; I do not have a shake roof, so she applied again, and they would write me a policy if I agreed to install a central alarm system and bundle my homeowner's insurance with my auto and umbrella policies," she said.

A year later, she received the dreaded letter from Nationwide saying it was not going to renew her policy because the value of her house exceeded Nationwide's maximum coverage. Her home is classified as a "high value house in brush." The decision felt "capricious" and "unethical" because Nationwide hadn’t even insured her for a full year before dropping her like a "bad habit."

"This time my broker was told that I was not eligible for a CA Fair Plan policy unless a surplus lines insurer had rejected me, putting me in the unenviable position of facing a very expensive policy with less coverage than I had with Safeco or Nationwide," she said. "So, she tried one more option, calling a friend at a State Farm agency who agreed to look at my property. After a rather exhaustive set of questionnaires, forms, phone calls and visits, State Farm agreed to insure me. As with Nationwide, I had to move my auto and umbrella policies."

The town's Wildfire Preparedness Committee has been studying this insurance issue for a few years now. This spring, Dennis spoke with state Insurance Commissioner Ricardo Lara, who was sympathetic but said there are limits as to what he can do to help since he cannot mandate a moratorium on nonrenewals of homeowners insurance policies; only the state Legislature can do that, and those in the know say it is not going to happen, according to Derwin.

Derwin encourages community members to reach out to Lara's office to document the loss of their homeowners policies.

"I am concerned that there will come a time when fire insurance will be a supplemental policy just like earthquake insurance — costly and minimal in coverage — causing property owners to essentially self-insure," she said. "That along with sky high home prices, will destine Portola Valley to become an even more exclusive enclave for the rich and to me, that is heartbreaking. This is not who we are, or perhaps more accurately stated, this is not who we used to be."

Comments

CyberVoter
Registered user
Atherton: other
on Aug 25, 2021 at 3:14 pm
CyberVoter, Atherton: other
Registered user
on Aug 25, 2021 at 3:14 pm

This Wildfire insurance issue raises two questions:
1) Why isn't CA taking a much more proactive approach to Wildfires
- Taxpayers are spending $ Billions on studies, reports, small projects & bureaucracy
- Instead we should be active managing the forests (tinder elimination, controlled burns, etc.) & pre-positioned equipment
- The Governor & CAFIRE say the right words & accomplish little to solve the problem
2) Who should pay to subsidize the true cost of the Wildfire insurance in fire prone areas?
- The other CA taxpayers who live elsewhere?
- Those who live in the Wildfire prone areas?

In any case, we need real action now that can make a change now. Stop blaming the immediate problem on Climate Change & solve the problem now.


Kevin
Registered user
Menlo Park: South of Seminary/Vintage Oaks
on Aug 25, 2021 at 3:32 pm
Kevin, Menlo Park: South of Seminary/Vintage Oaks
Registered user
on Aug 25, 2021 at 3:32 pm

I totally feel for folks affected by the changing fire, flood and quake maps, plus the knock-on effects on home insurance. At the same time, I know that a changing climate is going to force us to adapt to the inevitable nature-imposed changes.




Stan
Registered user
Portola Valley: Los Trancos Woods/Vista Verde
on Aug 25, 2021 at 3:33 pm
Stan, Portola Valley: Los Trancos Woods/Vista Verde
Registered user
on Aug 25, 2021 at 3:33 pm

Seems like Nationwide is at the heart of many of these cancellations. I got the same cancellation from them in May. Got renewed through from State Farm.
In the process the Nationwide rep tried to set me up with a very expensive covered very little plan through Scottsdale. In reading some of the paper work discovered that Scottsdale is a part of Nationwide. Talk about questionable ethics!!!!!
The same excuse of not wanting to insure anything over $1.5 mill was put forth not fire risk. Lets just say we might be better off with Nationwide NOT! being on our side


Ulrich Aldag
Registered user
Portola Valley: Central Portola Valley
on Aug 25, 2021 at 5:01 pm
Ulrich Aldag, Portola Valley: Central Portola Valley
Registered user
on Aug 25, 2021 at 5:01 pm

Mayor Derwin’s “heartbreaking” concerns that Portola Valley will be “destined to become an even more exclusive enclave for the rich” reveal a socialist agenda rather than addressing the fact that Portola Valley has to get its act together to increase its wildfire resistance.
She has been personally pushing additional housing development (ADU’s and the Wedge Project) as if this has nothing to do with an increased fire hazard for the town. Her Town Council has no dependable concept for an evacuation, and no concept how fire load in critical areas of the town shall be removed. Important planning for a wildfire event is long overdue. The insurance problems are only the tip of an iceberg of issues that should have been addressed with high priority by the Town Council. It’s still time but maybe it’s also time for a new mayor.


Time for a RECALL?
Registered user
Portola Valley: Central Portola Valley
on Aug 25, 2021 at 6:27 pm
Time for a RECALL?, Portola Valley: Central Portola Valley
Registered user
on Aug 25, 2021 at 6:27 pm

Question—can we recall our town representatives? The Stanford wedge project is moving forward, yet little is being done in regards to fire safety. Might be time to think about the best options


Peter Carpenter
Registered user
Menlo Park: Park Forest
on Aug 27, 2021 at 11:45 pm
Peter Carpenter, Menlo Park: Park Forest
Registered user
on Aug 27, 2021 at 11:45 pm

Property owners in wildland areas owe it to themselves, their insurance companies and, most importantly, to the firefighters who risk their lives protecting our homes to remove ALL ground cover and ALL ladder fuels, to have accessible driveways with space for fire engine turnarounds and Knox Box access to structures so that firefighters can shelter in place if there is a blow up.

I see very little of that level of preparation in Portola Valley.

If you don’t have a defendable property do not expect firefighters to risk their lives in a futile attempt to save your home.

former USFS Redding Smokejumper


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Post a comment

In order to encourage respectful and thoughtful discussion, commenting on stories is available to those who are registered users. If you are already a registered user and the commenting form is not below, you need to log in. If you are not registered, you can do so here.

Please make sure your comments are truthful, on-topic and do not disrespect another poster. Don't be snarky or belittling. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

See our announcement about requiring registration for commenting.