Update ON FIRE INSURANCE IN WILDFIRE AREAS JAN 11 2026

WE CAN HELP

NEW RATES AND COMPANIES 

READ ARTICLE BELOW

Nevada County, and indeed more than a few counties in California escaped from a significant wildfire event in 2025. Not to say we were totally fire free, but a 10,000-structure destruction we didn’t see. 131,000 acres of mostly uninhabited land were destroyed in the Gifford Fire in San Luis Obispo County, destroying only a handful of structures but that was good news compared to what we have seen in the past.

That said, fire insurance rates continue to climb, with our insurance office still getting calls from irate homeowners complaining about higher rates upon renewal.

There is some good news in the insurance arena. Where a year back or so it was difficult to get a lot of competitive quotes on the liability policies, known as a Difference in Conditions Policy (DIC) which piggyback on the California Fair Plan’s (CFP). CFP fire policies are limited in the things they cover, hence the need for the DIC companion policies.  

Some insurance companies, albeit only a handful, are back to writing, or are still writing HO3 policies, and that number seems to be picking up a bit.

HO3 policies are the plans that most of us used to have that cover all perils without having to use the CFP.

The complaint about CFP was that premiums were high and adding in the DIC policy to get complete coverage only added to the expense.

Also having two policies opened up the possibility that there would be some grey areas between the two and an argument about what company covered what might ensue. In my opinion, there is really only one area of overlap that might be contended by either CFP or the DIC policy and that area is if a tree or similar object hits your house. Since the DIC covers falling objects and CFP covers windblown damage, I saw more than one example of this arguable offense. A tree came down in my yard and hit something, and when I called my DIC company, they told me to go to CFP as they thought the wind caused the tree to fall. CFP, being no dummies, looked up the wind history of that day and there was no such wind. I went back to my DIC company and they capitulated and paid the claim. Not so with a friend of mine who went through the same exercise, except when he called the DIC company the second time to give them CFP’s wind history, the DIC company claimed, “Act of God” and denied the claim.

Goes to show not all is cut and dry when it comes to insurance and obviously some companies are better than others.

In any case, having one policy eliminates that possibility of conflict and the one type of policy that covers all common perils is the HO3 policy.

Getting an HO3 may help solve the potential conflict between having two policies but may not necessarily mean it will be cheaper.

Indeed, I have seen more than once an HO3 premium higher than having both a DIC and a CFP.

It’s a case-by-case situation for sure, but at least I am seeing a bit of movement by a handful of companies wandering into the HO3 markets once again. Even some of the companies that have mass cancelled policies seem to make an exception here or there. You just never know.

In conclusion, I think some insurance agents might buzz me and complain to me that you all started shopping again because of today’s musing and that just adds to the workload of all of us in the business. But hey, now you know the rest of the story, and if that allows but even of few you to save a few bucks, I don’t see the harm in it.

(end)    

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com