Latest news with #CaliforniaFAIR
Yahoo
27-03-2025
- Business
- Yahoo
‘Don't wait until you get canceled': Bay Area homeowners could lose insurance coverage for having this 1 outdated electrical system — here's why it's a risk and how to stay insured
California homeowners are already struggling to maintain homeowners insurance, as wildfires, extreme weather and aerial drone images can increase the risk of policy cancellation. Now, ABC 7 News reports that Bay Area homes with knob-and-tube wiring — a dated electrical system — face an even greater risk of cancellation. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Americans with upside-down car loans owe more money than ever before — and drivers can't keep up. Here are 3 ways to cut your monthly costs ASAP "If we put it on the application, we are going to get declined," Jerry Becerra, an insurance broker at Heffernan Barbary Insurance Services, told ABC 7 News. "I tell people it's best to be proactive. If you've got knob-and-tube in your building, don't wait until you get canceled." Most homes in San Francisco were built before the 1950s and have knob-and-tube wiring, creating a massive headache for many homeowners. So, why is this a risk? Knob-and-tube (often shortened to K&T) wiring is an outdated electrical wiring system used in homes built from the late 1800s to the mid-20th century, according to the International Association of Certified Home Inspectors. It consists of single-insulated copper wires running through ceramic tubes connected to ceramic knobs installed on wood beams of the home. While it was considered safe when installed, K&T lacks a grounding wire, making it more susceptible to electrical faults and fire hazards, especially when modified or covered with insulation. Many insurers consider it a liability, leading to higher premiums or outright policy cancellations. Without insurance coverage, homebuyers cannot get a mortgage unless they use the California FAIR plan, a last-chance insurance option provided by the state. The FAIR plan is more expensive and offers limited coverage for most homeowners. However, some Californians argue that K&T is safe. John Peters, a long-time electrician, has K&T in his home and insists it's not a problem. "I have it in my house, I'm going to keep it there, I hope, forever," Peters told ABC reporters. Even the fire department reports no increase in risk. ABC 7 News spoke to the fire department, which shared this statement: "The department has not seen trends in knob-and-tube electrical wiring residential structure fires, according to our fire department investigators." However, insurance companies insist K&T is a fire risk and are refusing to cover homes with this type of wiring. Becerra told ABC reporters that homeowners who do nothing to update their knob-and-tube wiring can be sure of one outcome: "They're going to get canceled or declined." Read more: Are you rich enough to join the top 1%? Here's the net worth you need to rank among America's wealthiest — plus 2 ways to build that first-class portfolio If your home still has knob-and-tube wiring, it's best to get ahead of the problem. Start by finding out if insurers are canceling policies for K&T homes in your area. In some states, insurers may offer coverage as long as most of your electrical wiring has been updated, even if some knob-and-tube remains. If you're concerned about coverage or want to reduce your risk, here are some steps to take: Get an inspection: Have a licensed electrician assess your wiring. Some older systems are still safe, but if they are deteriorating or overloaded, replacement may be necessary. Consider upgrading: Replacing K&T with modern wiring can make your home safer and may help you qualify for lower insurance rates or discounts. Some insurers require proof of replacement before renewing coverage. Shop around for coverage: Not all insurers have the same policies regarding K&T wiring. A broker may help you find a provider willing to insure your home while you plan upgrades. Look for other outdated systems: Old plumbing, aging roofs and outdated heating systems can also lead to higher premiums or coverage issues. Addressing these can improve safety and potentially lower insurance costs. Install modern safety features: Smoke detectors, fire extinguishers and whole-home surge protection can help offset insurance concerns and demonstrate that your home is at lower risk. California homeowners should act now — waiting until cancellation could leave you scrambling for coverage or uninsured. If you live in other states, research insurance policies and find out if K&T could cause issues down the road. Addressing problems now can save you money and stress in the long run. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Protect your retirement savings with these 5 essential money moves — most of which you can complete in just minutes This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
CNN
06-02-2025
- Business
- CNN
Allstate expects $1.1 billion loss from California fires
Allstate Insurance says it will pay out $1.1 billion in claims caused by the wildfires that swept through Southern California in January. While the expected payout is significant, Allstate said Wednesday it was able to limit its losses partly by pulling back from the California market. Many insurers, including Allstate, have been canceling homeowners' policies in many areas of California due to growing threat of wildfires — leaving many homeowners with more expensive and often limited alternatives, or with no insurance coverage at all. Allstate's liability is a small fraction of the total insurance claims from the California fires in January: They are expected to come from 16,600 properties and forecast to cost the industry between $35 billion to $45 billion, according to CoreLogic, a research firm that tracks the costs of catastrophes like fires and hurricanes. The company announced the claims figure alongside its fourth-quarter earnings report late Wednesday, though the fires occurred in the first quarter and were not part of those financial results. Allstate recorded $2.1 billion in profit for the fourth quarter, which was up 34% from a year earlier and brought adjusted profit for 2024 to $4.9 billion. That growth came despite catastrophe claims losses of $315 million related to Hurricane Milton in the fourth quarter, and re-estimates for the cost of Hurricane Helene in September. Homeowners throughout California will likely see their homeowners insurance premiums climb in the wake of the fire. Earlier this week State Farm, California's largest insurance provider, requested an emergency interim rate hike averaging 22% for homeowners citing a 'dire' financial situation from the fires. State Farm has received more than 8,700 claims and paid over $1 billion to customers, a number that the company knows will rise, it said in a filing with state insurance regulators. In addition, insurers can now use costs associated with the fires as justification for rate increase requests. For example, the California FAIR plan — the state-created insurer of last resort for homeowners unable to get fire insurance from traditional insurers — is expected to have claims far in excess of its assets. To pay those claims, it will be able to levy an assessment on the state's other insurers. Insurers will now be able to factor in the cost of that California FAIR assessment when seeking rate increases across the state. They also will be able to use the cost of reinsurance, a form of coverage they purchase to backstop their losses, as part of the rate calculations in the state. In the past, the amount insurers paid for reinsurance did not go into rate calculations.
CNN
06-02-2025
- Business
- CNN
Allstate expects $1.1 billion loss from California fires
Allstate Insurance says it will pay out $1.1 billion in claims caused by the wildfires that swept through Southern California in January. While the expected payout is significant, Allstate said Wednesday it was able to limit its losses partly by pulling back from the California market. Many insurers, including Allstate, have been canceling homeowners' policies in many areas of California due to growing threat of wildfires — leaving many homeowners with more expensive and often limited alternatives, or with no insurance coverage at all. Allstate's liability is a small fraction of the total insurance claims from the California fires in January: They are expected to come from 16,600 properties and forecast to cost the industry between $35 billion to $45 billion, according to CoreLogic, a research firm that tracks the costs of catastrophes like fires and hurricanes. The company announced the claims figure alongside its fourth-quarter earnings report late Wednesday, though the fires occurred in the first quarter and were not part of those financial results. Allstate recorded $2.1 billion in profit for the fourth quarter, which was up 34% from a year earlier and brought adjusted profit for 2024 to $4.9 billion. That growth came despite catastrophe claims losses of $315 million related to Hurricane Milton in the fourth quarter, and re-estimates for the cost of Hurricane Helene in September. Homeowners throughout California will likely see their homeowners insurance premiums climb in the wake of the fire. Earlier this week State Farm, California's largest insurance provider, requested an emergency interim rate hike averaging 22% for homeowners citing a 'dire' financial situation from the fires. State Farm has received more than 8,700 claims and paid over $1 billion to customers, a number that the company knows will rise, it said in a filing with state insurance regulators. In addition, insurers can now use costs associated with the fires as justification for rate increase requests. For example, the California FAIR plan — the state-created insurer of last resort for homeowners unable to get fire insurance from traditional insurers — is expected to have claims far in excess of its assets. To pay those claims, it will be able to levy an assessment on the state's other insurers. Insurers will now be able to factor in the cost of that California FAIR assessment when seeking rate increases across the state. They also will be able to use the cost of reinsurance, a form of coverage they purchase to backstop their losses, as part of the rate calculations in the state. In the past, the amount insurers paid for reinsurance did not go into rate calculations.
