If you have your finger on the pulse of the insurance marketplace in California it would be flat lining. On Friday the industry received another heavy blow sending it into cardiac arrest.
Effective May 27, 2023, State Farm General Insurance Company®, the provider of homeowners insurance in California, announced that it will no longer accept new applications for property and casualty insurance. This will have an impact on a significant number of pending and future real estate transactions.
This decision was driven by a multitude of factors, including skyrocketing construction costs and inflation, growing catastrophic exposure, and a challenging regulatory and reinsurance market.
However, there is a glimmer of hope and a solution to help individuals and real estate professionals navigate this challenging market, myIQuotes powered by Alta Vista Insurance!
The Importance of Taking Action
The sudden halt in State Farm’s offerings requires immediate action for any real estate professional. To avoid any potential complications, it is crucial to take proactive steps. Here are a few essential tips to keep in mind:
Contact Buyers in Escrow: Reach out to all buyers currently in escrow and ensure that they have selected their hazard or homeowners insurance. It’s important to confirm that they are aware of the changes and ready to explore alternative insurance options.
Seek Alternative Coverage: If any buyer intended to use State Farm for their hazard or homeowners coverage, they will now need to select another insurance company promptly. Time is of the essence, and ensuring seamless insurance coverage is vital to keep the real estate purchase on track.
Act Swiftly on Insurance Contingency: If the insurance contingency has been lifted, the sudden absence of State Farm as an option can significantly impact the closing process. Moving quickly to secure replacement coverage is crucial. However, be aware that it may take longer and cost more than anticipated, so acting promptly is essential.
To help minimize the disruption that this is causing, we recommend myIQuotes, powered by Alta Vista Insurance. Unlike direct insurance providers, they have access to a wide range of insurance carriers currently offering property insurance throughout California.
myIQuotes has a deep understanding of property insurance in high fire areas and can efficiently navigate through the challenges to secure coverage for your clients’ new homes. They have extensive experience working with real estate agents, and we understand the time-sensitive nature of closing escrow. The MYIQuotes team is well-versed in the insurance requirements for new home purchases, ensuring a simple and efficient experience.
If you’re currently facing the dilemma of finding alternative insurance coverage due to State Farm’s exit from the California market, it’s time to take action. Reach out to myIQuotes and let their experienced team guide you through this insurance market. By partnering with myIQuotes, you can mitigate the disruption caused by State Farm’s departure, ensuring smooth and timely closings for your real estate transactions.
If you have your finger on the pulse of the insurance marketplace in California it would be flat lining. On Friday the industry received another heavy blow sending it into cardiac arrest.
Effective May 27, 2023, State Farm General Insurance Company®, the provider of homeowners insurance in California, announced that it will no longer accept new applications for property and casualty insurance. This will have an impact on a significant number of pending and future real estate transactions.
This decision was driven by a multitude of factors, including skyrocketing construction costs and inflation, growing catastrophic exposure, and a challenging regulatory and reinsurance market.
However, there is a glimmer of hope and a solution to help individuals and real estate professionals navigate this challenging market. A great way to prevent any difficulty finding your client’s insurance for their real estate purchase is to partner with an independent agency.
The Importance of Taking Action
The sudden halt in State Farm’s offerings requires immediate action for any real estate professional. To avoid any potential complications, it is crucial to take proactive steps. Here are a few essential tips to keep in mind:
Contact Buyers in Escrow: Reach out to all buyers currently in escrow and ensure that they have selected their hazard or homeowners insurance. It’s important to confirm that they are aware of the changes and ready to explore alternative insurance options.
Seek Alternative Coverage: If any buyer intended to use State Farm for their hazard or homeowners coverage, they will now need to select another insurance company promptly. Time is of the essence, and ensuring seamless insurance coverage is vital to keep the real estate purchase on track.
Act Swiftly on Insurance Contingency: If the insurance contingency has been lifted, the sudden absence of State Farm as an option can significantly impact the closing process. Moving quickly to secure replacement coverage is crucial. However, be aware that it may take longer and cost more than anticipated, so acting promptly is essential.
Amidst the current disruptions in the insurance marketplace, there is a reliable partner that can help both individuals and real estate professionals overcome these challenges. Alta Vista Insurance is dedicated to assisting clients in finding the proper protection for their real estate purchases. Unlike direct insurance providers, Alta Vista Insurance has access to a wide range of insurance carriers currently offering property insurance throughout California. This breadth of options ensures that clients can obtain coverage tailored to their specific needs, even in the wake of State Farm’s withdrawal.
If you’re currently facing the dilemma of finding alternative insurance coverage due to State Farm’s exit from the California market, it’s time to take action. Reach out to Alta Vista Insurance and let their experienced professionals guide you through this insurance market. By partnering with Alta Vista Insurance, you can mitigate the disruption caused by State Farm’s departure, ensuring smooth and timely closings for your real estate transactions.
Contact one of our agents at 888-724-2124 or email quotes@aviains.com
The insurance marketplace in California is undergoing significant changes, and State Farm’s recent decision to cease accepting new applications has sent shockwaves throughout the industry. However, by staying proactive and seeking reliable alternatives, such as working with Alta Vista Insurance, you can successfully navigate these challenging circumstances. Don’t let disruptions hinder your real estate transactions. Take action today and secure the proper protection you need with the help of Alta Vista Insurance.
As a commercial property owner, you want to make sure that your most valuable real estate assets in your portfolio are properly protected. But you also want to make sure that you’re complying with all of your insurance companies guidelines and maintaining your buildings so you can prevent future losses.
The California insurance marketplace has been experiencing unprecedent turmoil over the past few years. California insurance companies have suffered major losses over the last 5 years resulting in billions of dollars in damage due to the catastrophic wildfires and major water losses.
It’s caused many insurance companies to change their underwriting guidelines, increase their rates, no longer accept business in certain locations in the state, and go out of business. We call this a hard market in the insurance industry, and it could last for several years.
One of the best ways to prevent future losses and stay in compliance with your insurance company is to follow specific guidelines when maintaining your property which also mitigates future losses. We’ve gathered research with our top insurance companies to find out what the mandatory requirements are for commercial buildings in California and we’re going to share these tips with you so you can stay out of harm’s way and help prevent any future losses.
As a commercial real estate investor, the last thing you want is an insurance company to decide they no longer want to insure your building due to failing to meet the mandatory requirements, not providing proof of updates to your building, or being out of compliance with certain maintenance issues. If you receive documentation or a renewal questionnaire from your insurance company, return the information to them immediately. You can also give us a call or schedule an appointment with us, and we can review the possible exposures to your building. Here are some of the new mandatory requirements for commercial buildings in California.
Older buildings, built before 1990, may require data and documentation of upgrades to the electrical, plumbing, roofs, and heating.
If your building has Zinsco or Federal Pacific electrical panels and breakers, they need to be replaced. They are old and outdated and have been found to have a defective design that is prone to over-current and arcing, and do not meet underwriting standards anymore. Zinsco panels and breakers are no longer in production and replacement parts have been proven to be unreliable. The panels present an unacceptable life safety and fire hazard. Unfortunately, replacement of these panels is required with most insurance companies.
Installation of GFCI (ground gault circuit interrupter) receptacles must be installed in kitchens, bathrooms, basements, laundry rooms, garages, and on outdoor receptacles. As an alternative GFCI breakers can be installed in the electrical panels to provide protection for these circuits. Remember to consult an electrician to inspection the system and perform repairs that meet the local electrical codes.
Swimming pools need to be fenced and gated with self-locking gates. Gates should automatically close, latch and lock when released. Also, the handle and hardware must be ADA compliant. It must be of a proper height and have a handle on both sides of the gate. No round knobs should be installed.
Fire extinguishers in the building must be fully charged and in good condition. A fire extinguisher maintenance company must service and inspect all fire extinguishers on the property on an annual basis and the service tag should be attached to each unit. Also, there should be no cracked, broken, or missing glass in the fire extinguisher cases.
Railings need to be no less than 42” which is the minimum standard or the current building codes in CA. In the past five inch spacing was allowed, but no longer. Call us if you have questions about this. Make sure that all vertical railings on balconies and stairways are a minimum of 42”.
It’s recommended but not required to prevent water damage the pressure relief valves on the hot water heaters need to be plumbed so they water can exit the building. You can also install drain pains and pressure relief valves plumbed into the pans.
These are some of the new mandatory requirements insurance companies have implemented in California for placing new insurance business and at renewal of a commercial property insurance policy. Many insurers of commercial property in California are sending out renewal questionnaires and reinspecting buildings to make sure commercial property owners are complying with these new requirements. If they identify the building needs repairs, updates, or maintenance they will require the property owner to make the necessary changes to the building to continue coverage or place new business.
As a commercial property specialist, we want to make you are educated on these changes and you have the proper protection for your commercial real estate portfolio. If you have questions or need additional information, click the link below to schedule an appointment with one of our commercial agents.
Homeowners you don’t want to miss this episode. I sat down with Ryan DeHart, owner of Pacific Coast Appliance to talk the basics of home appliance repair. Ryan shares his story about how he started in the appliance repair business and the challenges of starting a business during the pandemic. When one door closes another door opens and Pacific Coast Appliance flourished since most homeowners were, well…home.
I also learned some great tips homeowners can learn to help them properly maintain their appliances and things to look for if appliances need repair. Ryan is very knowledgeable about appliance repair. He takes the time to explain things in detail so you understand what goes wrong and how it can be fixed properly. This was a great conversation with a business owner that is passionate about his craft and helping people solve problems.
If you live in the San Diego area I highly recommend call Pacific Coast Appliance.
For service visit their website. Go to: https://www.pcarepair.com/
Ryan DeHart 619-333-0946 Email info@pcarepair.com
Looking for better homeowners insurance? Contact Alta Vista Insurance.
In this episode I talk with my good friend Alec about the basics of solar when it comes to homeownership. We talk about some important things to know when thinking about adding solar to a home and what to look for when purchasing a home with solar installed.
Alec also shares some great information about other home improvements that can reduce your power usage and out of pocket expenses.
We had a great conversation and I learned a lot about the benefits of solar and ways to be more efficient with our power usage when it comes to residential real estate.
Learn how to properly insure your solar! Setup an appointment and we can review your insurance and help you be financially protected. Looking for a better solution to insure your real estate property? Save money and get a quote today!
In this episode our agent, Seth Arruda talks about some of the serious effects of inflation and construction costs on property insurance. The cost of building has risen and we’re seeing that reflected in new construction, but it can also effect the cost to rebuild, especially after a large catastrophic wildfire.
Update: lumber prices have come down recently but that doesn’t mean they will return to pre-pandemic prices. Also the with inflation and with the additional higher costs involved in building those costs are being passed down to the consumer.
So let’s dive into how the rising costs of building materials and inflation are effecting replacement cost and being properly insured to value.
Want to look at a plan for your personal or commercial insurance? Schedule an appointment!
Renters insurance is a type of policy designed for a property you are renting that provides protection in the event of a sudden or accidental occurrence known as a covered peril. These policies protect your tenants in the event of a loss and include three key benefits: coverage for the person, their belongings and stuff, and additional living expenses. The coverage in the policy is referred to as personal liability, personal property, and loss of use.
In California, not everything is covered under renters insurance, so we’ll show you how each plan can be tailored accordingly to fit your tenant’s lifestyle.
Here’s a great resource you can provide to your tenants to educate them about the importance of renters insurance.
1. Does Renters Insurance Protect Landlords in California?
With renters insurance, landlords can protect themselves and their business against liability from tenant’s negligence. It can also protect you from additional costs due to natural disasters or other occurrences. When your tenants carry renters insurance, they protect themselves and it can add an additional layer of protection which can lead to fewer claims filed.
2. What Does Renters Insurance Cover?
We talked about the three key coverages that renters insurance includes: personal property, liability, and additional living expenses. Personal property will cover your contents and belongings inside the property from a covered peril. Things like clothing, furniture, appliances owned by the tenant, and electronics up to the limits of the policy. In California, a good recommendation is including replacement cost coverage for personal property. This provides full replacement for your tenants’ contents and belongings. Without replacements cost, personal property would be covered on an “actual cash value” basis, which could lead to tenant complaints. Liability is the second most important coverage on a renters policy and is overlooked in most cases. In the event of an accident like a slip and fall or personal injury matter like slander liability coverage will pay for claims that arise if a tenant is found responsible or liable for the injuries. It can also cover accidental damage to someone else’s property caused by a tenant.
This can help landlords and property owners reduce claims to their commercial property insurance and reduce out of pocket expense to their business. Another great reason to require renters insurance from your tenants.
The third coverage is loss of use. This will cover any additional living expenses for your tenant if their unit is damaged and needs repair. Things like, a stay at a hotel, or the cost to sign a temporary lease while the repairs are being completed. In California, it can also cover additional living expenses if your tenants are in a mandatory evacuation zone due to a catastrophic wildfire.
Fire
Fires are a common peril and can happen due to many different reasons. Whether it’s a kitchen fire, a faulty wire, neighbors negligence, or even a wildfire the damage that is caused can devastate a home or apartment building. Some renters insurance plans will cover fires if your tenant is negligible, like if they forgot to blow out a candle or left the stove on. Between the fire and smoke damage your building could cost more to repair than you think.
Water Damage
Water claims are the number one cause of loss in California and a huge pain point for landlords, especially when you own a building with multiple stories or units that share walls with each other. If a pipe bursts behind the walls it can cause major damage to the building and the interior, like your tenants belongings or furniture. Your landlord insurance covers your structure from water damage that is sudden or accidental and renters insurance covers your tenants “stuff” inside their unit.
Earthquakes and Floods
In California earthquakes and floods are catastrophic perils that require separate policies. When we say flood, we’re talking about outside water due to storm surge or rising water, like a tsunami. Earthquakes and seismic activity can cause total losses to buildings and force tenants out of their homes without a place to live. Tenants can also purchase coverage to protect themselves from these natural disasters separate from their standard renters policy. Your landlord insurance will cover your building but it will not cover any property owned by the tenant. That is why renters insurance is a must for your tenants and their policy will cover their belongings and in most cases replace them. Renters insurance with these additions gives landlords and tenants peace of mind that they can recover from a large natural disaster, like an earthquake or flood.
Theft
Having a safe home environment is important to your tenants. Living in an area with security is an important factor when choosing a place to rent. Proper basic protective devices like deadbolts, locks on windows, and even burglar alarms can deter break ins and theft which can reduce damage to the building and filing claims. In the event of a theft, renters insurance can help your tenants replace the items that were stolen. Make sure your tenants document the loss with the proper authorities, that way the renter’s insurance company will pay claims for theft to their property. Tenants can also purchase special coverage for valuable items like jewelry, artwork, guns, and antiques.
Lawsuits
Tenants can be sued for a number of reasons due to their own negligence. A slip and fall accident by a guest or if a tenant is responsible for damaging someone else’s property can lead to liability claims that can be costly and stressful. Requiring renters insurance for your tenants in California can mitigate claims for the landlord if their tenants are responsible for damages or if guests are injured and seeking payment for their pain and suffering.
3. How Renters Insurance Protects Landlords
Rising Cost of Insurance
I think we’ve made good case for making renters insurance a requirement for tenants. It offers many benefits to renters to help them protect themselves while giving landlords another tool to protect their real estate investment. When landlords file claims it can lead to higher insurance premiums and in some cases your policy can be non-renewed if there is a frequency of multiple claims. Requiring tenants to provide renters insurance to protect themselves can reduce your exposure to claims and prevent rising insurance costs.
When landlords require renters insurance from their tenants, it creates an additional layer of protection against liability and additional fees due to catastrophic natural disasters, like wildfires in California, and sudden or accidental occurrences.
Managing risk exposures while reducing out of pocket expenses is very important when reviewing your real estate investment portfolio. If you own an investment property you should be working with an agent that specializes in helping landlords and real estate investors stay informed about potential exposures to their business and protect their real estate investments. Hiring a risk manager like Alta Vista Insurance is a sound business strategy to help you be financially protected, build wealth, and achieve financial freedom.
To book an appointment to talk about your investment property click the link here and let us help you create a plan to protect your real estate portfolio.
Morgan is out the studio. In this episode, my agent, Mark Lamb joins me with Edward Hull from Carlsbad Tax Services, a local tax firm in Carlsbad, California.
We dive into some of President, Joe Biden’s new proposed tax plans and a few different tax strategies that business owners, property owners, and high income earners can take advantage of to keep more money in their pockets.
This is an episode you don’t want to miss!
For the latest up to date tax information contact Carlsbad Tax services and click the button below.
Morgan and Seth are talking investment properties! In this episode they talk about getting into real estate investing, the advantages of buying a multi-family property as a smart first choice, and the best way to insure these types of real estate assets.
Whether you’re a first time homebuyer or real estate investor, it’s important to understand how to be financially protected. Click the video above and watch this episode!
To get a quote for your investment property or if you have a portfolio of properties and need an agent that understands how to properly protect those types of real estate assets in California. Click below and schedule a consultation to talk about making a plan.
Morgan and Seth talk about the crazy week the stock market experienced with the GameStop short squeeze, retail investors and the market manipulation, the real estate market in Southern California and how to protect those assets and why real estate continues to be a healthy and strong investment strategy.
Don’t miss this episode and make sure you like, comment, and subscribe because we love doing this!
