After seeing his premiums quadruple in the past three years, Shawn Faircloth wondered if a new wildfire designation could spell yet another insurance hike for his San Juan Capistrano home.
“I’m assuming they will leverage up my rates even more,” said Faircloth, 49, whose home now sits in a “very-high” hazard zone in state wildfire maps released March 24.
Real estate analyst Steve Thomas also noticed that his Ladera Ranch home now sits in a “moderate” fire zone and is just six blocks from a new very-high fire zone.
“Can’t wait to get my new insurance (bill) this coming of November,” he said.
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A five-fold expansion of wildfire hazard zones across Southern California raised homeowner concerns that new state maps could prompt their insurers to raise their rates.
Very-high fire zones in the region grew 26% in maps released last month by the state Forestry and Fire Protection Department, or Cal Fire. When including the moderate and high zones, the region’s fire zones grew 469%.
Are the insurance companies looking? Will they raise rates based on these new maps?
In a word, no.
Insurance trade groups, consumer advocates and state fire and insurance officials were unanimous in this answer: insurance companies have their own maps, or rely on private providers. And those maps are more detailed and up-to-date than the new Cal Fire hazard zones.
“The Cal Fire maps are not what we use to look at our risk,” said Janet Ruiz, Western U.S. representative for the Insurance Information Institute, a national insurance trade association.
“People are nervous about it,” added consumer advocate Amy Bach, executive director of United Policyholders. But, she said, “insurance companies don’t rely on these maps to decide who they’re going to insure and how much they’re going to charge.”
In the first update in at least 14 years, the new maps indicate where the probability of wildfire is greatest in the next 30-50 years. They’re based on such factors as climate, terrain, vegetation type and fire history, but don’t include local or homeowner efforts to reduce fire risk.
The maps show moderate, high and very-high fire hazards in areas protected by city and county firefighters.
Once the maps are adopted by local cities as counties, new regulations will kick in, requiring property owners in the high and very-high fire zones to comply with stiffer, fire-safe building codes.
Sellers must disclose to buyers when their properties are located in high and very-high fire zones. They also must present documentation showing that an inspection was done showing that “defensible space” requirements are met. And everyone in the very-high zones must maintain 100 feet of fire-safe landscaping around structures.
Oregon uprising
Similar maps sparked a homeowner uprising in Oregon in 2022.
“A tidal wave” of property owner complaints prompted Oregon fire officials to redraw their maps when residents complained about inaccuracies, according to the Oregonian newspaper. Homeowners worried the maps could result in higher insurance rates.
Similar concerns have surfaced in California, said Karen Collins, a vice president with the American Property Casualty Insurance Association.
“We have unfortunately seen a lot of confusion between the role of publicly available hazard maps versus those … risk models used by insurers,” Collins said.
Policymakers develop hazard maps for insight into land use policies, allocation of resources, building codes, real estate hazard disclosures, and ways to reduce wildfire risks, Collins and others said. Fire departments use them to pinpoint where to prioritize resources.
Insurance models, however, are meant to show carriers where the risk of fire is greatest and the extent of damage it could cause, Collins said.
Home values unaffected
Another question is whether the new maps will affect home values or the time it takes to sell a home.
Sellers must disclose when their property is in a high fire zone. And buyers in very-high zones take on the added responsibility of clearing brush, reducing dead or dying vegetation and trimming trees.
However, that’s not new, real estate agents say.
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“We’ve been disclosing all sorts of things for years,” said Colin Farris, an agent with Keller Williams Realty in San Clemente. “It’s just one more thing, and I don’t have a problem with it.”
Brush clearance and maintaining defensible space also isn’t new for residents in new fire zones, added Robyn Robinson, a Dana Point real estate agent who sells in San Juan Capistrano. Lenders and insurance companies have required such measures as a condition for renewals.
“We’ve already been experiencing it,” Robinson said. “It’s disappointing. It’s frustrating. But it is not any different than what we’ve been experiencing the last couple of years.”