As millions of home owners are finding out, insurance on their most valuable possession… their homes… is either too expensive or not available. Insurers’ losses due to natural disasters such as wildfires, floods, rising tides and high winds has caused them to curtail sales of these “HO” policies; State Farm even pulled out of the homeowner market in California but has recently changed course and is offering some policies at a 20% premium increase which was just approved by the CA Department of Insurance in its attempt to get coverages on the market. (I’m told State Farm asked for a 29% increase.)
Now, there is the California “Fair Plan” for insurance customers. It was conceived as a means of last resort for HO’s and at low rates. In approving new rates for insurers the Department is aiming at getting more homes covered.
Assembly Bill 1867 was just introduced to lessen the sting of high premiums by allowing a tax deduction on insurance premiums for the next five years; it applies to the primary residence… not second homes or investment properties; these may include short term rentals.
The bill will undergo hearings in the coming months and will, if passed by the Assembly and Senate and then signed by the Governor, become effective upon his signature as an “urgency statute”. Of course, every bill may be amended at any time so things can change!
HOALaws will ensure that you are kept informed on this measure.
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