Revised Fire Ratings Spike Insurance Rates
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
May 18th, 2009
A local insurance agent form AAA discussed changes in Shasta County fire ratings and the impact on insurance rates with a group of Realtors recently. Fire districts are assigned a number between 1 and 10 which determines, in part, how much a homeowner will pay for a fire policy. The lower the number, the less you will pay for insurance. Due in part to changes in staffing at fire departments, training, firefighting equipment and water pressure to hydrants, these ratings are reviewed and adjusted periodically.
Redding has a rating of 3. This is considered very good. Anderson recently saw their rating increase to 5. This was due to cutbacks in staffing and taking into account full-time firefighters vs. part-time or volunteer staffs. Anderson residents will have their insurance rates increase if their rating increases any further according to the agent discussing these ratings.Shingletown is rated a 9. Anyone purchasing property in this area can expect to pay a premium for living in a high fire hazard zone and having a volunteer fire department.
Buyers are strongly encouraged to obtain rate quotes on a property they are considering purchasing. The purchase agreement specifically allows the buyer to cancel the contract if the cost to insure the property is unacceptable to the buyer. Besides the fire rating for a specific location, insurance underwriters consider the following when setting insurance premiums:
- Size of the home and type of construction which help determine replacement cost
- Roofing material
- Proximity to a fire hydrant
- Age of home
- Whether the home is equipped with fire sprinklers
- Whether the home has a fireplace
Some insurance companies will not insure log homes. Most will not write new policies if wildfires are currently burning in the area. This was a problem last summer when wildfires burned for several weeks around the Redding area.
Homeowners insurance premiums typically start at about $400/year for a brand new home within the city limits with a fire rating below 6. Once you move outside the city limits, premiums can soar over $1,000 and reach $2,000 or more for large homes in high fire danger locations.
Other variables that can raise premiums or cause a denial of coverage include:
- Swimming pools
- Vicious dogs
- Storing guns in the home
- Bad credit
I always ask my home buyers to obtain several insurance quotes soon after entering an agreement to purchase a home. Another reason to get a quote is the insurance company will review the claims history kept in a national data base for the property which could divulge serious problems the seller has had with the home where a claim was made. Contact me if you have any questions.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
