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Tierrasanta condo owners sound off after Farmers Insurance cancels policy

Wildfire risk assessment led to property insurance not being renewed for entire complex.

SAN DIEGO — More than 300 condo owners in Tierrasanta are scrambling to find property insurance after Farmers Insurance cancelled their policy because of wildfire risk.

Now, the Villa Monterey condominium owner’s association is trying to find insurance on the secondary market, which may come at a cost of $7,000 annually per condo owner.

Residents packed into a crowded clubhouse Tuesday night for an informational, townhall meeting.

“I’m a senior citizen living on a fixed income, and I have a budget. That's how I survive,” said owner Allyson Brenner, a retiree who said she has lived in the Villa Monterey complex for 30 years.

“Right now, I’m not a wage earner. I'm 74 years old and I can't go out and get a job to supplement this income. I live alone,” she said.

WATCH: Villa Monterey condo owners sound off at townhall meeting

Farmers Insurance recently decided not to renew the $127 million insurance policy that covered property and wildfire damage for the entire complex.

Farmers recently canceled property insurance for a 240-unit condo complex in Rancho Penasquitos called Canyon Park Villas, according to the Union-Tribune.

A resident who wanted to remain anonymous emailed CBS 8 to report that Farmers also canceled property insurance in the 338-unit Morada complex in Rancho Bernardo.

“The new policy our HOA has secured is anemic – it only covers approximately 1/8 of the replacement cost of our $80 million dollar infrastructure and, unless we can find a replacement policy, it will cost our HOA (about) 1 million dollars in 2023. This will mean a HUGE special assessment for each homeowner unit,” the Morada condo owner reported.

Experts said it all comes down to wildfire risk.

“Since 2017, the insurance carriers have paid out, like, two times what the Northridge earthquake cost,” said Kimberly Lilley, an insurance agent and member of the Community Associations Institute, a trade group that advocates for condo owner’s associations.

Lilley said large insurance companies, such as Farmers, recently updated their modeling programs that assess wildfire risk. As a result, they are dumping out of the market.

“It's heightened risks. There's no doubt, based on the catastrophe modeling, that wildfires cost more every time they happen now,” Lilley said.

One possible solution, Lilley said, would be to separate wildfire insurance from the main property insurance policy.

“Wildfire would be very much like an earthquake, it would be a catastrophic coverage that you can opt-in for or out of,” she said.

Then, higher deductibles could be set for the wildfire portion of the insurance coverage.

“So, instead of the normal $5,000 or $10,000 deductible that associations usually have right now, they would say for wildfire, it's a $25K, $50K, or even a $100,000 deductible. Then, they can price a very low (cost) policy for the association that can cover everything they need to be covered for,” Lilley said.

In Tierrasanta, the Villa Monterey condo association also suggested that individual condo owners pay for their own property insurance, inside and out, unit by unit.  That CC&R change would have to be approved, however, by a vote of the condo owners.

“Now that I'm retired, I should be happy, go lucky, and enjoying life,” said Brenner, the long-time Villa Monterey condo owner.  “Right now, this is a terrible burden on me.”

A vote is expected that would allow the COA to shift the insurance responsibility from the association to each individual homeowner.  

WATCH RELATED: Farmers Insurance cancels policies for 300+ homes in Tierrasanta (Jan. 2023).



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