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Farmers cancels insurance for 115 homeowners in Scripps Ranch

The insurance company has told residents they are not renewing policies due to wildfire risk.

SAN DIEGO — More condominium owners are coming forward after not being renewed by Farmer Insurance due to wildfire risk.

The Village Woods complex in Scripps Ranch with 115 condos is the latest to be dropped.

Some HOAs are now considering changing their by-laws to allow individual condo owners to carry their own property insurance. Other HOAs are looking at more expensive policies on the secondary market.

“Our total premium went from $50,000 a year to almost $800,000 a year,” said Dave Sloat, a condo owner in the Scripps Ranch complex.

The Village Woods, $32 million policy covered exterior damage to the entire complex before it was cancelled.

A replacement policy – cobbled together on the secondary market – could now cost each owner an additional $500 per month.

“In addition to our premium going up by 16 times, our deductible has gone from $10,000 per incident to $250,000 per incident,” said Sloat.

The HOA already is seeing the effects. Because of the higher deductible on the replacement policy, the HOA is going to have to use its own reserves to pay for damage to two garages, destroyed last month when two eucalyptus trees fell on them.

But wildfire is the reason why the property insurance policies are not being renewed.

As CBS 8 has reported over the past few weeks, Farmers Insurance recently dropped policies on:

All combined, more than 1,000 homeowners are now looking for affordable property insurance.

Farmers Insurance emailed CBS 8 the following statement:

“While we decline comment on underwriting decisions related to individual customers, similar to other insurers in the state, we regularly review our market exposure and make adjustments, as necessary, to appropriately manage risk.”

Other condo owners in the Scripps Ranch community are starting to price out policies for their own, individual dwellings.

“We're looking into private insurance but there's a problem there with walls that are shared with other residents,” said Mike Colmenero, a condo owner in the Village Woods community.

Changing to individual individual coverage will require changes to the HOA bylaws, requiring a two-third’s vote of all condo owners in the Scripps Ranch complex, according to Sloat.

“The bottom line is we're getting screwed by the insurance companies and our local representatives. Elected officials don't seem to want to do anything to help us,” Sload said.

Owners in Tierrasanta’s Villa Monterey community are preparing to vote on a ballot by March 23 that would “require owners to obtain property insurance for their unit and shared portion of their condominium building” and also allow the COA to levy a $7,250 special assessment per lot to pay for common area insurance.  That change would require a majority vote, according to COA documents.

California Insurance Commissioner Ricardo Lara did not respond to a message from CBS 8 inquiring whether he planned to raise the maximum on the state’s commercial FAIR Plan, as requested last week by 18 state legislators.

The office of the California Insurance Commissioner Ricardo Lara responded, after this report was posted, with the following statement:

"Improving insurance options for homeowners associations is a top priority for Commissioner Lara. In November 2021, Commissioner Lara ordered the FAIR Plan to increase its coverage limits for the first time in 25 years -- before these recent reports of non-renewals by insurance companies. The Department of Insurance is doing our due diligence to help protect the residents of homeowners associations now and for the future. We expect to have more to announce on this soon..."

At CBS 8, we are always Working for You and our San Diego community. If there is something you would like us to investigate, please share your idea here or email us at workingforyou@cbs8.com. 

WATCH RELATED: Farmers cancel insurance for 338 homes in Rancho Bernardo (Feb. 2023).



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