Castaic condo owners see nearly 900% spike in fire insurance premiums
Homeowners in a Castaic condo complex were hit with a massive rate increase for fire insurance, with rates going from roughly $40,000 a year in 2020 to nearly $450,000 in 2022.
Last year, Jessica Carson and her husband purchased their first home, a three bedroom condo in Castaic.
"This is our home, and we feel like we are being forced to leave and we don't want that to happen," she told CBSLA.
The reasons the Carsons may have to leave their new home was the nearly 900% increase to the complex's fire insurance policy. The premium was $43,000 in 2020 and rose to roughly $430,000 in 2022. Homeowners have now been told by their homeowners association that they must each pay a $5,000 assessment to cover the rate hike.
"We are both working parents, middle class, and we are being asked to pay this extra money that we just don't know where it's going to come from," Carson said.
Some of the other homeowners have already decided to sell.
"There are a few units trying to sell, and we have seen them go in and out of escrow and price drops that are hurting the comps for the rest of in the community," said condo owner Kyle Kurtz.
For its part, the HOA said it did try to find a cheaper insurance policy, and CBSLA counted 27 rejections from major insurers.
"We actually did receive two other quotes, one for $800,000 and another was $900,000," Carson told CBSLA.
Harvey Rosenfield, with Consumer Watchdog, authored Prop 103 in 1987, which led to stricter regulations for insurance companies in California.
"Here is what I think," Rosenfield said. "I think insurance companies are taking advantage of a crisis to create their own crisis in the marketplace, by overcharging people, by refusing to renew."
Rosenfield also coauthored a study coming out Monday that claims some major insurance companies are inserting illegal provisions into their fire coverage policies as a way to deny claims and to be reduce what they pay out in claims.
"It's like you suffer the devastation of the wildfire and then what the insurance companies do to you is also a catastrophe," he said.
Consumer Watchdog is also calling out the insurance commissioner, saying he approved these illegal provisions. Asked for comment, the insurance commissioner's office release the following statement:
"As the consumer protection agency for the nation's largest insurance market, the Department of Insurance enforces laws requiring that claims be handled fairly, resulting in $166 million returned to California consumers last year alone.
These claims are 100% false. The department does not approve any part of an insurance company rate filing that conflicts with California law.
We exercise oversight and when insurers break the law, we conduct a thorough investigation and hold them accountable as shown by the Department taking corrective action against the California FAIR Plan and Nationwide Group over handling of wildfire claims."
In response to the rate hike for Cimarron Oaks HOA in Castaic, the Department of Insurance released this statement:
"The department is still gathering information in order to conduct a thorough investigation into the complaint we received from Cimarron Oaks Homeowners Association. As this is an ongoing investigation, I am unable to comment further. We urge all Californians with concerns about their insurance policies to contact us for immediate help at 800-927-4357 or via online chat at insurance.ca.gov where you can also start a complaint."
