Tierrasanta homeowners move away after farmers’ insurance is unlocked

A bushfire risk assessment resulted in the property insurance not being renewed for the entire complex.

SAN DIEGO — More than 300 Tierrasanta apartment owners are scrambling to find property insurance after Farmers Insurance canceled its policy over wildfire risks.

Now, the Monterey Condominium Villa Owner’s Association is trying to find insurance in the secondary market, which can come at a cost of $7,000 per year for each condo owner.

Residents crowded into a packed club on Tuesday night for an informational meeting at Town Hall.

I am a senior living on a fixed income and on a budget. “This is the way I live,” said owner Alison Brenner, a retiree who said she’s lived in the Villa Monterey complex for 30 years.

“Right now, I’m not a wage earner. I’m 74 and can’t go out and get a job to supplement that income. I live on my own,” she said.

WATCH: Villa Monterrey apartment owners vote at Town Hall meeting

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

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

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

“The new policy that our HOA has secured is anemic — it only covers about 1/8 of the $80 million infrastructure replacement cost, and unless we can find a replacement policy, it will cost the HOA (about) $1 million in 2023. This will mean a huge private appraisal per unit for a homeowner,” stated Morada’s condo owner.

Experts said it was all down to the risk of wildfires.

“Since 2017, insurers have paid twice as much as the Northridge earthquake,” said Kimberly Lilly, an insurance agent and member of the Institute of Community Associations, a trade group that advocates for apartment owner associations.

Large insurers, such as Farmers, have recently updated their modeling software to assess wildfire risk, Lilly said. As a result, they exit the market.

“It’s an increasing risk. There’s no question, based on the disaster model, that wildfires are costing more every time they happen now,” Lilly said.

One possible solution, Lilly said, is to separate wildfire insurance from the main property insurance policy.

“Wildfire is very much like an earthquake, and it’s going to be catastrophic coverage that you can subscribe to or unsubscribe from,” she said.

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

“So instead of the usual $5,000 or $10,000 deductible for associations right now, they might say for wildfires, it’s $25,000, $50,000 or even $100,000 deductible. Then, they can price a policy (cost ) is very low for the association to cover everything they need to cover,” Lilly said.

In Terrasanta, the Villa Monterrey Condominium Association has also proposed that individual apartment owners pay for insurance on their properties, inside and out, unit by unit. This CC&R change must be approved, however, by a vote of the condo owners.

“Now that I’m retired, I have to be happy, get lucky, and enjoy life,” said Brenner, the longtime Villa Monterey apartment owner. “Now, this is a terrible burden for me.”

A vote is expected allowing the COA to shift insurance liability from the association to each individual homeowner.

RELATED WATCH: Farmers Insurance Cancels Insurance Policies of Over 300 Homes in Tierrasanta (Jan 2023).

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