I recently attended a presentation conducted by Insurance agent Frank R. Lewis, where I learned some valuable information regarding the importance of securing homeowner's insurance early in the escrow process.  It seems many companies are no longer writing insurance in parts of California due to the risk known as the "Wildfire Zone".  Not only is homeowner'sinsurance a wise idea, it is also a necessary requirement whenever a buyer is obtaining a home loan.  Unfortunately, many buyers wait until the last minute to obtain insurance for their home purchase which can result in the delay or inability to close escrow.   

In addition this is very useful information for your buyers packet in order to help the buyer understand that there are some guidelines when shopping in certain areas.

Sandy Schweiger

 What can you do?

•     Work with a local insurance agent that is familiar with the area where you are purchasing your home

•      Contact your insurance company immediately upon acceptance of your offer and ask if the property is located in that company's "Wildfire Zone".

•      Ask your Insurance Agent to submit an application to obtain pre-approval and "Binding Authority" from underwriting.  (Not just verbal approval.)

•      Ask your Insurance Agent to inspect the property to determine if any of the underwriting requirements need to be met.  This knowledge would be great to have during the purchase contract inspection period so you can negotiate with the Seller to fix these required items.

When determining risk, insurance companies look for many of the items in the following general
checklist *:

• ROOF:

      Do all structures have an approved roof type? (Wood is not approved)

• VEGETATION:

      Are all structures over 300 feet from any combustible vegetation?

• ACCESSIBILITY:

     Is the street PAVED and over 25 feet wide?

     Is there PAVED access to all structures from two directions?

     The risk is NOT located in or accessed through a steep, narrow canyon?

  • FIRE DEPARTMENT:

    Is the fire department a 24-hour responding station?

    Is the risk within 5 miles of the responding fire station?

    Is the risk within 1,000 feet from a hydrant?

    If no hydrants, what is the fire fighting water source?

   Are the eaves on all structures enclosed?

   All structures do NOT have wood siding?

• ADDITIONAL UNDERWRITING CONCERNS:

   Are all structures situated on an approved foundation, and not on cantilevers, stilts, or pilings?

   Are all raised decks kept clear of accumulations of combustible materials?

   Is the structure visible from a public road, is the address clearly posted at the driveway entrance and is  the driveway able to accommodate emergency vehicles?

* The above list is provided for general information purposes only and depending on underwriting practices may not be an all inclusive list of requirements.   Use this list to be proactive in determining potential "red-flags" that may render a property uninsurable.

Homeowner's insurance is one of the many items you will need to address during the escrow process.  The sooner you contact your Insurance Agent after opening escrow, the easier the process will be. 

About Frank R. Lewis State Farm

Frank has been a State Farm agent for 27 years.   His office is located in Auburn, California.  His team strives to help people manage the risks of everyday life, recover from the unexpected and realize their financial dreams.  For more information, visit www.FrankRLewis.biz or contact 1-800-234-5330.