As devastating wildfires continue to impact communities across California, homeowners are facing another crisis—the shrinking availability of home insurance. Many insurers are pulling out of high-risk areas, leaving property owners scrambling for coverage. In a recent episode of Business Talk with Meghan McNulty, I sat down with Daniel Gonzales-Hatton, Agency Owner at Goosehead Insurance, a nationally recognized independent agency founded in 2003 to discuss why insurance companies are retreating, what this means for homeowners, and how you can protect yourself before disaster strikes.
Why Are Insurance Companies Leaving California?
With wildfires causing billions of dollars in damage, many insurance carriers are reevaluating their presence in California. I asked Daniel why so many companies are pulling out, and his response was eye-opening:
- · State regulations make it difficult for insurers to adjust rates to match increasing risks.
- · Major losses from fires have made it unsustainable for some companies to continue offering coverage.
- · As insurers leave, homeowners are left with fewer—and more expensive—options.
This situation is especially problematic for homebuyers who can’t secure coverage, putting real estate deals at risk. If you’re thinking of buying or selling a home, now is the time to review your insurance options carefully.
What Homeowners Can Do Right Now
I know that many of my clients and listeners are worried about what this means for their homes and financial security. Daniel shared some practical steps every homeowner should take:
- · Review your current policy—make sure you understand your coverage limits.
- · Work with an insurance broker, they can access multiple providers and find better options
- · Avoid coverage lapses—if you lose your policy, finding a new one could be difficult.
Trusts, LLCs, and Insurance: A Hidden Risk
As someone who works closely with families on estate planning, I wanted to dig into an issue many homeowners don’t realize until it’s too late—how trusts and LLCs affect insurance coverage. Daniel explained that if your home is owned by a trust or LLC, your insurance policy must reflect that. Otherwise, a claim could be denied because the named policyholder doesn’t match the property’s legal owner.
- · If your home is in a trust, notify your insurance provider immediately.
- · Make sure the trust or LLC is listed correctly on your policy.
- · Work with your attorney and insurance broker to avoid coverage gaps.
Many families put their homes in trusts to avoid probate and protect assets, but failing to update the insurance policy can create major problems when filing a claim. If this applies to you, take action now!
Is the California FAIR Plan a Good Backup Option?
For homeowners struggling to find coverage, the California FAIR Plan offers a state-backed alternative. However, I asked Daniel if this plan is enough, and he made an important distinction:
- · The FAIR Plan only covers fire damage—it does NOT include theft, water damage, or liability.
- · Homeowners may need a second supplemental policy to be fully protected.
If you’re considering the FAIR Plan, talk to an insurance professional first to make sure you understand the gaps in coverage.
Will Home Insurance in California Ever Get Better?
One of my biggest concerns is whether this insurance crisis will improve or continue to get worse. Daniel predicts that some companies may return if state regulations change, but for now, homeowners need to be proactive. One promising development? Fire-resistant construction and home hardening measures could lead to lower premiums and increased availability. If you live in a wildfire-prone area, this is something to consider for long-term protection.
Key Takeaways: Protect Your Home Before It’s Too Late
- · Review your insurance policy now—don’t wait until disaster strikes.
- · If your home is in a trust or LLC, make sure your insurance policy reflects that.
- · Consider working with an independent broker to find the best coverage.
- · Understand the limitations of the California FAIR Plan before relying on it.
- · Look into fire-resistant construction options if you live in a high-risk area.
If you’re a homeowner in California—or anywhere facing wildfire risks—this episode is packed with critical information to help you navigate today’s challenging insurance market.