Castaic condo owners see nearly 900% jump in fire insurance premiums

Homeowners in a Castaic apartment complex were hit with a huge increase in fire insurance rates, going from roughly $40,000 a year in 2020 to nearly $450,000 in 2022.

Last year, Jessica Carson and her husband bought their first home, a three-bedroom apartment in Castaic.

“This is our home and we feel like we’re being forced to leave and we don’t want that to happen,” she told CBSLA.

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Reasons why the Carsons are able to leave their new home is the nearly 900% increase in fire insurance on the complex. The premium was $43,000 in 2020 and rises to approximately $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 increase of interest.

“We’re both working parents, middle class, and we’re 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 remaining owners have already decided to sell.

“There are several units that are trying to sell and we’ve seen them go in and out of escrow and price drops that hurt the companies for the rest of the community,” said condo owner Kyle Kurtz.

For its part, the HOA said it tried to find a cheaper insurance policy, and the CBSLA counted 27 rejections from major insurers.

“We actually got two other offers, one for $800,000 and one for $900,000,” Carson told CBSLA.

Harvey Rosenfield, with Consumer Watchdog, authored Prop 103 in 1987, which led to stricter regulations on insurance companies in California.

“That’s what I think,” Rosenfield said. “I think the insurance companies are taking advantage of the crisis to create their own crisis in the market by overcharging people by refusing to renew.”

Rosenfield also co-authored a study out Monday that claims some major insurance companies are inserting illegal provisions into their fire coverage policies as a way to deny claims and reduce what they pay out in claims.

“It’s like you suffer the devastation of a wildfire and then what the insurance companies do to you is also a disaster,” he said.

Consumer Watchdog is also calling out the Insurance Commissioner, saying he approved these illegal regulations. Reached for comment, the Office of the Insurance Commissioner released the following statement:

“As the consumer protection agency for the nation’s largest insurance market, the Department of Insurance enforces laws requiring claims to 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’s rate statement that is inconsistent with California law.

We exercise oversight, and when insurers violate the law, we conduct thorough investigations and hold them accountable, as demonstrated by the department taking corrective action against California FAIR Plan and Nationwide Group in handling fire claims.”

In response to the rate increase for the Cimarron Oaks HOA in Castaic, the Department of Insurance released this statement:

“The department is still gathering information to conduct a thorough investigation of the complaint we received from the Cimarron Oaks Homeowners Association. As this is an ongoing investigation, I cannot comment further. We urge all Californians who have concerns about their insurance policies to contact us for immediate assistance at 800-927-4357 or via online chat at insurance.ca.gov, where you can also file a complaint.”

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