Interview with an Experienced Marin Home Insurance Agent

We sat down with Garret Goo, an insurance broker at State Farm Insurance who, along with his wife Shere, we’ve been recommending to our clients for many years. They always provide prompt and useful information. Shere has had a State Farm office since 1989. We asked Garret about how to choose a homeowners’ insurance company and for advice about coverage issues, especially those specific to Marin County.

Q. How should a homeowner decide which insurance company to use?

A. It’s so difficult to obtain coverage now that you may only have one insurer that will provide a quote, or you may only be eligible for the California Fair Plan, which is the insurer of last resort.

If you do have a choice of carriers, you should look at the coverages and endorsements offered (a common endorsement is scheduled personal property coverage) and the quoted premium.

It’s always best to choose an admitted and reputable carrier versus an unadmitted carrier. An admitted insurance company is one that has met the regulations of the California Department of Insurance. It’s also wise to research the financial strength of the insurer by checking its Standard & Poor rating.

Q. As you say, because of wildfire risks in Marin County, insurers are not renewing some homeowners’ policies. Are there steps homeowners can take to maximize the chance that their insurance will be renewed?

A. Yes. It’s important to keep your house well maintained. Ensure that brush, trees, and vegetation close to the house are cleared and that roof debris is removed. Old roofs should be replaced and those in need of repair should be fixed.

All insurance companies do random surveys to look for these hazards; there is a high probability your home will be surveyed if it’s located in a high fire area. As a pre-condition for policy renewal, clients are asked to mitigate these conditions within a 9 to 15 month period.

Q. Can homeowners reduce the cost of their premium?

A. Yes, there are a number of ways to lower the cost of your homeowners’ insurance policy:

• Use a monitored security system. Insurers offer a discount if you have a monitored security system that includes fire and burglary protection.
• Upgrade utilities – Insurers may levy a surcharge if the home has outdated utilities. You may be able to get a discount by upgrading the furnace, electrical system, and plumbing.
• Claim-free discount – This discount applies if you have had your policy for quite a while and haven’t filed a claim. The savings could be sizeable – possibly as high as 24%.
• Home and neighborhood wildfire discounts – the California Department of Insurance has required insurance companies doing business in the state to provide discounts for residential property insurance when policyholders reduce their wildfire risks. If your home is located in a neighborhood that is certified by a program called Firewise USA, your premium will be discounted by 2%. An interactive map shows these neighborhoods, which are sprinkled throughout Marin.
  The California Department of Insurance maintains a list of all the insurers doing business in the state that offer wildfire risk reduction discounts, whether for being a Firewise USA site or for meeting other criteria outlined in their program menu. Before doing anything else, consumers should find out whether their carrier offers a discount by exploring this list of residential property insurance companies currently offering discounts for fire hardened homes and/or communities. 
• Several companies offer not only this community-wide discount, but also home-specific discounts. However, it’s difficult to get a home-specific discount; essentially these discounts apply only to brand new homes that have fire-resistant roofs, siding, and decks and vegetation clearance.
• Add an auto insurance policy. Insurers offer multiple policy discounts.
• Choose a higher deductible – Most homeowners have a $5,000 deductible, meaning they pay the first $5,000 of a claim out-of-pocket. Increasing the deductible lowers the premium.

Q. What amount of coverage should a homeowner have?

A. For every policy a Replacement Cost Report is generated. The report determines how much it would cost to rebuild and is particular to each home. Marin County is a very expensive area and building costs are high. The replacement cost amount makes up the brunt of the total premium cost.

We recommend that our clients purchase extra replacement cost coverage, which is very cost-effective. This supplemental insurance provides for more coverage (50% of the replacement cost) for a very low price. For example, in Marin County, a policy for $2 million in coverage might cost around $4,600. The extra coverage might cost a little less than $100 but will buy you another $1 million in insurance.

Q. Are their limits to the amounts of insurance you can buy?

A. Insurance companies have reduced the maximum that they will insure on high value properties. State Farm in 2023 would insure up to $10M. In  2024 they reduced this to $4M. The California Fair Plan has a limit for residential properties of $3M. The maximum will vary with insurance companies. You may be able to buy excess liability coverage in addition to your primary policy. The insured limit may also vary with the location of a home; for example, the fire risk zone.

Q. Is it true that insurance companies have more requirements for homes that they insure?

A. Yes. To reduce their risk, some insurers are more often inspecting homes and requiring corrections. These may include roofing repairs, a central theft and hazard alarm system, an automatic water shutoff valve, and updating the electrical system; for example replacing knob and tube wiring with modern Romex wiring. 

Q. How do I decide whether to take out earthquake insurance?

A. There are several things to think about when it comes to earthquake insurance. Most important, if an earthquake causes damage to your house – let’s say the pipes burst or there are cracks in the walls – homeowners’ insurance will not cover those claims.

Although earthquake insurance is not as robust as homeowners’ insurance because it does not include endorsements, it does cover the cost to rebuild, personal property damage, and loss of use. While not inexpensive, the cost of insurance in Marin County, which sits between the San Andreas and Hayward Earthquake Faults, is lower than in, say, Berkeley, because it sits right on the Hayward Fault. The main reason most homeowners don’t have earthquake coverage is because the deductible is high – usually 15%. But if a home suffers extensive damage, the repair or replacement cost would well exceed the deductible. Deciding whether to purchase earthquake insurance comes down to a personal risk/benefit assessment.

Q. Do I need flood insurance?

A. Lenders require flood insurance for homes in Flood Zone A, which is a Special Flood Hazard Area (SFHA) designated by the Federal Emergency Management Agency (FEMA). Flood Zones A have special flood, mudflow, or flood-related erosion hazards. For residential properties, the maximum coverage is $250,000 for the building and $100,000 for the building’s contents. The cost of a policy is based on a home’s particular risk and premiums start at $3,000 per year. To determine if your home is located in a SFHA, you can search the FEMA flood map.

However, it’s wise to take out flood insurance even if your home is not in a high-risk flood zone. Your property could still suffer damage from, for instance, unusual and rapid accumulation or runoff of surface waters from any source, which is covered by the definition of “flood.” 

Madeline Can Help

Madeline is looking for the best insurance brokers to help in obtaining home insurance. Your options vary depending on the value of your home, the amount of coverage that you want, and the location. Contact her for recommendations.