SAN DIEGO — More condo owners are coming forward to report Farmers Insurance has not renewed their property insurance due to wildfire risk.
Residents in the 338-unit Morada condo complex may now be looking at thousands of dollars in special assessments to get insurance on the secondary market.
CBS 8 spoke to a Morada resident who did not want to be identified because he feared retaliation from Farmers Insurance.
“My wife and I have been here for more than a decade,” he said.
Because the condos are connected, the complex needs a single master property insurance policy of about $80 million.
Farmers canceled the policy for the entire complex, including coverage for wildfire damage.
“They have prepared some proprietary wildfire maps of their own, which they don't disclose. And it indicates that many of these condominium complexes are in extreme wildfire risk zones,” said the Morada resident.
The owner said the complex’s HOA found a temporary policy on the secondary market for the first quarter of 2023, but residents are worried the special assessment could be about $2,500; that’s on top of the $500 per month each condo owner pays in HOA fees.
“Right now, we have a policy because we have a mortgage. It's essential that we have a master policy in place that's going to cover wildfire damage, and the bank insists on that to have collateral for their mortgage,” said the resident.
Condo owners started contacting CBS 8 last month about Farmers Insurance canceling policies, including 320 condos in Tierrasanta, 240 condos in Rancho Penasquitos, and perhaps hundreds more across the state.
Because cancellations raise insurance costs, the price of housing also increases.
“So, this problem will, in my mind, create homelessness in the not-too-distant future,” the Morada resident said.
It’s a scary prospect for the resident and his wife, who are in their 80s and on a fixed income.
“We'll survive this year. But suppose it goes on and something is not done to resolve it. In that case, it's going to be a huge crisis throughout California that will result not only in the personal loss of units but, in the end, the failure of condominium communities themselves,” said the resident.
CBS 8 reached out to Farmers Insurance on more than one occasion but did not get a response.
State Assemblyman Brian Maienschein, who represents Rancho Bernardo, emailed CBS 8 the following statement:
“I hear the concerns of the community and share their frustrations. In a wildfire prone area like San Diego, having the security of property insurance is critical. I am actively working with the Insurance Commissioner’s office to find a solution that gives property owners peace of mind. In the meantime, I encourage those who have been affected to reach out to their Associations to express their concerns and file a complaint with the Department of Insurance.”
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