Read the episode transcript
Aaron Bollinger (00:01)
Hello everybody and welcome back to the Speaking of Insurance podcast. My name is Aaron Bollinger back at it with another solo video with some breaking news. not so breaking, breaking news, but if you're not up to date on all of the insurance happenings, then it very well may be breaking news for you. State Farm and Allstate have filed with the California Department of Insurance to start writing homeowners insurance across California. Now, take this with a grain of salt, it hasn't been approved yet, to my knowledge.
Aaron Bollinger (00:27)
But as of October 11th, there is some sort of happenings legally to get them to start opening up. this is a big part of California property insurance, is the new people who are coming in and willing to write. Now, the question I pose is, are these new players? No. They had written new California homeowners insurance policies in and up until 2023. Same thing with Allstate. Allstate had written up until 2022.
Aaron Bollinger (00:54)
So this is kind of just a re-entrance of something of old. And while it could be great and it could give people some more options for replacing their current homeowner's insurance, I would take it with a grain of salt. Not only is it not fully approved yet, but you have to weigh the pros and cons of working with every single type of insurance company. And today we're going to be talking about that. We're going to be talking about how you can qualify for these insurance companies and other insurance companies and maximize the coverage they receive for every single premium dollar. By they, I mean you, the consumer.
Aaron Bollinger (01:24)
How can you optimize what you're paying for insurance? Everybody talks about how these companies have these regulations of, you have to clear out the brush. you have to have, five feet of no plants across your house. There are different requirements for different insurance companies. So if you're looking for a specific niche, I would I would plug Bollinsure, B O L L I-N-S U-R-E. Obviously, you're listening the podcast. You understand, you know, speaking of insurance, that's that's my
Aaron Bollinger (01:51)
family brand. We we do independent insurance brokerage side of things. We work with over 300 insurance companies. No, not all of them write homeowners insurance, but I could name a few dozen, maybe a couple dozen, that we do actively write write homeowners insurance with. And not all of them do have those strict requirements that a lot of insurance companies are enforcing. So it comes back to for eligibility for these insurance companies and all insurance companies, the conditions of your home, how you manage your risk, how your insurance
Aaron Bollinger (02:18)
property and policy is structured. And I would argue that how your policy is structured is actually more important than the price of the policy itself. We're going to be talking about market developments. We're going to be giving some homeowner experiences that we've seen. We're going to be giving some practical risk mitigation, suggestions, ideas, and ways to evaluate your coverage without sacrificing the necessary protection that every single homeowner should be entitled to for what they're currently paying for.
Aaron Bollinger (02:48)
So the truth of the matter is homeowns in California are paying thousands of dollars more over the last 10 years than they have been historically for home insurance. And how do we know what they're getting for all that money? Some of them are getting the huge renewal increases in not actually filing claims. Others are discovering that insurance companies they couldn't qualify for a year ago might be opening up again. Today we're going to be talking about how to make your home a better risk. And so we're going to be giving all of the insights into.
Aaron Bollinger (03:17)
Why are you actually paying those extra thousands of dollars? How can you differentiate yourself from the people who are causing the increases in the extra thousands of dollars? Because odds are it's not solely you. Even if you've filed an insurance claim, which obviously we do not recommend unless it is absolutely necessary to do so simply because of how relationship based and history based and claim based the industry is. But if you've had to file an insurance claim,
Aaron Bollinger (03:44)
That doesn't automatically make you somebody who's contributing to the increased premiums. If anything, it's just the underwriting models, the prediction models that these insurance companies are running with. But not solely those. It's also the fact that they have to turn a profit. And so a lot of these insurance companies have been losing money. So even if they think 2026 is a down year compared to 2025, that doesn't mean that the prices of 2026 are gonna be lower than the prices of 2025. If they lost money in 2025, they file for rate increases.
Aaron Bollinger (04:13)
requests at least to do so with the California Department of Insurance. The California Department of Insurance kind of has their hands tied behind their back and kind of has to say yes because otherwise they've got insurance companies losing money in California, less people are going to want to write home insurance and property insurance in California. So they allowed for the rate increases and the rate increases hit and they have to turn a profit. So again, year to year risk increase does not automatically imply increased premium.
Aaron Bollinger (04:43)
And vice versa as well. So why can two neighboring homes receive dramatically different insurance quotes? This is something that I've seen.
Aaron Bollinger (04:53)
I can give you example of a friend of mine. He was experiencing a potential non-renewal and cancellation of policy. Non-renewal, not cancellation. Apologies for that. Cancellation means they're just done with you, effective a specific day. Non-renewal means listen, when your policy's coming up, we can't write the risk anymore. He was going to get non-renewed for having pots, plants, shrubs, and some brush nearby his house in a specific radius for brush. It might be 100 feet, 50 feet, whatever it is.
Aaron Bollinger (05:20)
For vegetation and flammable objects that could be five feet, those potted plants. He had to move all those items, but he was still renewed by AAA. It's just great. I I think I've seen a few people getting non-renewed by insurance companies like Triple A and with AAA. And so you think about that. Is his neighbor who's with AAA gonna get the exact same treatment?
Aaron Bollinger (05:44)
The answer is no. The answer is it depends. How long has he been with AAA for? Or have they been triple A for?
Aaron Bollinger (05:49)
What type of claim history do they have on their other investment properties? What level of structural risk does the current policy and current home address face? That's what the insurance companies look for. Now there's some legal limitations that they have in terms of what they can actually non-renew and refuse to write. And so looking into those is what the insurance companies do before they send you out the non-renewal. So if you're getting non-renewed, odds are that they have legal grounds to do so. And if there are any preventative measures to take, I would definitely recommend you to do so.
Aaron Bollinger (06:20)
To do so. That's the three word of the day, to do so. But
Aaron Bollinger (06:27)
Please make sure that you are not associating what's happening in your neighborhood with your current insurance plan, nor should you associate what's happening in the state with what is happening to you individually. If you are the world's best driver, super clean, driving the record, and you've got the lowest risk car and maybe you've been with your insurance company grandfathered in for tens of years, that's another big thing. Grandfathered policies. It's just when like, not like your real grandfather, but like
Aaron Bollinger (06:56)
They call it grandfather because the pricing is just so competitive because it can only increase by a specific rate, and that you're locked in with an insurance company who might not even be writing anymore actively in California. they're willing to write your insurance because you have a clean record, because you have a good reputation with them, because you've been with them for so long. So stuff is happening statewide, but you're with auto insurance with let's just say Wabanessa, which is a
Aaron Bollinger (07:23)
extremely competitive auto insurance company on the pricing side, then that doesn't necessarily mean that all of the things that are happening in the general California market are happening to your home, is all I'm trying to say. So take it with a grain of salt. And so with this news and with the news of State Farm and Allstate coming back in, we really want to talk about the proposals of these insurance companies and how impactful it can be on your future prices because that's the biggest thing.
Aaron Bollinger (07:52)
I would say obviously all the all the past you can't really change. What you can change is what you're doing right now, how you protect your risks, how do you properly improve your homes construction features, debris removal, obviously, brush removal, partnering with a proper insurance company, but what's going to happen in the future. And so State Farms Proposed Return to Homes focuses on meeting requirements that pertain to wildfire, safety certifications. So
Aaron Bollinger (08:20)
State Farm is proposing to return to homes that focus on the specific wildfire safety certification requirements having been fulfilled. So pretty much they're being a little bit picky, as insurance companies should be given the level of risk of riding in California. They are proposing a December reopening, and obviously this all pens on regulatory approval. Twelve insurance groups.
Aaron Bollinger (08:44)
This is 12, have now filed or received approval under the CSIS. I'm sure that there's another abbreviation for CSIS that I'm not thinking about, but this is California Sustainable Insurance Strategy Framework. I'm sure there's some college or something out there that's CSIS. But this is California Sustainable Insurance Strategy Framework. 12 insurance comp groups have now filed or received approval for this. So this is just.
Aaron Bollinger (09:13)
An indication that there is more carrier participation in the California insurance marketplace. But this does not mean that every home will qualify for these new insurance companies. So if an insurance company declined your home two years ago, your eligibility could look 100% different, but it could also look the exact same now. And so underwriting appetite is one thing that does change. This is if one insurance company says no to you one year and they say yes to you the next year, it's because they've had an underwriting change. They've said,
Aaron Bollinger (09:42)
Listen, either an accident's gone off your record and it's met that four to five year threshold. Maybe that means the underwriting hasn't changed. Or let's say that you had a water damage of $50,000 to your property. And before they were saying, listen, we don't like writing people who have had claims over $50,000 for water insurance. We'll only write you with a water damage sublimate. And then you say, I listened to the speaking of insurance podcast. I know what a water damage sublimate is. I am not going to write that insurance policy. I'm going to go with another insurance company.
Aaron Bollinger (10:10)
With Bollinsure, which would be absolutely outstanding. And I would say props to you. But if they come back at you the next year and you maybe are remarketing, obviously Bollinsure does that for you, plug, can't blame me for doing that. But let's say they come back to you next year and they say, Hey, we are willing to write it now. That's excellent news. That's also been an indication of an underwriting shift. Maybe they now have the cap at $60,000 for water damage of prior claims for future eligibility.
Aaron Bollinger (10:40)
And so a homeowner who's previously maybe been with the fair plan, who's been not denied from specialty insurance companies historically, could very well have that door open to them, not only because of new insurance companies joining, but from the ones that they've already been shopped with or already tried, changing their taste, changing their appetite, saying, Hey, you know, we actually do like 1900s homes that are in designated high wildfire areas and
Aaron Bollinger (11:10)
Have wood siding, which would be a miracle. That was a little bit of a joke for those of you who got it. I would say the biggest problem that I've seen in present day is the fact that homeowners are not properly insured with enough insurance to rebuild. And so California has recently enacted legislation requiring home insurers to offer at least 50%.
Aaron Bollinger (11:32)
ERC. ERC is like it's like gold to me. It's extend replacement cost coverage. If you're unaware of this little cheat code on your policy, it basically helps cover your home's rebuild costs with a level of like an inflation guard. It's not necessarily an inflation guard, but in case your neighborhood burns down. Horrible. So very sorry if that happens. Just getting you prepared for it, just in case.
Aaron Bollinger (11:59)
If you add that 50% extended replacement cost, ERC cushion, and construction costs in that neighborhood increase as they should, as they would, if there's more construction work going on and a higher demand for contractors and construction in those places, then it will help cover for that extended cost. It is so often crazily cheap in comparison to increasing your coverage A by 50%. And so this is where a little problem happens.
Aaron Bollinger (12:26)
People think, you know what? I want to lower coverage A and I'm just going to add 50% extended replacement cost. No, extended replacement costs can only get triggered in specific situations where it is appropriately needed and where coverage A is adequate. So just a little nuance, a little wrinkle that is 100% important to understand. And if you don't want to understand it, you can ask me, I can explain it to you, or I can just do it for you, or our team can just do it for you because I'm starting to delegate and we're starting to help more people. And I think that that's just a healthy thing to do.
Aaron Bollinger (12:57)
So this little ERC thing that's going to be happening in 2027. So we're a ways away from it, but nonetheless, actually we're not. Guys, 2026 is coming to a close. So in the beginning of 2027, I guess that we're going to be having 50% extended replacement cost coverage being offered by all insurance companies. Swoop that up if you don't currently have it offered with yours. Second, set an alarm. First thing that you should do on January 1st is not celebrate. It is send the email in to your insurance broker or agent.
Aaron Bollinger (13:27)
And ask 50% extended replacement cost coverage on your home. And ask if your coverage A is adequate. Bunch of other questions that you should ask. But for my ENO and for my mental sanity, I'm just going to stick it just that one. I would definitely recommend that. And so this would help address theoretically, if this goes into force, the concerns that homeowners have about realizing in the event of a catastrophic claim that they don't have adequate insurance.
Aaron Bollinger (13:49)
There's almost more than half, or maybe more than half, of the Palisades homes that had burned down that didn't have adequate coverage A. And so you're thinking about these homes that people are spending tens of thousands of dollars a year on for their insurance. When you think about your home that is your biggest financial asset or one of them, and it's also your biggest financial liability, it is worth paying the extra amount,
Aaron Bollinger (14:08)
Say, listen, I listen, I listened to the Speaking of Insurance podcast. I've got coverage A to the roof, man, to the actual replacement cost coverage. And I added the 50% extended replacement cost cushion because I value my home, I value my assets, I value my portfolio. And so an illustrative rebuilding scenario is when let's say that you're in, say you're in the valley and you have a dwelling replacement cost of $600,000. If you add that 50% cushion,
Aaron Bollinger (14:38)
Quick math, that's $900,000 of protection, subject to policy conditions and cover losses. That's an extra $300,000. That again, it will not add $50% to your policy premium. It in many cases is less than five, less than 10% of your policy premium to add an extra 50%. It seems like a no-brainer and it 100% is. And this gets into the nuance of is your home actually on replacement cost?
Aaron Bollinger (15:05)
Because a lot of people think that they're on replacement costs. They go in, they buy the asset. Actual cash value is not ideal. It is the worst option. If you're able to get replacement costs, get replacement costs. Actual cash value is just them giving you the value of the home minus the land. We're going to be giving you guys some continued reminders about things like debris removal, things like materials, things like I said, a replacement costs, things like
Aaron Bollinger (15:29)
Building code upgrades, things like extended replacement costs, all these things that we've talked about. And so I pose the question to you, maybe a little bit of food for thought. Would you rather save $200 on your annual premium or discover that you have an extra $200,000 of rebuilding protection when you need it most? So again, would you rather save $200 or have $200,000 when you need it? I know it's not that simple. I know some financial decisions are based on a budget, based on a calculus that you do in your head, based off of risk.
Aaron Bollinger (15:59)
Thing that I've learned is that you can never predict what's gonna happen. You can never predict it. This world, the events in this world, the people in it, the liability, the asset protection. I mean, you own what you own. Make sure that you keep it. That's all I'm trying to say. So here's a little risk management checklist that I can give you guys really quickly. I d drafted this up, so bear with me. Number A, number A, gosh, guys, it's late. Letter A, wildfire mitigation and home hardening.
Aaron Bollinger (16:28)
I would say that look around your house, see if there are any combustible materials immediately around your house. And I would remove those immediately. Unless you're undergoing construction or rebuilding, I would 100% take a look at your surrounding aspects of your home and remove things that are made out of combustible material. There's a thing called defensive defensible space and hazardous vegetation. Now hazardous vegetation, I know you guys know what I'm talking about. I know that if you got some brush out front, you guys are 100% aware of that hazardous vegetation.
Aaron Bollinger (16:57)
Defensible space is just like a little bubble around your home, making sure that there's nothing around it. Not just hazardous vegetation, but all other things as well that could potentially pose a risk. Another really cool feature of a lot of modern homes is ember resistant vents. So that's just making sure that the house doesn't catch on fire and it's just a little risk mitigation strategy. A class A rated roof. Now, in a lot of these newer neighborhoods, again, I love newer neighborhoods as an insurance broker because their pricing is so crazily cheap.
Aaron Bollinger (17:27)
But if you have an older home or if you have a higher value home, class A rated roof, 100% worth it. Upgrade it, clean your gutters, make sure that those are well maintained. And then consider also things like wildfire-resistant windows. Maybe if you have a deck, a wildfire-resistant deck, and then the exterior materials that are around your house as well, making sure that those are wildfire resistant. Now, B is water damage. So sneaky. Plumbers are expensive.
Aaron Bollinger (17:54)
But that's not the problem. The problem is that homes are susceptible to these type of damages. So things like water heaters, supply lines, and aging plumbing, getting in inspections is 100% important. leak sensors and water leak detectors, water shut off devices. We talked about this. If you guys are buying a home and you guys don't have a water shut-off device, go get one. Worth the install, worth every penny that you'll pay for it. If any event happens and it
Aaron Bollinger (18:24)
I don't know, detects that there's a leak happening. It'll help turn your water off. You're able to do it remotely some of the time too on an app. It's just super cool. 100% worth it. Another thing is heavy rain. El Nino's coming. We talked about that. Get your roofs inspected. Make sure that you're prepared in the event of something happening in terms of like, I don't know, your roof falling in and, you know, flashing possibly. Another thing is.
Aaron Bollinger (18:52)
Washing machine hoses and appliance connections can be a sneaky little bugger. that kind of ties into the electrical side of things where please guys make sure the electrical systems are up to date and fully professionally inspected. Get those inspected every year, every two years, more frequently if if possible. But
Aaron Bollinger (19:13)
How do you make the most from your insurance? You don't make money from insurance. So you make money from insurance if you're filing claims left, right, and center. And then the insurance companies are just going to make money from you for the rest of your life if you ever want to pay for it ever again. So the strategies that I've seen people work on successfully are increasing their deductibles. You get lower premium, but you have a higher out-of-pocket cost. I've seen people bundle their home and auto. There's obviously a way of saving money there. But
Aaron Bollinger (19:40)
Problem is you kind of restrict yourself to insurance companies that don't write standalone home insurance policies. There are some home insurance companies who are just like the best at what they do in specific areas, have the best partners for the wildfire prevention strategies, have the best claims payouts and understanding of the market. And so bundling is an excellent option, but I would not exclusively look
Aaron Bollinger (20:06)
At that, I would look at the insurance company, look at the coverages, look at the financial stability as well. I would say that the most no brainer thing is improving the home safety things that we discussed. Sure, there are upfront improvement costs, but in the long run, you think about how let's talk about a garden. If you have a garden and you've invested in that garden, and maybe you're a gardener and you live in it every day, I don't know. Let's just say that you're a really big gardener.
Aaron Bollinger (20:36)
And you've got it in your front yard and it looks super nice. Would you rather be not planting new things, not watering it every day, not checking up on it if you've invested money into it and you're passionate about it and you really loved it when you first saw it? It's kind of like a home. It's the same thing. I I just liken it to that.
Aaron Bollinger (20:57)
So, all in all, if one policy is cheaper than another, that does not automatically indicate that you should be going to the insurance company that's cheaper. Look over the coverages and endorsements. People usually miss endorsements. Endorsements include things like the water loss sublimit. They include things like specific animal liability exclusions that a lot of people miss. And so I think that the biggest things that people do is look at your current insurance or get it reviewed for you, get an up-to-date replacement cost estimate.
Aaron Bollinger (21:26)
Check whether your property qualifies for mitigation and home safety discounts because a lot of people are on insurance companies programs and the insurance company isn't fully aware of how awesome you are when it comes to risk management because you've listened to this podcast. Maybe, maybe not. Get your roof inspected, your plumbing, electrical systems, and check for wildfire vulnerabilities. Take pictures, you can send them over to me, I'll take a look. Review deductibles and the exclusions on your current insurance. If you don't switch and you said you've been
Aaron Bollinger (21:55)
wanting to switch and you stay with the insurance company that you're currently with, and this entire time there's been an animal liability exclusion, and little Bobby the dog bites somebody, it's gonna be horrible. But structurally speaking, if you told the insurance company that your plumbing was updated in 1980 and you're on the 1920s, copper sort of combo construction, then the insurance company, in the event of a water claim, will likely not pay it out.
Aaron Bollinger (22:25)
So at Bollinsure we believe homeowners' insurance shouldn't be about finding the lowest premium. It's about understanding your risks, protecting what you've worked for, and making sure that your insurance dollars are actually doing something for you. Whether you're dealing with a renewal increase, wondering if another insurance company might accept your home, or simply trying to understand your coverage, reviewing your options is one of the most important things that you can do. Your home is probably one of your biggest investments. Make sure you're protecting it the right way.
Aaron Bollinger (22:54)
Make sure that you have a trusted broker, a trusted advisor, a trusted plan, an insurance policy in the event that you do have to file a claim. 100% have confidence in it. Thank you so much for listening. Hope you guys have a wonderful rest of your day. And for homeowners in California in 2026, good luck to you.
