Presummer priority: review of fire policy |

Presummer priority: review of fire policy

Susan Wood

Lake Tahoe fire victims may be put out by more than a blaze if insurance policies go unchecked.

Taking the lead from California Insurance Commissioner John Garamendi, insurance agents and contractors hope the threat of what could be one of the state’s worst wildfire seasons will rekindle interest from policyholders in their plans.

One need only visit a home improvement center or hardware store on a Saturday to see the magnitude of construction in the Lake Tahoe Basin. Remodels, which can dramatically raise the replacement value of a home, dominate the Tahoe Regional Planning Agency’s permit lists.

“Fire jobs are tough because the people are usually put out and surprised by the price of the jobs. What some people might think is a $5,000 job can turn into $25,000,” longtime South Lake Tahoe contractor Ray Fernsten said Monday. “People need to know (that) replacement costs are higher than what their policies covered 10 years ago.”

The rule of thumb, according to contractors, is that it costs about $150 to $200 per square foot to take on the damage.

James Ward, who hired Yonker Construction to perform a remodel after experiencing a fire, said he decided to increase the fire coverage on his Tahoe Keys house.

The building industry has been plagued with rising construction costs and skyrocketing workers’ compensation premiums at an inflationary rate that far exceeds other sectors of the economy.

“The (insurance) company’s not going to know what you put into (your home),” said Bob Anderson of Fromarc Insurance.

He recommends filing still pictures and videotape of home improvements, which in Tahoe stretch beyond the average kitchen cabinetry. Many homeowners gut older structures.

And valuable contents such as a $25,000 painting may deserve to be separated from the list of personal property so the homeowner recoups the full investment in the event of a fire.

But it’s the structure itself that fire victims have fought to recover most often.

“The cost of rebuilding a home will cost more in Tahoe than in the Carson Valley,” Anderson said. “In some cases, they’re paying twice as much for wood.”

And with a short season to work with and high permit rates, the trend adds further evidence of the costly nature of this tourist destination.

Tahoe homeowners’ policies – which include fire insurance – average between $600 and $1,500 a year. Each year the average climbs about 4 percent. Tahoe has been known for lower loss ratios because fires are relatively uncommon. But when disaster happens, the loss may be as detrimental as that experienced by 1,000-plus homeowners last summer after the San Bernardino and San Diego county fires. Garamendi recently tried to appease them with a pledge of lower premiums as a result of a recent overhaul in the workers compensation system.

Insurance companies – which typically make less on premiums than on their investments – have answered the call for relief on an individual basis. A year ago, Allied Insurance raised its amount of coverage by about $75,000 from $100,000.

At any rate, insurance agents strongly suggest a review of one’s policy.

“It’s going to be the ones who haven’t spoken to an agent in years who need the re-evaluation the most,” said Fromarc agent Tita Anderson, who serves on the region’s Fire Safe Council.

“We’re about two months ahead of schedule for moisture content,” she said, echoing the sentiment of concerned fire crews around the lake.

– Susan Wood can be reached at (530) 541-3880 or via e-mail at

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