How do you weigh the fire risk in the Tahoe area? The Palo Alto area has smoke risk, and some PSPS risk, but not much risk of straight up burning down. But homes in Tahoe are at significantly more risk of fire, right? Is it possible to get fire insurance there?
Just a PSA: home insurance companies have been dropping fire coverage in CA so quickly now that there's a state-mandated stay to prevent them from doing it for a year.
No word what the plan is after the stay but I would be cognizant of any insurance plans that you get.
My sense is that the folks buying $2M+ homes in the Bay Area or $1M+ homes in Tahoe have enough money in the bank that they could just rebuild in cash on the off chance that their home gets burned down. At that price point you're largely paying for the land. Cheap structures (which abound in Tahoe) can be built for ~$250K, while even a really fancy 4000+ square foot mansion in Los Altos can be built for < $1M. Most of the mid-level FAANG employees and ex-startup/growth folks easily have that much in liquid assets.
At some point we need the federal government to step in to provide wildfire insurance a la federal flood insurance. It will have to be reworked for CA considering the flood insurance only goes up to 250k.
Or we could incentivize people not to live in places with wildfire risk by NOT offering insurance (with some sort of graded phase-out for people already living there).
Don’t worry, California and other states with wildfire risk are not swing states so there’s not much chance of something similar to the NFIP being created.
The person who bought my place last year ended up paying over $6000 a year for insurance via CalFAIR (no fire hydrant nearby). When I bought it in 2013 - it cost about $800 a year. There are definitely people who can't get regular insurance and end up paying a lot for meh insurance.
Do houses in those areas have built-in or compulsory fire protection systems? Some Australian rural houses have roof mounted sprinklers (exterior of the building), water tanks reserved for fire fighting, and so on. I did some drone work for an insurance company after our last fire season, and got photos of places where the fire had been stopped literally a metre short of a building. Either irrigated gardens, protection systems or fire fighters.
For one house that we were interested in, in an area that's not super risky (which is very relative), it's about $2500 per year through CalFAIR. That's only for fire, and doesn't include any other aspect of homeowners insurance.
