Pilot/ WTF Is Going On With Home Insurance?

Summary

In the pilot episode of the RealView Money podcast, host AJ Seosin discusses the complexities of home insurance, particularly the recent rate increases. He explores the factors driving these changes, including natural disasters, rising home values, and the importance of governance and personal mitigation strategies. The episode emphasizes the necessity of understanding personal insurance needs and encourages listeners to engage with their local communities and insurance agents for better financial decisions.

Chapters

00:00 Introduction to RealView Money Podcast
03:30 Understanding Home Insurance Challenges
07:22 The Impact of Rising Home Values
09:23 Governance and Mitigation in Home Insurance
12:10 Summary of Home Insurance Factors

Reference:

LA Times - https://www.latimes.com/business/story/2025-04-23/the-fair-plan-grew-and-grew-and-now-la-fire-victims-are-paying-the-price

NBER - https://www.nber.org/digest/202410/disaster-risk-and-rising-home-insurance-premiums

The Guardian - https://www.theguardian.com/us-news/2025/may/21/state-farm-california-emergency-rate-hike-approval

California FAIR - cfpnet.com

Florida - https://www.citizensfla.com
Texas - https://www.texasfairplan.org/

Iowa - https://iowafairplan.com/

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Transcript

A.J. Sioson (00:01)
Hello everybody. Welcome to the pilot episode of the RealView Money podcast. My name is AJ Sioson. I'm a licensed insurance agent based out of Southern California. Been insurance in one way or another since 2007. I'm the president and ⁓ lead agent of the Canyonview Insurance Company based out of here in ⁓ Southern Orange County. ⁓ Quick history.

Worked for a few Fortune 500 insurance companies and sales and client service. Probably have had 10,000 personal finance conversations in my life and my career. And I wanted to do this podcast for the probably for the past 10 years. And about a year ago, I started, um, know, soft brainstorm. But four months ago, I really put pen to paper and, you know, did the proper research on how to do this podcast and we are finally here. Thank you for joining us, giving us a chance for structure. Each episode is going to be one question, hopefully 10 to 15 minutes long, long enough for your commute, personal finance and all the above, including insurance. ⁓ episodes should air every Tuesday. We are trying to get two episodes a week.

Give me a little time with that as we figure out how to use all the different softwares. Podcasting is tough, especially if you've never done it before. So props to the hundreds and thousands of podcasts all around the world who try to put these together, the new form of media. It is tough. couldn't say new really. It's maybe 15 years old by now. Right. Anyway, we've, I've got questions lined up obviously, but I want to hear from you.

So if you want to send a question to hi hi at realviewmoney.com, I want to read your question on the air. And if you are lucky, you know, question asker, we will send you a prize. I'm thinking right now the prize is going to be a real view money Tumblr, but coming up with the design as we speak. Okay. So send us your question. If you read it on air, either on the live show or the YouTube show.

We will send you a prize. Can't tell you exactly what that's going to be. I probably will have that decided over the next episode. We want to hear from you. Everything is on the table when it comes to personal finance. Subjects are limitless. Situations are limitless. Everybody's different. I am well aware of that. And that's why the one thing I do want to differentiate myself from other podcasts is there's no set plan that I'm going to give you.

to follow. Everybody is different. Everybody's knowledge about their personal finances is different. I want to meet you where you are. And part of that is you sending me questions to hihi at realviewmoney.com. Now let's get started.

Angelo Sioson (05:40)

According to a May 2025 article in The Guardian, State Farm has asked for two rate increases back to back this year, totaling 30 % on dwelling and home insurance. So what the F, what is going on with home insurance lately? We've got short notice cancellations, non-renewals, insane price hikes year over year. Things we'll dive in on this episode are the three main...

factors going into what is going on all at the same time, unfortunately. That's nature, the demand and cost for repairs and governance and mitigation. So we'll get into that right after this.

So reason number one, nature. According to a recent New York Times article released right after the LA fires in January, we're building more in wildfire and danger zones. We're building in danger zones all across the country, whether it be Florida and hurricanes, Texas and hurricane floods. So the notion of, we'll just live somewhere else just isn't going to happen in a growing urban and suburban sprawl.

You've got the heat waves in Phoenix. are still one of the fastest growing areas in the country. It's leveling off lately from what I understand, but it's still over the past three or four years has seen an increase in population. So pick your reasons. Events due to weather destroying homes is increasing. I remember wildfires where I grew up in the South Bay in the Bay Area.

Wildfires were somewhere that were far away, only until the past 15 years that I ever see smoke engulfing the air above me. It used to be the smog, now it's complete, ⁓ wildfire blackout. And I think you'll agree with me if you live in the Bay Area.

According to the Bureau of Economic Research, we're seeing a 30 % increase in the home insurance premiums since 2020. So just in the past five years, we have seen increases of around 30%. That's due to a lot of things. One of them is I think home insurance companies are finally catching up reassessing. Home prices have increased, cost to repairs have increased.

Another thing is now that there is a real danger for natural disasters, the cost for insurance is now being recalculated based on that.

What I want to harp down on is insurance is not something you can go without. You've got to do it so you've got to do it smartly. Renters, you are not immune from this. If there is a damage to your apartment, your personal belongings and your cost to relocate is still your responsibility. So renters insurance, know, even if you don't own renters insurance at 30 to $50 a month is something you should try to afford if you do not have that already. When you're shopping for a home,

Do your due diligence, enter the address in a state website that marks natural disasters, whether it be the South, Southwest, here in LA. Look up the address and see if there is a marking for that address. Sometimes it could be a difference of what block you live on. Okay. So for instance, I live in a canyon area.

in South Orange County. The street, two streets from me, is not a fire danger. My street is. And I can understand why. It's quite far from the wooded area that we live in. I don't see, you know, in my amateur firefighter science mind, I don't think a fire could jump before it's handled, jump the street before it's handled. 

So I can understand why that neighborhood is not now, marked for a fire danger and mine is. But using that example, it is a matter of streets. So look up the address and also insurance companies will have different markings for that set addressed, okay? Just because the state marks your home for fire danger and the fire department, local fire department marks your house for fire danger, doesn't mean the insurance company will. They have their own system.

That system is usually based on location, but also based on how many customers they have in that area. lot of situations where they sold, you know, insurance company A sold too many ⁓ homes, insurance policies in a certain zip code. Just because there's another customer coming through the door that lives in that zip code doesn't mean that they can sell.

another policy in that zip code simply because there's too much risk in one area. So doing your due diligence has to be part of the home purchase decision in my opinion. When you buy a home, when you're shopping for a home, again, go pump that address inside the state websites, pump that address by doing some shopping for home insurance before you sign escrow. Okay. You don't have to commit. Plenty of insurance agents will love to get your contact and

Point number two, something that's very positive, but also can be a huge negative. And that's the rising value of homes. If you live in a certain area, if your home is rising in value, the cost to repair it will also increase.

According to that same National Bureau of Economic Research article, renovation costs have doubled since 2018. Your insurance must have the right coverage amounts per your mortgage, But you want it to be from a reputable company that also

You don't have a choice in this matter because your insurance per your mortgage company has to cover the value of the home. Now, again, speak to a home insurance agent about this with your address that knows your area to get the right quote. Now, side note, when it comes to this emergency fund you hear everybody talking about,

If you ask me, there is no one answer to how much should I have in an emergency fund, but one minimum answer should definitely be the deductible on your home and auto insurance policies. So if you have $2,500 deductible on your home, 500 on your auto, you should have $3,000 in emergency fund minimum. Okay. Obviously we want that three months of income.

You know, I think we can all agree that not a lot of the population has that amount, but the deductibles for your insurance should be the bare minimum if you need a goal to start to establish that emergency fund. Again, renters, don't ignore this either. There's the deductible and the renter insurance. Obviously it'll be less. Don't ignore that.

Think about fireproof safes and fireproof bags for your important documents, by the way, side note again. And also when it comes to materials and cost to renovate tariffs, right? This is big in 2025. We don't know where things are going. Today is June 3rd, 2025. Home Depot says they won't raise prices, but we'll see how long that lasts. So obviously the

Greater economic climate is something you should consider when getting the right amount of home insurance to cover your rising home value. And we all wanna see our homes rise, but with that comes responsibility to get that home insurance right.

So we covered the threat, costs to pay for that threat, and now prevention, which is actually a richer subject when you think about it. I'm to start with governance and then go on to mitigation. When it comes to governance, as you've seen from the LA fires, very important to know who your fire commissions are, police commissions are, even your HOA board needs to be more involved.

elected officials, state, federal, et cetera, et cetera. Because now you have more people living in fire danger zones or hurricane zones. You need those people to be competent, professional, have experience hopefully, and know what they're doing. We should not be running into problems like the fire hydrant might or might not have water. So, you know, I don't want to get into the politics of it all, but I think we can all agree

that every hydrant in a city should have water at the ready. Okay. Simple questions like that is not a left or right Republican democratic thing to disagree on. Okay. So know those organizations, get involved if you have the time. I'll put a link to a few organizations based on location in the show notes. So you can click over to those. ⁓ again, go to our website, realviewmoney.com and you'll find that there.

You know, when it comes to your HOA policy and home insurance policy, joining, you know, thinking about that together, make sure your HOA policy has the language of it will pair exterior of your home should a fire happen. You would think that would be the case in your home insurance policy covers maybe the inside, or if your home insurance covers the internals and the frame of your home.

HOA covers the landscape around it, you know, make sure that's all in sync. I have had many conversations with clients who total all together the exterior of their home was not covered by either policy. Okay. Or the policy that they were shopping for. When it comes to mitigation, look at the trees and shrubs around you. Checked out the foundation, fire deterrent and fire alarms in your area and in your home.

Check all that now because the one thing you want to do, rule number one, the real view money podcast is ask yourself, what if this happened today? And what if this happened today? Should have an answer of A, B or C, something we could do within our budget right now. Can I trim a shrub that or overgrown tree? Can I, you know, get rid of a moss on our roof? Things like that. There's things you can do now. Ask yourself.

If this happened today, what would I do?

Check your home insurance, make sure gaps are filled with proper coverage. And I know I'm going to talk about insurance in this podcast. I come from an insurance background, even though I have a registration with Finra as a registered rep. Any wealth advisor, financial advisor worth their salt, even if they don't sell the product, should mention insurance when coming to you, no matter your budget, no matter your...

Net worth unless you're Jeff Bezos with money to burn, know I would think in my mind anybody under 20 million dollars net worth Home home or well and not home insurance, but insurance in general has to be on the table Okay, and if you're not properly doing that, I don't see how you can give a Full-on picture of a financial plan. Okay a state plan, etc so you've got

Nature?

And the dangers that it has to your house, obviously there's the are things that can happen inside your house, you know, as far as the craziness of home insurance, nature is the number one cause.

So to summarize, you've got nature, you've got rising home costs and home values, and the lack thereof, governance and personal mitigation affecting home insurance markets across the country in different ways. Hopefully you have some understanding from this episode of what's going on so that you can do your part to...

mitigate your risks because home insurance is going to be volatile until everything gets figured out. Right after the LA fire, home insurance paused their ⁓ claims in new sales business and came back three weeks later. I've talked to a few back offices and they don't even know what's going to happen in the next week. It's just too volatile.

Third-party surplus markets what's called third surplus markets are coming into play especially in states like California where there's a big market So things will change but high level These are the three things that will affect it Act accordingly

So again, what the F is going on with home insurance. Thank you for listening today. My name is AJ Sioson, the host of Real View Money podcast. Subscribe to us on Apple podcast, Spotify, YouTube, wherever you get your podcasts. Send an email to hi at realviewmoney.com. And thank you for joining us. We'll see you next week for episode two.