HAR President Bob Hale used the January 17 edition of his weekly Insights email to members to focus on the California wildfires. He noted that the impact will extend far beyond the affected regions, as insurance companies grapple with the challenge of covering the enormous costs of the disaster in and around Los Angeles.
Texas Perspective
Mr. Hale also noted that, although Texas isn't typically known for wildfires, CoreLogic (the provider of HAR’s Multiple Listing Service) ranks Texas third in terms of the number of homes at risk of wildfires. 233,434 Texas homes are at risk for wildfire. Texans can assess their risk using The Texas Wildfire Risk Assessment Portal at https://wrap.texaswildfirerisk.com/Map/Public/#whats-your-risk.
Houston Area
A test search of The Texas Wildfire Risk Assessment Portal showed a Forza team member’s home in the “Minimal Direct Impact” zone. However-- recalling the above information regarding the distance an ember can travel-- further searching showed a small area of “Very High” risk less than two miles away. While—aside from embers-- we likely don’t have to worry about insurers pulling out of our area due to fire risk, we are already seeing them exit due to increased hurricane risk. In fact, the six most expensive natural disasters in recent US history were hurricanes
You can also assess your home’s risk for rising sea level at https://coast.noaa.gov/slr/ and for coastal flooding at https://coast.noaa.gov/digitalcoast/tools/flood-exposure.html. Test searches of these run on the same team member’s home also showed minimal risk—despite its location further East and South of Forza’s offices.
Forza Clients
Clients of Forza Real Estate Group should feel well-prepared to face insurance and environmental uncertainty. In addition to the risk-mapping tools linked above, Texas Real Estate Commission rules require buyers to sign a specific disclosure as part of the purchase contract pertaining to any property located in a flood zone. Prior to 2019, properties in 100-year flood zones always had to disclose flood zone status, but a 2019 change to Texas' real estate disclosure law that introduced requirements to disclose when a property is in a moderate risk flood zone and increased the prominence of all flood-related disclosures. This change helps buyers to stay ahead of climate change impacts, as it builds in protection against intensifying risk by predicting that flood zones will expand.
With flood zone maps and the modeling tools linked above, buyers have access to many resources to pinpoint their home search, allowing them to locate a property with a risk profile they can tolerate. Once such a property is located-- protected from flood risk by TREC disclosure rules-- it is further protected by the option period. During this time, the property will be inspected and any prior flood damage will be discovered, along with any fire risk from nearby brush or electrical issues.
Once the property is deemed safe and structurally sound, the buyer is even further protected by the mortgage process, which will require proof of homeowner’s insurance before final approval. If the property is not insurable, or if the cost of the insurance increases the mortgage payment above a certain debt-to-income ratio, the mortgage will not be able to go forward and the buyer is entitled to a refund of their earnest money, per the Third-Party Financing Agreement.
Finally, Forza buyers are protected by Fabiola’s fifteen years of insurance experience. Even after you’ve chosen an appropriately-located and insurable home, you still may be at risk for high deductibles or inadequate coverage in the event of a claim. Each of our buyer clients has the opportunity to use our team to solicit, compile, evaluate, and compare multiple homeowner’s quotes to ensure the best coverage is selected. We also direct buyers to the Government website for policy comparisons, where shoppers can choose companies from drop-down menus and see a side-by-side comparison of each coverage, at http://www.opic.texas.gov/residential-property/compare-policy-coverages/homeowners. Their comparison charts are easy to understand and draw attention specifically to water damage coverage, displaying coverage limits and distinctions between different sources and types of water damage.
