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Post Fire Insurance Santa Clarita Wildfires and policy changes by Scott Wilk interviewed by SantaClaritaOpenHouses.com · Connor with Honor: AI, Real Estate and Real Life

• 0:03
  SPEAKER_00: Hey everybody, thank you so much for tuning in today.
• 0:05
  SPEAKER_00: I am Connor with Honor.
• 0:07
  SPEAKER_00: We are with Santa Clarita Openhouses.com.
• 0:10
  SPEAKER_00: There's been a lot in the world regarding insurance, a lot of news, and especially how it applies to Southern California.
• 0:16
  SPEAKER_00: Here, what we've been watching lately is we have fires again upon us in Santa Clarita and the vicinity.
• 0:22
  SPEAKER_00: And I do know that every time some kind of a natural disaster starts to happen, then we see insurance companies seem to pull back a little bit.
• 0:30
  SPEAKER_00: And I wanted to bring Scott Wilk, he's an expert in the local insurance industry and is with the Woodlands Financial Group and just absolutely fantastic.
• 0:40
  SPEAKER_00: He has done miracles for clients of mine in the process of buying real estate.
• 0:46
  SPEAKER_00: When you would think broker and broker kind of the same, as some kind of people believe real estate agent, real estate agent kind of the same.
• 0:54
  SPEAKER_00: I I can't tell you, Scott, these poor people they were talking about four and five weeks just waiting to hear back, and you finished it.
• 1:04
  SPEAKER_00: I mean, just like in a regular time frame.
• 1:06
  SPEAKER_00: So how are you today?
• 1:08
  SPEAKER_01: Yeah, good.
• 1:08
  SPEAKER_01: And I mean, I think a lot of that has to do with market access.
• 1:11
  SPEAKER_01: So I started my insurance career at State Farm, which State Farm's, you know, a good company, but the end at the end of the day, I only had one set of products, one set of rates.
• 1:19
  SPEAKER_01: If my rate wasn't competitive, nothing I could do about it.
• 1:21
  SPEAKER_01: If State Farm didn't want the business, nothing I could do about it.
• 1:24
  SPEAKER_01: Um, as an independent broker, you get the uh ability to shop around and place people where they belong or give the insurance companies a type of business that they want.
• 1:32
  SPEAKER_01: Uh, different insurance companies are going to have different niches.
• 1:34
  SPEAKER_01: And you're right, not all brokers are the same.
• 1:36
  SPEAKER_01: Um, an individual broker doesn't necessarily have the ability to go to the entire insurance market.
• 1:42
  SPEAKER_01: Uh, you have to be contracted with the uh insurance carriers in order to uh write business with them.
• 1:48
  SPEAKER_01: So I'm with TWFG Insurance.
• 1:51
  SPEAKER_01: This is my third brokerage.
• 1:52
  SPEAKER_01: I started my career with Goosehead Insurance, where I had access to about 30 insurance companies, rolled my contract over to Penguin Insurance, where I had 60 insurance companies, and then TWFG acquired Penguin through an through an acquisition and it ballooned to over 300 insurance companies.
• 2:08
  SPEAKER_01: So people ask me all the time, how are you able to get these things done where no other insurance agent is able to do it?
• 2:13
  SPEAKER_01: It just has to do it mainly has to do with market access.
• 2:15
  SPEAKER_01: I have more markets out there than anyone else.
• 2:17
  SPEAKER_01: So as we've seen, so many companies have been leaving the state or freezing new business, uh, but I've still been able to find people insurance because I've got the market access, others don't.
• 2:27
  SPEAKER_00: I wanted to ask you with regard to that, whenever somebody reaches out to you, and I'm sure after the show today, we're gonna have several inquiries.
• 2:35
  SPEAKER_00: What is that best point of contact?
• 2:37
  SPEAKER_00: Let's start with that, just in case somebody wants to come back to the show later.
• 2:40
  SPEAKER_00: Is that gonna be your the uh 661-3133762?
• 2:46
  SPEAKER_01: Yeah, that's my cell.
• 2:47
  SPEAKER_01: They're always welcome to reach out to that.
• 2:48
  SPEAKER_01: I do have um an office line as well.
• 2:50
  SPEAKER_01: I have 12 agents in my office.
• 2:52
  SPEAKER_01: Um, by the end of the summer, that should be up to 14, possibly 15.
• 2:57
  SPEAKER_01: So um onboarding two more, and uh another one is uh going through his licensing um right now.
• 3:02
  SPEAKER_01: So we've we've grown pretty significantly, and we've grown so much uh because of the high demand.
• 3:08
  SPEAKER_01: Uh with so many people having difficulty getting um insurance.
• 3:11
  SPEAKER_01: You know, I've been uh uh I've been seen as the person in Santa Clorita who's been able to get things done, still give people affordable insurance rates.
• 3:18
  SPEAKER_01: So, you know, a little over a year ago, year and a half ago, I had maybe four people in my office.
• 3:22
  SPEAKER_01: You know, now I have you know an an extra 10 just because we've needed that to keep up with the uh with the demand of all the referrals we've been getting.
• 3:30
  SPEAKER_00: Well, and that's exactly why we're doing the show today to talk about the fires.
• 3:35
  SPEAKER_00: So I want to get to that because I know people are very, very concerned about what's going to be happening.
• 3:41
  SPEAKER_00: It's like every time we have some kind of natural disaster, whatever real estate transactions are in process, they stop.
• 3:48
  SPEAKER_00: Everybody stops because no insurance is moving for the present time.
• 3:52
  SPEAKER_00: What does it look like out there now for this?
• 3:55
  SPEAKER_01: Yeah, so so far with the uh post fire, I believe it's called, uh, I haven't hadn't heard any moratoriums come through yet.
• 4:02
  SPEAKER_01: Uh, but you're right, we do tend to see that if there's a big wildfire that's threatening certain communities, uh, insurance companies will put temporary moratoriums in place because let's be honest, what insurance company is going to want to put insurance on a home that's you know being currently threatened by a wildfire?
• 4:16
  SPEAKER_01: Uh it's just it's just not a good risk for the insurance companies.
• 4:19
  SPEAKER_01: And a lot of people kind of misunderstand um how uh fire claims work and how wildfires really affect things.
• 4:25
  SPEAKER_01: We think of homes burning down, yes, that happens, but uh smoke and ash damage is actually one of the most um expensive things that happen during wildfires because you can have smoke and ash damage claims miles from where you know the fire stops, um just with with how the with how the wind patterns work and how they blow the smoke and ash damage.
• 4:44
  SPEAKER_01: And a lot of homes are built to be more fire resistant.
• 4:46
  SPEAKER_01: Uh a couple of years ago, I had a customer who um had a wildfire burn down her hillside, burn up her backyard.
• 4:53
  SPEAKER_01: The home wasn't touched, but you know, her her um you know, the inside was uh filled with, you know, smoke, ash, soot.
• 5:00
  SPEAKER_01: She had to get the entire house deep cleaned, she had to get all of her um, you know, furniture deep clean, she had to get all of her clothes replaced.
• 5:06
  SPEAKER_01: That was a you know pretty expensive claim.
• 5:08
  SPEAKER_01: And even though there was no fire damage on the inside, it was still you know significant money that the insurance company paid out.
• 5:13
  SPEAKER_01: So when people say it's like, hey, you know, I'm surrounded by concrete, how is my home still a fire risk?
• 5:18
  SPEAKER_01: It's the smoke and ash damage.
• 5:20
  SPEAKER_00: You know what?
• 5:20
  SPEAKER_00: People don't even expect that there's other things that happen besides houses burning down.
• 5:25
  SPEAKER_00: Never even thought of that, I guess, unless you've gone through it.
• 5:29
  SPEAKER_00: How do you see this affecting this particular market as it unfolds, or do you believe it doesn't seem to be a lot of residences subject to it?
• 5:39
  SPEAKER_00: And I'm not even sure if any have burned at this point.
• 5:42
  SPEAKER_01: Yeah, so so far this has not seemed as significant as a lot of the other wildfires we've had.
• 5:46
  SPEAKER_01: And you know, uh thank God last year was a pretty calm wildfire year for us.
• 5:50
  SPEAKER_01: If you look at the three years prior to that, we had seven of the top 10 wildfires in California history, and that's really when we saw uh most of the market shut down.
• 5:59
  SPEAKER_01: We saw most companies, you know, leave the state or uh stop writing new business.
• 6:04
  SPEAKER_01: Um, we have been seeing a lot of things on the national level, and you know, the state stuff is going to affect the local state markets, but the national stuff can affect it as well because it affects the insurance carriers' national portfolios.
• 6:16
  SPEAKER_01: So State Farm, for example, had a$6.8 billion underwriting loss in 2022, and it went down to 6.3 billion loss in uh 2023.
• 6:27
  SPEAKER_01: And it wasn't just that wasn't just California, that was, you know, hurricanes, that was things happening um everywhere.
• 6:32
  SPEAKER_01: So uh roughly uh 20 to 25 years ago, we had the Texas mold crisis.
• 6:37
  SPEAKER_01: That was the first uh bill, that was the first billion dollar uh insurance disaster that the nation had.
• 6:44
  SPEAKER_01: Um in 2023, we had 24 billion dollar disasters.
• 6:48
  SPEAKER_01: So that really shows how significantly uh things have changed and insurance companies have been having to pay out you know a lot more money than they had previously, which causes everything to tighten up.
• 6:58
  SPEAKER_00: Here in Santa Clarita Valley, we see that some of the condominiums townhomes, those places don't have any ability to get insurance.
• 7:08
  SPEAKER_00: Are are you hearing are you hearing about this?
• 7:11
  SPEAKER_00: And is there a remedy or yeah?
• 7:13
  SPEAKER_01: And that's actually affected us personally.
• 7:16
  SPEAKER_01: We have um a rental in West Creek that we've been we've been trying to sell.
• 7:20
  SPEAKER_01: We wanted to sell it when we um were upsizing when we had our baby, and uh we weren't able to sell it because you know we uh the buyers were having trouble uh getting funding.
• 7:30
  SPEAKER_01: It's a it's a little bit it's a little bit of a different issue.
• 7:32
  SPEAKER_01: Um it's not that the units themselves aren't insurable, they are.
• 7:37
  SPEAKER_01: The issue is that um so many companies are no longer insuring HOAs for the master policy.
• 7:44
  SPEAKER_01: So uh lenders are refusing to lend in these communities because the master policies are are so underinsured or in some cases, you know, uninsured.
• 7:53
  SPEAKER_01: And that's that's uh that's something that the state of California is looking at uh very closely and trying to come up with new regulations that can help with that.
• 8:01
  SPEAKER_01: But you know, when you're looking at a you know uh condo community where the uh you know you can you could possibly need$50 million worth of coverage and it's in a high fire zone, you know, not a lot of insurance companies are going to volunteer to insure you know$50 million in a high risk fire zone where they think there's gonna be you know a high likelihood that there's gonna be a disastrous claim.
• 8:23
  SPEAKER_00: No, you're absolutely right.
• 8:24
  SPEAKER_00: That's yeah, why jump in when they can make better profits elsewhere?
• 8:29
  SPEAKER_00: That's no doubt.
• 8:31
  SPEAKER_00: Let me ask you, with regard to the buying of uh residential real estate, I remember going through the escrow processes prior to the last six, eight, ten months.
• 8:41
  SPEAKER_00: Usually we kind of had the buyers wait.
• 8:43
  SPEAKER_00: We didn't really do it up front.
• 8:45
  SPEAKER_00: I mean, everything kind of seemed about a thousand, about 1200, about 1500.
• 8:49
  SPEAKER_00: I mean, it was kind of all expected in the single family world, even Condo Town Home.
• 8:53
  SPEAKER_00: Now, what's that suggestion for buyers contemplating to buy anything?
• 8:58
  SPEAKER_00: Call first, maybe talk to you a little bit.
• 9:01
  SPEAKER_01: Yeah, so a couple things with that.
• 9:02
  SPEAKER_01: First of all, there's the insurance estimates, and then there's the timelines for it.
• 9:06
  SPEAKER_01: So we definitely, and I've always recommended get the insurance shopping done first, just so you're never unpleasantly surprised.
• 9:12
  SPEAKER_01: But you know, you're right, most buyers wait until the last minute.
• 9:14
  SPEAKER_01: And I always advise, you know, my lenders and my realtors that work with me, you know, as soon as you open up an escrow, call me and let me do quotes.
• 9:20
  SPEAKER_01: The customer's allowed to use whatever insurance company they want, but we know that um, you know, buyers often wait till the last minute, even if they're told not to.
• 9:28
  SPEAKER_01: And their insurance company may or may not be able to do it.
• 9:31
  SPEAKER_01: So, you know, so many uh realtors will come to me and say, Hey, Scott, you know, emergency situation, we're trying to close escrow today and we don't have insurance yet because the buyer didn't get it taken care of.
• 9:40
  SPEAKER_01: And um, you know, with that short of a time frame, I may or may not be able to help.
• 9:45
  SPEAKER_01: Um, back when I first opened my independent brokerage in 2017, the average rate for California home insurance policy was about 925.
• 9:55
  SPEAKER_01: It's probably triple that now.
• 9:56
  SPEAKER_01: Um, and we could pretty much instantly bind any type of business we wanted.
• 10:01
  SPEAKER_01: Now, most of the preferred carriers, you know, your Mercury, your nationwide progressive Safe Co travelers, you know, whoever, whoever you go to, they're still going to be instant bind, but they may or may not be taking the business.
• 10:12
  SPEAKER_01: So if we have to go through California Fair Plan, for example, which is the last resort insurer for people who can't otherwise get fire insurance, there's a waiting period.
• 10:21
  SPEAKER_01: So if you're coming to me and saying, you know, we need to close escrow within 24 hours, that that may or may not be possible, depending on the features of the home.
• 10:28
  SPEAKER_01: So I always say, you know, help me help you guys.
• 10:30
  SPEAKER_01: If you give me advanced notice so I can make sure it's done early, then insurance isn't going to hold up your closing.
• 10:37
  SPEAKER_01: If you wait, if you wait uh till the last second to call me, insurance may hold up the closing.
• 10:42
  SPEAKER_00: I wanted to ask you, too, in in reference to closings, when a seller is contemplating putting their home on the market, they might have had insurance from some company that only is being there currently because they're being grandfathered, I guess.
• 10:57
  SPEAKER_00: Correct.
• 10:58
  SPEAKER_00: Is it a good idea to maybe have them reach out as well?
• 11:01
  SPEAKER_00: Because what if that buyer?
• 11:02
  SPEAKER_00: I mean, that's something a seller might want to know what the insurance capability of buyers are.
• 11:07
  SPEAKER_01: Yeah, yeah, uh, yes and no.
• 11:09
  SPEAKER_01: So, first of all, insurance policies are not transferable.
• 11:11
  SPEAKER_01: There actually is a new carrier entering into the market, which right now is just doing high value homes.
• 11:16
  SPEAKER_01: And by high value homes, I mean, you know, dwelling amounts of over, you know, five million dollars.
• 11:21
  SPEAKER_01: And I'm not even talking about property values, I'm talking about reconstruction costs of over five million dollars.
• 11:25
  SPEAKER_01: They are going to be the first um insurance company on the market that is going to let policies be transferable from um seller to buyer, and we may see more insurance companies follow suit, assuming that business model works out.
• 11:38
  SPEAKER_01: But typically insurance company uh insurance policies are not transferable.
• 11:41
  SPEAKER_01: Um, even in my state farm days when we had uh some zip codes uh shut down, I had a I had a borrower that um, you know, owned a home and he literally bought the home right next door because it was it was a bigger home and they needed to upsize.
• 11:55
  SPEAKER_01: And State Farm wouldn't issue him a policy because that zip code was closed.
• 11:58
  SPEAKER_01: It was open when he bought his current home.
• 12:01
  SPEAKER_01: It was close to the next one.
• 12:02
  SPEAKER_01: He said, I'm literally moving right next door.
• 12:03
  SPEAKER_01: Sorry, still, you know, still can't help you with that.
• 12:05
  SPEAKER_01: Um, so some realtors, when they get listings, do ask me to do dummy insurance quotes.
• 12:11
  SPEAKER_01: That may or may that'll give you a ballpark idea because the um the individual who is buying the actual buyer, their insurance score does affect it as well.
• 12:20
  SPEAKER_01: So, for example, date of birth is a rating factor.
• 12:23
  SPEAKER_01: So someone born in the 80s is going to have a different rate than someone born in the 60s.
• 12:26
  SPEAKER_01: And then if that buyer has insurance claims in their background, that could affect both rate and eligibility.
• 12:33
  SPEAKER_01: So I could do a quote with a dummy buyer, that would be acceptable.
• 12:37
  SPEAKER_01: But if the actual buyer, you know, let's say filed two claims in their previous home, you know, I can't use that, I can't use that quote for them.
• 12:44
  SPEAKER_01: They might get uh they might get declined on it.
• 12:46
  SPEAKER_01: So it doesn't hurt to kind of get an idea, but it's not going to be 100% accurate.
• 12:51
  SPEAKER_00: I wanted to ask in regards to insurance services, the real estate end of it, housing, those sorts of things, you have those covered.
• 12:59
  SPEAKER_00: The there are other services you have that could be maybe sisters and brothers to the real estate and insuring real property.
• 13:07
  SPEAKER_00: What are those other services you have?
• 13:10
  SPEAKER_01: Yeah, I mean, we do um we do all kinds of insurance at this point.
• 13:14
  SPEAKER_01: So, you know, uh home, auto, life, commercial.
• 13:17
  SPEAKER_01: Um, we we recently launched a health insurance division.
• 13:20
  SPEAKER_01: We're having a lot of success with uh people helping them with their Medicare needs, um, with their Medicare supplements and Medicare Advantage plans.
• 13:27
  SPEAKER_01: Uh, when I first started my brokerage, it was just me.
• 13:30
  SPEAKER_01: I just specialized in the home insurance.
• 13:31
  SPEAKER_01: I mean, I knew how to do everything else, but you know, when you're a captive agent, like you know, a state farm, a farmers in Allstate, and you only have one company to um specialize in, it's easy to specialize in all their products.
• 13:43
  SPEAKER_01: When you're working with 300 different insurance companies, it's a lot harder to be a specialist in everything.
• 13:48
  SPEAKER_01: So now that I have, you know, uh soon to be 14 team members, it's easier for us to be able to, you know, offer everything because we have us we have specialists in certain uh product types.
• 14:00
  SPEAKER_00: You know what?
• 14:01
  SPEAKER_00: That's that's actually a brilliant strategy.
• 14:04
  SPEAKER_00: You only grew as much as you could serve your clients to the best of your ability, and that's absolutely why you're so successful, Scott.
• 14:11
  SPEAKER_00: I I wanted to thank you so much for coming on to today answering some of these questions related to the post fire.
• 14:16
  SPEAKER_00: We're gonna put this up.
• 14:17
  SPEAKER_00: I'll get it on all the social media, but you're the Woodlands Financial Group, Scott Wilk, ladies and gentlemen.
• 14:23
  SPEAKER_00: Thank you so much, Scott, for everything.
• 14:25
  SPEAKER_00: And anything in closing?
• 14:28
  SPEAKER_01: Yeah, no, just it's it's important to make sure you know you're shopping early to get things done.
• 14:32
  SPEAKER_01: I think you had other questions about non-renewals.
• 14:34
  SPEAKER_01: Did you want to go into any of that?
• 14:36
  SPEAKER_01: I know you've asked me about that recently.
• 14:38
  SPEAKER_00: Absolutely.
• 14:39
  SPEAKER_00: What I wanted to do is we can definitely make that for a future show.
• 14:42
  SPEAKER_00: Okay.
• 14:42
  SPEAKER_00: Yeah, no problem.
• 14:44
  SPEAKER_00: Talk about that.
• 14:44
  SPEAKER_00: But this is a good snip, and I'll be able to pull many shorts.
• 14:47
  SPEAKER_00: I'll just now extract this bit of data out of the video and snip it with the closing, if that's cool.
• 14:53
  SPEAKER_01: Sure.
• 14:53
  SPEAKER_01: Yeah, that's fine.
• 14:54
  SPEAKER_01: So yeah, no, Connor, just thank you.
• 14:56
  SPEAKER_01: Thank you so much.
• 14:57
  SPEAKER_01: Um, all I'm gonna say is in the future we are looking at things getting uh being better.
• 15:01
  SPEAKER_01: So insurance rates, as you know, have skyrocketed in the last few years.
• 15:04
  SPEAKER_01: Lots of reasons for that that we can go into in uh in future interviews.
• 15:08
  SPEAKER_01: But I think that prices are about to bottom out, so to speak.
• 15:11
  SPEAKER_01: We're seeing insurance companies are still losing money, but they're not losing money hand over fist like they used to used to.
• 15:16
  SPEAKER_01: And um, Sacramento is now laser focused on what's going on, whereas I think before it wasn't as big of a priority for them.
• 15:23
  SPEAKER_01: So there's been a lot of regulatory changes that are coming.
• 15:26
  SPEAKER_01: So I think the next one to two years, we are going to see a more stable market and see uh things kind of even out a little bit.
• 15:31
  SPEAKER_01: But in the meantime, you know, work with a local independent insurance broker and uh do your due diligence, do your homework early.
• 15:37
  SPEAKER_01: And uh think thank you for your service, Connor, and thank you for you know having me and thank you for what you do for the residents of Santa Clarita.
• 15:44
  SPEAKER_00: Thank you very much, Scott.
• 15:45
  SPEAKER_00: I really appreciate it, and we'll be back with another one with you.
• 15:48
  SPEAKER_00: Have a fantastic day.
• 15:49
  SPEAKER_00: Best of your team.
• 15:50
  SPEAKER_00: All right, thank you so much.
• 15:52
  SPEAKER_00: Take care.
• 15:53
  SPEAKER_00: All right, very good, brother.
• 15:55
  SPEAKER_00: I will snip it in those places and splice it together.
• 15:58
  SPEAKER_00: I'll put it all uh put it all together.
• 16:00
  SPEAKER_00: I'm gonna see how many shorts I can pull off of it and change the format a little bit, but it'll be awesome that I'll send you a link.
• 16:06
  SPEAKER_00: All right, perfect.
• 16:07
  SPEAKER_00: Thank you.
• 16:08
  SPEAKER_00: Appreciate you.
• 16:08
  SPEAKER_00: Yeah, I'll talk to you soon, my friend.
• 16:10
  SPEAKER_00: Be well.