It’s no secret that it’s becoming difficult for many homeowners to find insurance as major carriers leave the state. But it could hit businesses even harder, especially those in wildfire-prone areas.
A business owner in Sonoma County said spending so much time chasing insurance policies makes it difficult to pursue his dream.
It was another beautiful Memorial Day on the Russian River, and the streets of Guerneville were busy. That should have made it a profitable weekend for Bryce Skolfield’s bed-and-breakfast, but instead it might have been just enough to break even.
“When you change careers, go into a completely different industry and buy a property like this, you obviously have a lot of concerns,” he said. “Insurance wasn’t on the list, to be honest.”
Skolfield opened his Mine + Farm Inn in 2019, just days before the Kincade Fire broke out, and a few months before the pandemic shut down business. But once those obstacles passed, insurance became the biggest problem.
“We immediately noticed that prices increased exponentially,” he says. “So we’ve seen the price increase by 222 percent since we bought the property.”
Although there are many trees on the property and nearby, Skolfield does not feel it is a particularly dangerous location. He installed a 5,000 liter water tank, with sprinklers on the roof and over the entire green site of 3 hectares.
The land is surrounded on three sides by the vineyards of the Korbel winery and is located right next to a Cal fire station. Yet he has dropped his insurance with a number of different companies and has now joined the overburdened California FAIR plan as an insurer of last resort.
“I don’t think it’s anything personal. I think we’ve just gotten caught up in this brand bureaucracy, you know, where they just want to get out of the market,” Skolfield said.
Insurance broker and industry analyst Karl Susman said as bad as things are for homeowners, it’s even worse for businesses because there are fewer carriers offering that kind of coverage. But he said efforts now underway in Sacramento to reform the way insurance is priced could bring more competition to the state market.
The plan, called the ‘Sustainable Insurance Strategy’, would give insurers more leeway in assessing risks – and policy costs – on individual properties, rather than grouping them under a common zip code. The new regulations should be ready by the end of the year, but Governor Newsom said the state cannot wait that long and that some parts of the plan could now be adopted within the next 30 to 60 days.
“The good news is that for the first time in a long time, I can tell you that in the coming months, quarters or certainly early next year, we will see a dramatically different insurance market than we see now. ,” said Susman.
While Bryce thinks this will make insurance more available, he is skeptical that it will reduce costs much. And even though he’s made almost nothing from the company, he doesn’t really have much of a choice.
The dream of running a country inn may have come true, but insuring it was a rude awakening.
“You’re so focused on giving you a high-quality product, but there’s a point where you go: How much of this can I take?” he said. “How long can I stay committed to this endeavor before I start to lose some of the core principles of why I started doing this in the first place?”
It’s just one man’s experience, but it’s a common problem for many businesses that, through no fault of their own, have the threat of a forest fire hanging over them.
John Ramos
