New Year, New Rules

Every year, a ton of new laws take effect in California, including some that could impact your personal and household finances. Here’s a rundown of the changes from Patch California. Keep reading for our takes on some that might get missed…

CHIC (Pearl)

A number of the new rules have to do with consumer protections, including SB 1490, which requires food delivery platforms like DoorDash and Uber Eats to provide an itemized breakdown of their fees. This law also allows restaurants to remove themselves from delivery apps they never intended to use. And if you’re tired of following the breadcrumbs to cancel subscriptions you no longer want or need, it will be easier starting July 1 thanks to AB 2863, which requires companies like gyms and streaming services to let customers cancel their subscriptions in the same way they subscribed — more often than not with a single click.

GEEK (Kevin)

If you’re a mobile home owner who’s been battling with your HOA or park ownership over solar panels, then SB 1190 should help. This new law clearly stipulates your right to install a solar system just like any other homeowner in an HOA. (A loophole in a 1978 law previously allowed park owners to block you from doing so.) And in other news that could save you money, SB 1061 ensures medical debt is removed from your credit report so you’re “not penalized for the high costs of necessary healthcare," as the Governor’s office said. This law will also prevent lenders from using medical debt against you to deny a loan.

Running the Carrier Numbers

When it comes to home insurance, it’s one thing to find a policy that fits your home. It’s another to find a policy that fits your budget. Surplus lines carriers can check both boxes. These “non-admitted” carriers don’t come with California Insurance Guarantee Association protections. But they’re a flexible option if your current provider kicks you to the curb. Just run the numbers using a service like A.M. Best to make sure they’re financially sound.

Fighting Fire with Insurance

Insurance companies are shying away from new policies in California and raising rates on existing customers after years of wildfires have devastated their bottom line. How can you keep your current plan or find a new policy that fits your budget?

CHIC (Pearl)

If your insurance company tells you they’re not renewing your policy, don’t panic! You’re entitled to 45 days notice before the policy expires, which gives you time to shop around for a replacement policy or renegotiate with your current provider. If you don’t receive proper notice, don’t hesitate! Call the California Department of Insurance (DOI) at 1-800-927-HELP or go online to insurance.ca.gov and check to see if your policy has a guaranteed renewal provision. And if you think you’re out of options, you’re not. Call the California FAIR Plan at 1-800-339-4099. FAIR warning: This policy can be expensive, and it only covers certain losses, so you may need to buy Differences in Conditions (DIC) insurance too.

GEEK (Kevin)

Who wants to spend all day and night and part of the weekend filling out forms and running themself ragged with research? Okay, some of us love this kind of stuff. But for the rest of us, I recommend getting an insurance agent. The DOI website offers a tool to help you find an agent or broker near you, as well as other resources. Before you decide on an agent, check to see if they work exclusively with one insurance company or have access to multiple carriers so you know you’re getting the best deal. And come prepared with questions for your agent such as: What is covered and what is not? Can I get the full cost to rebuild if disaster strikes? Does it cover demo or debris removal? Is there a coverage limit?

Uninsurable?

As building costs, fraud, and risk from wildfires and other climate disasters continue to rise, some insurance companies are backing away from issuing new homeowner policies in the Golden State. What does this mean for potential buyers and sellers?

CHIC (Pearl)

If you’re thinking of buying a home in California, you should get a head start on finding a home insurer who will give you a good policy at an affordable rate before making an offer. Understanding your annual expenses is a key factor in determining how high you’re willing to go.

GEEK (Kevin)

Insurance companies aren’t nonprofits, and they’re not stupid either. They already know the risks of insuring properties in earthquake country, and the recent trend of wildfires hasn’t made the equation any more favorable to them. In other words, don’t hate the player, Hate the game!

Chic vs. Geek: What causes low inventory?

This week, we explain the variety of factors at play in a hot and competitive housing market.

CHIC (PEARL)

Low Interest Rates

Low interest rates are great for homebuyers, but they also make it easier for homeowners to keep their current homes and buy another, rather than selling. Over the last decade, an estimated 7 million properties have been taken off the market by homeowners and businesses investing in rentals. This is evident in the success of rental companies like Airbnb and VRBO.

Aging in Place

More and more Baby Boomers who bought low decades ago are choosing to stay in their homes and “age in place” – especially in the uncertain age of COVID. With prices soaring across California and the nation, where would they move?

Coming of Age

Meanwhile, the largest generation in history, Millennials, is about to hit the median age of a first-time homebuyer. That means an even greater strain on an already limited inventory and a fiercely competitive market into the foreseeable future.

GEEK (KEVIN)

We’re Not Building Enough

Ever since the housing bubble burst 12 years ago, homebuilders have slowed their pace and become more risk averse. According to Census data, an average of 1.5 million homes have been built each year in America since 1959. However, over the past decade, the pace has slowed to just 900,000 homes a year. Limited production, coupled with enticingly low interest rates and a generation of first-time homebuyers all combine to exacerbate the crisis.

Housing Policy

The CARES Act foreclosure moratorium has kept financially distressed homeowners from selling, but foreclosures were already at record lows before the pandemic. In fact, according to a recent report from CoreLogic, U.S. homeowners have seen their equity increase by $1 trillion since the third quarter of 2019, an increase of 10.8% year over year. So, even with 2.5 million homeowners in the mortgage forbearance program, we shouldn’t expect a wave of foreclosures when the moratorium is lifted.