The wildfire risk in Diann Dumas’ neighborhood is very, very low. And yet it’s making her bills more and more difficult to pay.
She lives in Village Green, a park-like condo complex just north of Baldwin Hills. The hundreds of 1940s townhomes and bungalows encircle a manicured green space. The giant sycamore trees and smell of fresh cut grass completely obscure the noisy streets of South LA that surround it. It’s a far cry from the tinderbox hillsides that have scared away insurance companies.
On the dining room table in Dumas’ one-bedroom condo is a small stack of recent homeowners association (HOA) bills that pay for maintenance, landscaping, and insurance costs. Those bills are the centerpiece of her living room, and, as of this year, the crux of her concerns.
“I just had no idea what the costs would be,” Dumas says.
Dumas remembers when she first arrived at Village Green in 1990 after she got divorced. “I went inside and saw the center and I thought, ‘Oh my God, it’s a park in here.’ I couldn't believe it. I had lived here all this time and didn't know about it. And that's what everybody says when they come.”
A one-bedroom goes for less than $600,000. A two-bedroom goes for less than $800,000. By LA’s standards, that’s relatively affordable.
Or rather, it used to be.
Dumas saw her HOA fees increase 20% this year. She expects to rise again next year. Photo by Caleigh Wells/KCRW
Last spring, the complex’s insurance costs went up. Dumas’ fee went up 20% this year, from $523 per month to $628 per month.
“This insurance thing is going up so fast, so high,” she says. “With my income frozen with Social Security and a pension, I have to be really careful.”
She downgraded to the cheapest TV package she could find. She canceled her subscription to the daily LA Times newspaper. “I thought I would never do that,” she says.
But that’s probably just the beginning. That 20% increase is the maximum allowed by state law. The insurance on the whole condo complex actually went up 400%, and Dumas has every reason to think a lot more of those higher costs are also headed her way next year.
The landscaping in the center of Village Green and the busy, wide streets around the perimeter make for a very low wildfire risk. Photo by Caleigh Wells/KCRW
There are a few factors here, some of which only affect condo complexes.
One is insurance companies’ reaction to the collapse three years ago of the Surfside condo complex in Florida that and killed 98 people. The building had a lot of steel that corroded, and it turned into a massive insurance claim. That’s made companies more wary.
“Condominium complexes are having a hard time getting insurance now,” says California Association of Realtors President Melanie Barker. “Insurance companies are like, ‘Oh no, if you can't prove you've done all of these things, either retrofit or built a certain standard, then it sounds pretty expensive.’”
Another problem for condos: Insurance companies have gotten more worried about the risks that come with a bunch of people living really close to each other.
“That’s a lot of risk in just one small location. So if there is a fire, that fire is going to possibly hurt or destroy a large proportion of what you’re insuring,” says California Legislative Action Committee Insurance Task Force Chair Kimberly Lilley.
The third problem – and this one affects everyone, condo owners and single-family homeowners alike – is climate change.
As the nation faces more wildfires, more flooding, more hurricanes, insurance companies are paying for a lot of damaged and destroyed houses. And everyone with homeowners insurance is bearing the brunt of it.
“The definition of insurance is that we're all in a pool together. And there's some high risk and there's some low risk, and that's how the carriers can manage it,” says Lilley.
It’s similar to health insurance. Those of us who are healthy pay to subsidize those of us who have chronic conditions, or got unlucky and broke a collarbone.
“Folks get sick or something burns down,” Lilley says by way of example. “That's way more than the cost of the premiums they've paid into. Someone else is paying for that. And when we have the benefit of that, we're very happy. But when someone else has the benefit, we might turn around and say, ‘But wait a minute, why should I pay for them?’ And the answer is because they would pay for you.”
Dumas understands the idea in theory. But in practice, the insurance spike is forcing her into a bleak reality.
“It's the first time I started thinking, well, I might not be able to afford to live here,” she says. “I'd have to move. I mean, really move. Somewhere that I don't want to. My family's here.”