Despite external factors that could make property insurance even more expensive in the future, Rossmoor takes steps within its control to decrease risk

By Sam Richards

Staff writer

Wednesday, February 12 (9:30 a.m.): Rossmoor will pay about $6 million less in premiums for its master property insurance policy in 2025 than expected, but the premiums for 2026 and beyond are uncertain, especially given the estimated $100 billion payout in claims stemming from the recent wildfires in the Los Angeles area, which are stretching insurance companies to the limit.

But Rossmoor has taken several steps to make itself as “insurable” as possible – including improving resiliency to fires and adhering to safety rules – and to save money, as well, a representative of Rossmoor’s insurance broker told the GRF Board on Jan. 30.

“Rossmoor has done some very creative things,” Ken Johnson, a vice president with A.J. Gallagher and Co., Rossmoor’s insurance broker, told the Board.

GRF’s 2025 master property policy premium will be about $19.23 million, down from the $21.66 million paid in 2024 for approximately the same amount of coverage, Johnson said – an 11.2% drop. The property coverage is by far the lion’s share of Rossmoor’s total insurance coverage, which also includes umbrella (to cover liability that exceeds an individual’s or other entity’s insurance policies), general liability, directors and officers liability coverage, and other coverage. The combined premiums are going down from $23.8 million in 2024 to $21.3 million for 2025, a decline of 10.2%.

A key step Rossmoor has taken to fend off premium increases, Johnson said, was to lock in a five-year premium for the first $5 million in property coverage, generally the most tapped segment of such large policies. This is called, in insurance parlance, “alternate risk transfer,” and depending on how many, or few, claims are made on the policy, Rossmoor could get up to 85% of that amount back, Johnson said.

The fact Rossmoor’s coverage is attained employing a quilt of multiple diverse insurance providers – “a fairly complex program,” Johnson called it – helps with both price and coverage.

Matheson said Rossmoor’s Mutuals compiled their individual budgets planning for an 18% to 20% insurance premium increase, and instead will see a 10.2% drop. That difference is approximately $6 million.

Also improving Rossmoor’s position regarding insurance coverage, Johnson said, have been the efforts of the Firewise Committee to promote fire safety measures that individual residents can take to make their manors safer, and general safety practices that aren’t necessarily fire-related. He said that, when he drove into Rossmoor recently, he saw a GRF employee wearing full personal protective equipment (PPE) while spraying for weeds or pests.

Even with all those positive steps, Rossmoor can’t come close to fully insuring its entire $2.77 billion in asset valuation through its master property policy. The actual total insured is $1.26 billion, which is about 45%.

That’s problematic, Matheson said, because the Federal Housing Finance Agency and its Fannie Mae and Freddie Mac arms require full insurance coverage to guarantee standard mortgage loans in Rossmoor. The good news about the lower costs, Matheson said, “does not improve our standing as to whether people can get traditional mortgages here.”

Johnson said that though there had previously been a measure of insurance market stability – which stimulates competition in the insurance industry – before the Southern California wildfires, the situation is more unstable now. That said, Johnson praised GRF managers, the Insurance Task Force and others for following through on steps within their control to improve Rossmoor’s insurance standing.

“You have done everything you can do to make Rossmoor a very attractive risk,” Johnson said.