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    Rolling Hills Estates Landslide & Guide to Homeowners Insurance

    July 21, 2023

    By: Richard Haynes

    The South Bay real estate market made national news due to the landslide that occurred on the Palos Verdes Peninsula in Rolling Hills Estates. There were close to a dozen homes red-tagged off Peartree Lane that slid into the adjacent canyon. Our hearts go out to these homeowners after such an unfortunate and devastating event.

    Due to the publicity this story is receiving–the L.A. Times to the New York Times, among others–we have received numerous messages from clients and followers regarding insurance and the risk of further landslides on the Palos Verdes Peninsula.

    The old adage to an event like this is: “At least they have insurance.”

    This saying, unfortunately, does not hold truth as typical homeowner’s insurance policy will not cover an event like this. It is imperative that you educate yourself on insurance and preventative measures in Palos Verdes, the South Bay and beyond.

    Insurance is a complex topic that could not possibly fit into one blog post. This week I want to cover requested topics from clients and followers:

    • History of Palos Verdes landslides
    • Summary of homeowners insurance
    • Additional coverage to consider
    • Due diligence & Prevention for current owners & prospective buyers


    History of Palos Verdes Landslides

    I am not a full-time historian or even a geological expert that tracks landslide events.

    That said, my mom moved to the Palos Verdes Peninsula in second grade from Ohio and I have heard a lot of stories over the years as a kid born and raised on the Peninsula.

    In my opinion, there are five “famous” landslides that have really affected life and property in the last century:

    1. The 1956 Portuguese Bend Landslide.
    2. The 1980s Flying Triangle Landslide.
    3. The 1983 Bluff Cove Landslide.
    4. The 1999 Ocean Trails 18th-hole Landslide (now Trump National).
    5. And finally, this 2023 Peartree Lane Landslide.

    If you have read recent articles, the Palos Verdes Peninsula and surrounding area is part of an ancient landslide that has always moved or has been reactivated over the years due to various human interaction or weather-related events.

    The Portuguese Bend landslide in 1956 is easily the most significant as it almost destroyed the entire private beach community. Residents lost 140 homes, the clubhouse, and a pier. It is generally accepted that the Crenshaw Blvd extension and water-related issues contributed to the slide.

    The Flying Triangle landslide affected a large section of homes “Behind the Gates” in Rolling Hills and remains an issue today with building restrictions that prospective buyers and current homeowners need to monitor.

    Bluff Cove’s landslide is the iconic drive around this local surf spot that I remember construction and demolition on Palos Verdes’ Drive back in the 1990s to shore up the blufftop for traffic and remove the affected red-tagged homes.

    And then, of course, the 1999 landslide event that saw the newly opened Ocean Trails golf course see its 18th hole collapse into the Pacific. Again, due to water and drainage issues. It was subsequently purchased by Donald Trump and redesigned into Trump National Golf Course.

    Lastly, this Peartree Lane slide that is still new but well publicized.

    Except for Bluff Cove on the west side of the Peninsula, the others are focused on the southern side of The Hill.


    Summary of Homeowner’s Insurance

    Most standard insurance policies cover the bare minimum. Items normally included are damage from:

    • Fires, smoke, or lightning.
    • Wind, hail or blown over trees from storms.
    • Theft and vandalism.
    • Accidental water leak issues from pipes, appliances or damaged roof.
    • Vehicle or airplane crashes into your home.

    Many homeowners believe it covers EVERYTHING and that is far from the truth. Let’s talk about other items that can cause major or catastrophic damage to your property that is generally not covered:

    • Termite & pest infestation.
    • Certain dog breeds.
    • Earthquakes.
    • Flooding or hurricanes.
    • Government action or war.
    • And yes, landslides.

    If you are worried about a specific item, you should speak to an insurance specialist as all policies are different and unique.

    And if you want insurance, you need to solicit estimates for specialized coverage and work to find a company that will extend an insurance offer.


    Additional Coverage to Consider

    What many homeowners are unaware of are some of the nuances of homeowner’s insurance policies. Below are items you should consider:

    • Ordinance & Law coverage
    • Loss of Use coverages
    • An Umbrella policy (depending on your personal situation)

    One HUGE nuance that does not get enough attention is that most policies are cash value policies which means they factor in depreciation on your home.

    Let’s say your house burns down in a fire and you replaced your roof 20 years ago that has a life of 40 years. The insurance company will only help pay for half of that.

    Furthermore, like many homes in the South Bay, you might have a home that was originally built in the 1950s or 1960s. If you’re building brand new, your insurance company will not cover the new codes and expenses. California now requires solar on every new home–that is not covered. California now requires all sorts of Title 24 items for efficient homes–also not covered, among a myriad of other items where homeowners are left holding the bag.

    Ordinance & Law coverage is a minor additional upcharge to get coverage up to today’s codes. It is a no brainer in my mind here in the South Bay.

    Loss of Use coverage pays for your housing while your home cannot be occupied. It can be a huge expense to pay for your mortgage on a home being rebuilt AND pay for a rental for years during construction. The loss of use addition can be a wise choice in as worst-case scenario insurance.

    And finally, an umbrella policy to go beyond your homeowner’s limit is smart. This is something you should not only speak to your insurance agent but a financial adviser considering your net worth, current coverage, and liability.

    If you are worried about earthquakes, landslides, or flooding, then you need to seek additional coverage.

    The problem is that many of these policies are insanely expensive (cost prohibitive) and if you live in a high-risk area (like an active earthquake fault line), then sometimes it is impossible to find coverage.

    Do your homework on policies. It is a cost/benefit analysis and requires some soul-searching on your risk tolerance.


    Due Diligence & Prevention

    Bringing it back to the landslide in Rolling Hills Estates and what you can do.

    As far as insurance goes, it is going to be hard–not only to find an insurer but to obtain a policy that is somewhat affordable.

    So, what can you do against a possible landslide? My answer–due diligence and prevention.

    Let’s start with due diligence.

    Any client looking to purchase a home in a landslide area (Flying Triangle, etc.) or in an area in poorly compacted fill locations (certain areas of the Silver Spur submarket, for example), then I always recommend clients consult with a geotechnical (soils) engineer familiar with the Palos Verdes landscape.

    You should also consider a structure engineer to look for signs of issues. And yes, one with a lot of experience in the Palos Verdes area.

    The soils engineer combined with a structural engineer are going to educate you on the history of your neighborhood, the geology, and based on the year your home was built, if it can properly stand up to the demands of the terrain.

    Their insight and advice will allow you to decide if you are comfortable with the risks associated with buying a specific property, along with understanding what can and cannot be done to protect your investment.

    Now let’s talk prevention.

    If you are already a homeowner in Palos Verdes, and the Peartree Lane landslide has got you a little nervous, then it is time for due diligence…and prevention.

    Obviously, if you have not consulted with a soil expert or a structural expert, then it is time to do so. Additionally, it is likely time to implement some prevention efforts.

    In almost every case, your consultants are going to recommend improvements in the drainage.

    This can go in many different directions. I am talking about area drains to keep your property soil dry. I am talking about French drains to protect your foundation or deal with hydrostatic pressure. I am talking about sump pumps to pump water from one area of the property to the street’s storm drain system. The list goes on and on.

    You may also receive recommendations to improve your foundation with a fan system, repair or add improved footings, and potentially install expensive caissons.

    There are retaining walls and compacting dirt, etc., etc.

    And obviously, the experts could mention a plethora of items I have not even mentioned.

    Prevention measures can get expensive, but again, it is much like an insurance policy. You need to do your homework, analyze the cost/benefit, and assess your risk tolerance on how to improve your property.


    Final Thoughts / Conclusion

    Disasters unfortunately happen. The South Bay has its own unique risks from potential earthquakes, tsunamis, and yes, even landslides.

    Please understand your insurance policy inside and out. And I encourage owners to audit their policies and consider adding additional coverage if you are risk averse – I certainly have.

    And lastly, if you are in a high-risk area, please conduct responsible due diligence and listen to your experts. It may be the difference in choosing not to purchase a specific property or even saving one you currently own.

    *Please note, I am not a professional historian, insurance agent, structural or geotechnical engineer–not to mention a hydrologist or geologist. I am a Realtor specializing in the South Bay property values. The point of this post is to give you a general summary of things to consider and professionals with which to consult. You should always solicit advice from the above professionals (and others, including but limited to attorneys, etc.) to understand your specific property and personal risk tolerance.

    **Photo License details
    Creator: Robert Gauthier
    Credit: Los Angeles Times
    Copyright: 2022 Los Angeles Times 

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