Insurance has become a severe problem in California as wildfires – both past and present – wreak havoc on the state.
After last year’s devastating wildfires, insurance companies are balking at fire coverage policy renewals for more than 350,000 residents in high-risk areas. California Insurance Commissioner Ricardo Lara said in a statement:
We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer.
(the department) has seen cases where homeowners were paying an annual premium of $800-$1,000 but, upon renewal, saw increases to as high as $2,500-$5,000,” a staggering rise of more than 300 percent in most cases.
some of these homeowners have conducted extensive and costly defensible-space and other mitigation, but these actions did not lower premiums.1
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Meanwhile, insurers are grappling to find a financially viable coverage plan as blazes become increasingly common and unpredictable.
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According to Governor Gavin Newsom’s strike force report:
Experts consulted by the strike force believe climate change, development patterns, deferred utility equipment maintenance, and other factors suggest much-heightened risk going forward.
Predicting how much risk and how consistently is more difficult, and there is also uncertainty about the level of success we can expect in reducing the frequency and severity of wildfires.1
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Last year’s Camp Fire was the deadliest and most destructive in California history. It caused more than $12 billion in insured losses, and it engulfed more than 18,000 buildings and killed more than 80 people before it was contained.
While currently, the California Department of Forestry and Fire Protection lists 12 active “incidents.”
