Californians risk losing insurance, face steep premium increase as wildfires worsen

A wildfire in California burned a record 1 million acres this year.

As wildfires rage across the state, Californians face an increased risk of losing homeowners insurance or a surge in premiums.

California insurance crisis

A former firefighter, Maria Goldman and her husband, quietly nestled in an oak forest near Highway 41, call the 5.3-acre site in Atascadero their eternal home.

“It would be very difficult for me to fit something like this somewhere else,” Goldman said.

Living in the countryside of Atascadero carries risks that Goldman is familiar with. A 1994 highway 41 fire destroyed some of their property. Maria remembers it as it did yesterday. “It just exploded!”

They are one of the hundreds of thousands of Californians dropped by insurance companies. Since the 1980s, wildfires in the west have become larger, longer, and more frequent, so insurance policies have not been renewed. They have been dropped 3 times. “Your heart sinks and you feel, well, you can’t even insure the house where I worked hard.”

In 2019 alone, insurers refused to renew more than 235,250 insurance policies. According to the latest report from the California Department of Insurance, non-renewals increased by 31% between 2018 and 2019.

Premiums also skyrocketed after insurance losses hit record highs following the 2017-2018 wildfires.


United Policyholders or UP (insurance organization) Amy Bach points out technologies for creating climate change, catastrophic wildfires, and insurance crises. “Some people make more than $ 8,000 and more than $ 12,000 just to insure their homes.”

Homeowners who are not in fire-prone areas are also feeling the heat.

“The number of models, tools, and AI algorithms that influence how insurers choose what they want, what they don’t want, and who they charge for is exploding … these tools are too many people. Are placed in a rejected column or a column that is too risky. “

Mark Sektnan of the American Property Casualty Insurance Association argues that technology helps insurers better understand risk. “Insurers may pay more than $ 4 for every $ 1 they receive … That means they don’t want to fall into a situation where they aren’t charging enough for the people at highest risk. Because there is a possibility. “We are subsidized by low-risk people.”

Fire protection

There is one option that is being considered to ease the burden of premium price increases.

“UP is committed to not only offering discounts to all insurers, but also agreeing to retain customers who take steps to mitigate the risk of wildfires,” Bach said. ..

Currently, only eight insurance companies are offering premium discounts to consumers living in the community who are strengthening their homes from wildfires or making mitigation efforts. These companies make up about 13% of the state’s housing market. Mercury Insurance Group, USAA Group, Fallslake Fire and Non-life Insurance Company, American Modern Home Insurance Company, ASI Select Insurance Company, Cincinnati Insurance Company, Wawanesa Comprehensive Insurance Company, and Occidental Fire North Carolina & Casualty Company.

Sektnan emphasized the importance of community-wide fire mitigation efforts. “Wildfires are heavily dependent on the community as a whole, because if you get a house that suddenly starts to spark in your neighborhood because it hasn’t been mitigated, it essentially denies personal action.”

Goldman took fire mitigation seriously and even got his own fire hydrant. “I got my first tank after 41 Fire. Last week I got a second tank of 3,500 gallons.”


They made their driveways accessible to fire trucks and provided a turnaround area. The location where the vineyards and greenhouses were destroyed by the fire on Route 41 is clearly preserved. “It’s another place for staging fire trucks.”

These additional steps will help Goldman sleep better at night. “When it comes to fires, you need to know what you have at your disposal. We now know that insurance shouldn’t be underestimated.”

If you are dropped by your insurance company-experts say you shop around. If you can’t get coverage, there is a last resort. The California Fair Plan provides some compensation. For more information

Californians risk losing insurance, face steep premium increase as wildfires worsen Source link Californians risk losing insurance, face steep premium increase as wildfires worsen

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