{"id":328934,"date":"2021-09-28T13:08:46","date_gmt":"2021-09-28T13:08:46","guid":{"rendered":"http:\/\/radiofree.asia\/?guid=599b41f632e339c71efe809f48b49f4c"},"modified":"2021-09-28T13:08:46","modified_gmt":"2021-09-28T13:08:46","slug":"in-an-era-of-record-wildfires-insurers-have-made-fire-coverage-unaffordable","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2021\/09\/28\/in-an-era-of-record-wildfires-insurers-have-made-fire-coverage-unaffordable\/","title":{"rendered":"In an Era of Record Wildfires, Insurers Have Made Fire Coverage Unaffordable"},"content":{"rendered":"\"A<\/a>

Last week, California\u2019s insurance commissioner, Ricardo Lara<\/a>, announced that the state would stop insurance companies from dropping customers\u2019 fire coverage in areas hit by 2021’s big wildfire infernos for one year. It builds on a regulatory change the commissioner pushed earlier this year to allow consumers to see their fire insurance \u201crisk scores,\u201d<\/a> assigned them by insurers, and to force insurers to improve the scores of homeowners who undertake fire mitigation strategies on their properties.<\/p>\n

The moratorium will give roughly 325,000 homeowners, spread across fire-hit regions of 22 counties, a temporary reprieve from what has become an annual nightmare in much of California: finding insurers willing to cover property in parts of the state increasingly vulnerable to fires as the region becomes a global epicenter of climate change impacts.<\/p>\n

But the moratorium alone, and the risk score regulations, while providing breathing space, won\u2019t fix a near-broken insurance system that is increasingly unable to financially navigate the climate change world of more frequent and more intense fires, floods, droughts and hurricanes. Throughout California — and indeed much of the American west — homeowners are struggling not only to find companies willing to insure them against fire, but to find companies who will do so at an affordable rate.<\/p>\n

In October 2020, the office of California\u2019s insurance regulator estimated that in 2019, upwards of 235,000 homeowners lost their fire insurance coverage<\/a> after their insurers refused to renew their policies. That was a more than 30 percent increase<\/a> on nonrenewals for homeowners compared to the previous year, although in 2018, the combined number of homeowners and businesses in the state who lost their fire insurance totaled roughly 350,000<\/a>.<\/p>\n

The numbers haven\u2019t yet been released for 2020, but given that more than 4 million acres of Californian land burned during that year\u2019s apocalyptic fires, and given that insurers have lost tens of billions of dollars as a result of California\u2019s epic fires in recent years, it\u2019s likely the pattern of nonrenewals has intensified. Up and down the Sierra Nevada and the range\u2019s western foothills, entire communities either became involuntarily uninsured or faced staggering premium cost increases. And many businesses, especially in wine country, also found themselves shunned by insurance companies<\/a> no longer willing to work in areas that are so at risk of destruction.<\/p>\n

Locked out of the private insurance market, a growing number of Californians are having to fall back on the state-run FAIR Plan insurance pool, a last-ditch fire insurance option that costs a lot and comes with high deductibles, but is at least a little bit better than nothing. The Sacramento Bee<\/em><\/a> has reported that hundreds of thousands of Californians now use this plan, which can cost homeowners many thousands of dollars a year to participate in — and which doesn\u2019t cover any non-fire-related issues, meaning customers then also have to purchase separate home insurance policies from individual companies. Seventy-five thousand homeowners were pushed onto the FAIR Plan in 2019 alone.<\/p>\n