Californians are beginning to lose insurance coverage on their homes after a year of record-breaking wildfires caused billions in property damage.
Wildfires damaged or destroyed more than 21,000 homes in the North Bay area of California alone. The California Department of Insurance (CDI) has tallied more than $9 billion in damages for the month of October, and new claims are still coming in, according to a CDI report released Thursday.
Wildfires that ripped through Southern California in December destroyed thousands of homes more. The largest fire in California’s history, the Thomas Fire, started Dec. 4 and is still being contained after burning over 280,000 acres.
“These fires consumed areas that were thought to be at lower risk. Now it’s clear they’re not,” state Insurance Commissioner Dave Jones told The San Francisco Chronicle. “We’re looking at a future where there will be increasing challenges of insurance availability for some homeowners in some areas of California. The areas where this is a problem are likely to expand.”
Insurers are backing out of fire coverage by spiking premiums, refusing to renew insurance policies or canceling coverage altogether. Edge neighborhoods sitting on the outside rim of cities and bordering the wilderness are the most affected, The Chronicle reports.
Recent droughts and bark beetle infestation has resulted in more than 129 million dead trees littering California forests with dry tinder. The effects on forest fire risk and activity have been devastating, according to a press release from Cal Fire last month.
About 1 million homes in half of California’s counties have housing in high to very high fire risk areas.
Many homeowners have taken steps to protect their homes from wildfires, clearing surrounding trees and vegetation, and have never filed a claim. Insurers still do not want to risk selling them a policy, however, the CDI report says.
“Retention is always our goal, but it’s balanced with thoughtful and disciplined underwriting,” Travelers Insurance spokesman Matt Bordonaro said, referring to the process of assessing risk, according to The Chronicle. “We routinely evaluate our risk exposure and make adjustments as necessary.”
The CDI is working on possible solutions to expanding high-risk homeowners’ access to insurance, including overhauling California’s laws on insurance and developing a state database to help insurers assess risk.
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