California wildfires are prompting some insurers to pull back on coverage

Around 1.7 million homes are considered highly prone to wildfires

Los Angeles /
Nov.November 20, 2018 02:00 PM
The Woolsey Fire, California. (Photo courtesy of Peter Buschmann)

The series of wildfires that have devastated California homeowners in recent years have prompted some insurers to pull back their coverage.

Around 1.7 million of California’s eight million houses are considered highly prone to wildfire. Insurers have raised their standards for what homes they will cover and are disqualifying homeowners over risks that previously didn’t affect coverage, according to the New York Times.

Buyers are often warned — but purchase anyway — and then get hit with insurance premium increases. That’s forcing some homeowners to turn to insurers that don’t meet state standards, a risky proposition, or to take out insurance with the state’s own insurer, the FAIR Plan. Others decide to drop their plans completely.

The more people that take out policies with the FAIR Plan, the more at risk the state is in the event of a devastating fire. As of last year, the program covered 4,269 homes at extreme risk of wildfire, up from 3,861 in 2014.

Florida set up a similar program in the wake of Hurricane Andrew which eventually held a quarter of the state’s homeowners insurance market, before criticism prompted the state to sell off most of its policies.

In the wake of the fires this year, which killed at least 80 people and destroyed 15,000 structures, experts have called for state oversight of zoning in fire-prone areas. [New York Times] – Dennis Lynch


Related Articles

arrow_forward_ios
This home was about to be sold — that a wildfire burned it down. (Getty)
Wildfire claims home “one signature away” from multi-million dollar sale
Wildfire claims home “one signature away” from multi-million dollar sale
Some high-end homes in California lose insurance coverage over risk of wildfires (iStock)
Insurers dropping high-end homes over risk of wildfires
Insurers dropping high-end homes over risk of wildfires
Environmental group drops suit over 6,700-acre Tejon Ranch project
Environmental group drops suit over 6,700-acre Tejon Ranch project
Environmental group drops suit over 6,700-acre Tejon Ranch project
Wildfire grows to 13,400 acres in Santa Barbara County, puts 100 structures at risk
Wildfire grows to 13,400 acres in Santa Barbara County, puts 100 structures at risk
Wildfire grows to 13,400 acres in Santa Barbara County, puts 100 structures at risk
Greenville, California after the Dixie Fire (Getty)
Wildfire insurance moratorium expires, allowing insurers to drop homeowners
Wildfire insurance moratorium expires, allowing insurers to drop homeowners
Greenville, California after the fire (Getty)
Dixie fire has now burned nearly 1.3K structures, 1M acres
Dixie fire has now burned nearly 1.3K structures, 1M acres
Aftermath of the fire in Greenville, California (Getty)
Dixie fire has burned more than 1,000 structures — over half were homes
Dixie fire has burned more than 1,000 structures — over half were homes
The destroyed Greenville Library (Getty)
Dixie fire is state’s 3rd largest ever and threatens 14K structures
Dixie fire is state’s 3rd largest ever and threatens 14K structures
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...