California wildfires are prompting some insurers to pull back on coverage

Around 1.7 million homes are considered highly prone to wildfires

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

Monica Rodriguez orchestrated the nixing of a residential project set for the Verdugo Hills Golf Course (Credit: Google Maps, Wikipedia)

The threat of fire doomed this Tujunga resi project. Now the developer will sue

Real estate agents are burning up about rising home insurance costs

LA’s growing wildfire problem is spiking insurance rates, damaging the luxury market

PG&E CEO William Johnson and a Camp Fire victim looking over his destroyed home (credit: U.S. Air Force)

Wildfire fallout: Thousands of property owners may miss chance for PG&E compensation

Paradise Mayor Jody Jones, PG&E CEO William Johnson, and a home burned in Paradise in the Camp Fire

PG&E will pay up for damage from deadly and destructive Camp Fire

California Governor Gavin Newsom and a home burned in Malibu following the Woolsey Fire

After devastating wildfires, could restrictions on homebuilding be in LA’s future?

Malibu Real Estate Investments principals Bedros Oruncakiel and Kirkor Suri

Malibu spec mansion lists amid softening luxury market

Chandler Parsons and his property on Stone Canyon Road (Credit: Getty Images)

Durant wants out of Malibu, and now Chandler Parsons is listing his Bel Air mansion

CoreLogic's Andrew LePage and Orange County (Credit: Wikipedia)

SoCal housing market shows signs of life, with a caveat: report