January 22, 2024
Current California law doesn’t allow us to address climate-caused insurance crisis
Insurance isn’t fun or interesting or even easy to understand, but it is essential. And now it’s at risk.
We don’t have a robust insurance market in California. It’s quite the opposite: More than five years of destructive, climate-driven wildfires have triggered billions of dollars in claims, causing insurers to leave in droves. Those that remain are refusing to renew policies, especially in fire-prone wildland-urban interface areas.
The situation has led to diminished private-sector competition, and only expensive options remain in some communities. The state’s insurer of last resort — known as the FAIR Plan — and non-admitted carriers that are not approved by the state are simply cost-prohibitive.
The effects are far-reaching. The insurance crisis is impacting property values and the ability for homeowners to refinance or sell their homes. In short, it’s a disaster, and a ticking time bomb that threatens the broader economy. Clearly, the status quo isn’t working.