Years of destructive wildfires are leaving millions of Californians at risk of losing their homeowner’s insurance — underscoring fears that climate change could soon make parts of the country uninhabitable for financial reasons.
That could lead to devastating effects for communities across the state.
“In California, insurers are saying ‘Sorry, we don’t insure your area anymore,’ ” said Carmen Balber, executive director of Consumer Watchdog, a California-based advocacy group.
To help guard against insurers letting policies expire through nonrenewals, California passed a bill in 2018 banning insurance companies from dropping consumers in fire zones from policies for one year after wildfires. The statute protected about 2.4 million policy holders last year, according to the California Department of Insurance.
The move was prompted by the tens of thousands of nonrenewals that followed the devastating 2018 fire season. According to a 2020 report by the California Department of Insurance, nonrenewals were up 31 percent statewide in 2019 from the previous year.
The numbers were particularly acute in ZIP codes with “moderate to very high” fire risk, at 61 percent, and 203 percent in the 10 highest-risk counties.
But critics say the state’s moratorium on dropping insurance policies is just a stopgap — “like trying to stop a tsunami with a fence,” said Yevgeny Shrago, policy counsel at the left-leaning group Public Citizen based in Washington, D.C.
If entire towns and regions begin to lose insurance, Shrago said, economic “death zones” could pop up long before climate change makes an area uninhabitable.
Most mortgages require property holders to have insurance. That means banks could decide homeowners are in default if an insurance company excludes a property from fire coverage.
This is turning into yet another instance of a dangerous CA wildfire outrunning public communication regarding necessary actions. #RiverFire is moving very fast. If you are potentially in path (particularly N or NW of fire), I would consider leaving prior to orders. #CAwx#CAfirehttps://t.co/EaX4ZmrTJKpic.twitter.com/Y4ANRFCOVj
