For California homeowners, wildfire insurance is getting more expensive and becoming harder to find

Carlos Granda Image
Thursday, July 14, 2022
Wildfire insurance getting more expensive for CA homeowners
For some California property owners, the only option is the state's Fair Plan. But some say that is also too expensive and provides poor coverage.

LOS ANGELES (KABC) -- Many Southern Californians live in neighborhoods at risk of a wildfire. They may also be at risk of losing their insurance policies.

Some homeowners getting dropped by their insurers are finding out they may be forced to pay a high premium just to stay protected.

As California goes through severe fire seasons and losses add up, consumers depend on their insurance. But for some that coverage is harder to get.

Billy Dim just bought a house.

"When we went to our a longtime insurance agency they said they weren't going to be able to offer us coverage," Dim said.

"I had a client who was trying to purchase this home, and he was having a lot of difficulty getting someone to insure it," realtor Bianca Torrence said. "And when they did find somebody it was just unaffordable."

Some private insurance companies have stopped writing policies or left the state. For property owners, the only option is the Fair Plan which was established by the state. But some say that is also too expensive and provides poor coverage.

"More and more Californians are faced with potentially having to turn to the Fair Plan as the insurer of last resort to meet the insurance needs of themselves and their families," state Insurance Commissioner Ricardo Lara said.

Lara held a hearing Wednesday to discuss what needs to be done. The Fair Plan is made up of insurers in California.

Harvey Rosenfield from Consumer Watchdog is critical of these insurers.

"What's needed here is law enforcement. They have to obey the law," Rosenfield said. "The commissioner needs to use every tool at his disposal to accomplish that."

Fair Plan officials say its polices insure riskier properties and because of that the cost is higher.

"Unlike the private market the Fair Plan as a last resort insurer does not have the ability to pick and choose which properties go into the risk pool," Phil Irwin from the Fair Plan said. "The result is high risk, high concentration."