California homeowners may continue to lose insurance as the threat of wildfires approaches [Bay Area News Group]

California homeowners may continue to lose insurance as the threat of wildfires approaches [Bay Area News Group]

About a year to the day after they moved in during the destruction CZU Lightning Complex fire in August 2020, Judy Osborne they learned that their home insurance company had been dropped.

His two-room house at Santa Cruz Mountains it became too dangerous to carry out, the service provider explained, and Osborn was left to search for a new plan in the middle of the fire season.

“It was like adding insult to injury,” Osborn said. “It brought back a lot of memories and a lot of fear.”

Following a series of devastating and deadly fires in 2017 and 2018, insurance companies have canceled coverage for thousands. California Homeowners as providers have moved away from areas with high fire risk – forcing many homeowners to purchase policies through the expensive California FAIR Plan, the state’s last insurance.

Now, heading into what could be the worst of this year’s fire season, many homeowners may soon be at risk of losing their policies.

“It’s that time of year, and we’re going to be back,” said Osborn, who finally found new security for the home he’s lived in since 1985.

To address the growing uncertainty in the insurance market, the government has introduced new fire laws in recent years to lower costs and protect homeowners. But insurance companies have pushed back against the change, saying the government needs to change the way it regulates rates for high-risk fires.

“The risks are increasing, and rates are going to have to go up to keep insurers solvent and operating in California,” he said. Sarah TaylorThe attorney general is Personal Insurance Federation of Californiathe company’s business unit.

In 2018, former Gov. Jerry Brown signed a law prohibiting insurance companies from canceling or refusing to renew policies of homeowners in areas affected by wildfires until twelve months after the fire. In 2019, the California Insurance Commissioner Ricardo Lara directed the FAIR Plan to expand its coverage beyond fire to include liability, theft and other aspects of homeowner’s law. Insurance companies, which administer and fund the federally funded FAIR Plan, challenged the law in court.

And later this year, the state’s insurance department is expected to begin requiring providers to offer lower rates to homeowners who burn their homes.

While consumer advocates have welcomed the new rules, some in the insurance industry worry that they could lead to providers reducing their presence in the state.

“If (Commissioner Lara) goes too far, and he has several times already, the insurance companies will just say, ‘We’re leaving.’ California – we will no longer prescribe the drug,’” he said Mad Cassidybroker is Cassidy Insurance Agency in Scotts Valley nearby Santa Cruz.

Earlier this year, the top home insurance policies American International Group Inc. and The opinion of the company Chubb Ltd. greatly reduced coverage California following recent fire seasons. And this summer, Geico closed all of its brick-and-mortar stores in the state, though company officials said they would continue to offer orders online.

Department of Insurance spokesperson Michael Soler He said the agency is working with the companies to understand their concerns and argued the new proposal could push more insurers in the state.

“We have a strong insurance market across the country, even with the wildfires we’ve seen in the last few years,” Soller said.

In 2020, insurers completed reimbursements for more than 212,000 properties California, according to the latest government data. More than 77,000 homeowners could not get private insurance that year and signed up for the FAIR Plan. This was a slight increase from 2019, but more than triple the number of new FAIR Plan policies in 2018.

To solve the problem, insurance companies say they should be allowed to set premiums based on the risk of wildfires caused by weather problems. These companies want to use computer models to predict future fire risk and improve regulatory processes. That could increase premiums, but it could also help insurers write policies for high-risk properties and drop fewer homeowners, insurance companies say.

“We’re fighting laws that say we can look back and we can’t look forward,” Taylor said. Personal Insurance Federation. “That’s what’s missing from the conversation to increase availability.”

The state insurance department – which under a 1988 voter-approved law called Prop. 103 should sign a change in the policies of the insurance companies – currently it requires insurers to determine prices based on past damage. Providers have been able to raise prices in recent years, but argue that it is not enough to protect their risk.

State insurance officials and consumer advocates say changing the policy and allowing the so-called “catastrophe model” could raise homeowners’ rates unfairly and unfairly.

“Insurance companies have been saying ‘we have to use algorithms to set insurance rates,'” he said. Harvey Rosenfield, founder of Consumer Watchdog. “But under Prop. 103, they have to use the history, which is definitive.”

With no resolution seemingly imminent, this could mean lost policies and higher costs for years to come.

Sean Murawsky he had to buy a FAIR Plan after his insurance stopped covering his home Boulder Creek following the CZU fire. His annual salary is now close $3,000almost three times what he was paying before.

Despite the high cost and the risk of wildfires growing, he has no plans to move his family out of the area.

“I’m not afraid,” he said. “I know there’s a lot of risk, but there’s a lot of risk in many parts of California.”

©2022 MediaNews Group, Inc. Visit mercurynews.com. Published by Tribune Content Agency, LLC.