April 24, 2024 The Best Source of News, Culture, Lifestyle for Culver City, Mar Vista, Del Rey, Palms and West Los Angeles

Climate Change Behind Coming Fire Insurance Crisis

By Tom Elias

 Climate change, if you ask most state experts, has already created a wildfire crisis in California. In the process, it’s causing a fire insurance predicament.

“All hell is breaking loose,” was Gov. Jerry Brown’s sum-up on national television of the effects climate change and its wildly variable and unpredictable weather patterns have had in fire-ravaged parts of the state.

Anyone who tuned into broadcast press conferences by top-level firefighters during the blazes of both September and December also heard them bemoaning the changes global warming has brought to their jobs. As Brown noted, with only slight exaggeration, “The fire season used to be a couple of months in the summer; now we’re in December.”

Before 2017, California sometimes saw major wildfires as late as early- to mid-November, but almost never deep into December, a time when the annual rainy season has usually been well under way. But all fall a persistent atmospheric high-pressure ridge prevented rain clouds from moving into much of the state.

One result was fires that lasted weeks, feeding off vegetation that mushroomed after last year’s unusually wet winter and then dried out almost completely, leaving huge amounts of fuel for fires.

Most of the more than 9,500 homes and other structures destroyed in this year’s far longer than usual fire season were insured, some owners paying extra-high premiums because they’re in known fire areas.

At the height of the infernos, state Insurance Commissioner Dave Jones warned the new year-round threat to homes in many parts of the state could change the entire fire insurance marketplace.

This crisis is real, but it’s not yet widespread even though some homeowners have already gotten notices of non-renewal from insurance companies. Those are likely harbingers of many more to come.

Jones noted in an interview that insurance companies can’t cancel policies during their term. They must also renew policies for homes in fire disaster areas for at least one more year after any current policy expires. But they don’t have to renew policies in non-disaster areas when they expire and they don’t have to renew homes in disaster areas more than one year beyond current policy expirations.

These rules mean there is a crisis, spurred largely by new weather conditions that have broadened areas rated as fire-prone. But this insurance availability crisis won’t look like what happened after the 1994 Northridge Earthquake, when property insurance companies refused to renew many existing policies and stopped writing new home and business insurance in the state. That impasse ended in 1996 with creation of the California Earthquake Authority and elimination of an old rule under which companies writing any property insurance also had to offer quake coverage. The state-run CEA now writes the vast majority of earthquake policies.

“It’s possible some insurers will reduce their willingness to write policies in areas at risk for fires,” Jones said. The state’s Fair Plan, roughly equivalent to the CEA in that it must insure anyone who applies, is the fallback for homeowners in places now deemed fodder for future burns. Fire insurance through the Fair Plan costs more than ordinary policies, although by law prices cannot be excessive. But rates vary according to home replacement values and fire risk.

Before last year’s blazes, the number of Fair Plan policies was rising by about 1,000 per year, Jones reported. That figure climbed in 2017 and likely will again this year. He added that homeowners should view the Fair Plan as a fallback option to be used only if no commercial insurer will cover them.

One factor pushing some insurance companies to stop writing policies might be the 1988 Proposition 103, which forbids them from packing all their costs from last year’s fires into this year’s rates. Instead, compensation for those costs must be spread over 20 years to avoid big financial shocks to homeowners.

Overall, said Jones, “insurers are using more and more sophisticated (computer) models to determine risk factors. Some of those models might cause them to back off writing insurance in some areas.”

All of which means climate change now is impacting wallets, forcing an insurance crisis in both proven and potential fire disaster areas.

Photo Courtesy of LA Times.
Related Posts

LA Police Apprehend Two Youths Linked to Westchester and Playa Del Rey Vehicle Break-Ins

April 23, 2024

April 23, 2024

Juvenile Suspects Arrested in LA Car Burglary Spree The Los Angeles Police Department’s Pacific Area auto detectives have announced the...

Los Angeles Mayor Karen Bass Reveals Budget Proposal for Upcoming Year

April 23, 2024

April 23, 2024

Mayor Bass’s Plan Prioritizes Housing, Safety, and Accountability Mayor Karen Bass unveiled her proposed budget on Monday, outlining her vision...

Supreme Court Debates Legality of Ticketing Homeless Individuals, Hears Grants Pass Case

April 22, 2024

April 22, 2024

Landmark Case Raises Questions of Cruel and Unusual Punishment The Supreme Court engaged in a lengthy debate on Monday, lasting...

Taste of the Nation Returns to Culver City: Culinary Event Devoted to Fighting Childhood Hunger

April 22, 2024

April 22, 2024

Top Chefs and Tastemakers Join Together May 4th for No Kid Hungry’s Charity Event Taste of the Nation for No...

Extremist’s Arsenal: Felon’s Hate-Fueled Weapons Cache Leads to Federal Time

April 22, 2024

April 22, 2024

Man Was Part of a Hate Group, Posted Calls for Genocide and Racist Remarks Ryan Scott Bradford, a 35-year-old man...

(Video) Ariana Madix Confirms Something About Her Will Open Soon at LA Times Festival of Books

April 22, 2024

April 22, 2024

Ariana Madix answers the questions that fans want to ask at the Festival of Books as she appears to support...

Comedian Michelle Collins Brings her Big Natural Tour to LA

April 21, 2024

April 21, 2024

She’s funny, tall, glam and finally long-legging her way across these United States… it’s the Michelle Collins stand-up comedy tour...

Former CBS CEO Admits Role in Disclosure of Confidential Police Information

April 21, 2024

April 21, 2024

Leslie Moonves Fined for Aiding Misuse of Confidential Data in LAPD Complaint Former CBS CEO Leslie Moonves has acknowledged his...

Los Angeles Police Department Reveals Identity of Victim Found in Stolen U-Haul Truck in West Adams

April 21, 2024

April 21, 2024

Body Found in Rental Vehicle Was Shot in the Head, LAPD Seeks Information Detectives from the West Bureau Homicide Division...

Outrage Erupts Over Demolition of Iconic Midcentury Craig Ellwood Home in Brentwood

April 21, 2024

April 21, 2024

Destruction of Zimmerman House Creates Internet Backlash Preservationists lamented last year when another treasure of L.A.’s midcentury modern architecture vanished,...

Make Science Your Destination This Summer

April 19, 2024

April 19, 2024

Destination Science is the fun science day camp for curious kids with over 15 STEM activities weekly, three science stations...

Prime Time Sports Camps Coming Soon

April 19, 2024

April 19, 2024

Prime Time Sports Camp has remained a constant in the everchanging camp landscape for over 30 years by following this...

Groundlings Summer Improv Classes Open April 2

April 19, 2024

April 19, 2024

A summer of improvisation is around the corner at The Groundlings.  Three months of summer class offerings for teens will...

Coming to Venice for 4/20? Visit your original cannabis locals! Specials! Live entertainment @4:20pm  Doors open at 10am!!

April 19, 2024

April 19, 2024

Coming to Venice for 4/20? Visit your original cannabis locals! Specials! Live entertainment @4:20pm Doors open at 10am!! Free goodies!!...

Venice Kush Hosts “The Real Deal” Cannabis Celebration at the Beach

April 19, 2024

April 19, 2024

A Day of Education, Innovation, and Community at Venice Beach Venice Kush is gearing up to host its much-anticipated “The...