6mo ago

California to require insurers to offer policies in fire-prone areas

san.com California to require insurers to offer policies in fire-prone areas

California is implementing a new regulation requiring home insurers to offer policies in fire-prone areas if they wish to stay in the state.

47 comments

Is there anything in the law preventing the insurance company from giving a customer a "go away" premium level? As in "Okay, you're forcing us to offer a policy in a place we feel we're going to lose money? $1m/month ought to cover it, you sure you want us to insure you, Mr. Homeowner?"
- Is there anything in the law preventing
  Insurance companies now have a legal quota, ie a certain percentage of their policies must be in fire-prone areas.
  So if their premium is so high that nobody in those areas buys a policy, then they won't meet their quota.
  
  Soo, the government is making everyone else subsidise living in fireprone areas? Shouldn't we encourage people to live in cities instead?
- They recently closed down my local fire dept then jacked my rates up for not being close to a fire dept. I’m not in a fire risk area, but now I’m 30 mins away from a firetruck.
  I don’t want to live in the city.
  
  You make it sound like the same people did both things...
  
  Would you and your neighbors be willing to fund a fire district? If yes, get in touch with your local representatives to make it happen.
- There are some restrictions on price increases but they are allowed to and have been making all sorts of nonsensical demands of homeowners with the threat of cancellation as a way to get out of policies in certain areas.

This seems like a very bad idea... You didn't want people living in high risk areas. And you're going to make others subsidize it.
- Problem is, everywhere will become high risk eventually. If not fire, then flood.
- I live in a 'high risk area' e.g. not a paved hellscape. We are a fire safe community.
  https://cafiresafecouncil.org/resources/map-of-fire-safe-councils/
  My father built the house in 1981. Everyone in the community has been paying insurance premiums for 40 fucking years and because PG&E didn't do necessary maintenance on their lines in paradise, the insurance companies have been pulling out.
  
  Nice thing about "paved hellscapes" is they don't tend to have runaway fires that cost millions to deal with.
  High premiums is the price you pay for high risk. It applies market pressure against such activities while allowing those who really want the risk to continue doing it, at a cost. I only hope California doesn't step in to subsidize things like they tend to do...
  What would likely be more cost effective long-term is to offer a fair market value buy-out of high-risk homes so you can relocate to someplace less "tinderboxy".
- It just means insurers will pull out of California altogether.
  
  They already have. This is a reworking of our current rules. It’s basically goes like this: In California insurance must now provide some insurance in fire prone areas. In exchange California will allow them to use computer models to identify high risk customers and charge them differently. As well, California is promising to reworking our insurance coverage system for insurers. Basically saying in the event of a bad natural disaster California will help provide financial aid.
  Lastly the system is encouraging companies to come back by giving in to some of the insurance companies demands. While it sucks, people like me (and there’s a heavy majority of Californians like me) will get lower rates because we live in cities with low wildfire and low flood potential. People in the mountains and along the coast and rural areas will be fucked, but they also wanted relaxed regulation like this.
  It’s also substantially better than lots of southern states like Florida which has basically no insurance companies left and those that stay have people paying 12 grand a year for coverage. If I’m recalling correctly the average Californian pays like $1200. We’re far better off, so hopefully this helps a bit and doesn’t completely screw us. ¯(ツ)_/¯

Maybe the state of California should offer insurance itself if it's so bad.
But really, between climate change creating tinderboxes and PG&E creating sparks, fire is inevitable.
- PG&E shouldn’t exist at this point. It’s ridiculous that they weren’t either broken up or taken over by the state.
  
  Neither should for profit SFH insurance companies. The idea is just fucking insane.
- Colorado actually started doing that for the same reason. They also capped the maximum home value so those building McMansions in fire-prone areas aren't compensated by the program. The program is also self-funding and can't tap into tax dollars.
- They do. A friend in a fire prone area is unable to get fire coverage through his former provider. He was trying to find an alternative last time we spoke, but the estimate from the state was $500/mo. Just for fire insurance.

Or how about the state helps relocate people in reoccurring disaster prone areas instead of acting like it's going to stop if we all just wish hard enough.