Wildfires in California have burned over one million acres so far in 2024, an area larger than Rhode Island, with devastating effects on local communities and the insurance industry.
This natural disaster trend is not limited to California; insurance companies are also pulling out of other states like Texas, Florida, Oregon, and Colorado, leaving homeowners struggling to find coverage, FOX Business reported.
Steve Archer, president of a homeowners’ association (HOA) in La Cañada Flintridge, California, told FOX Business about the dire situation in his community. Premiums have more than doubled, while coverage has been cut in half. Despite efforts to protect their area—such as installing new roofs, trimming trees, and fitting seismic shut-off valves—the community lost its two-decade-long coverage with Farmers Insurance in July.
After an extensive search, the HOA had to settle for the California Fair Plan, the state’s last-resort insurance provider for areas deemed high-risk.
This left the community with dramatically reduced coverage, down from $45 million to $20 million, while their premiums soared from $70,000 to $170,000.
Archer noted that many residents have also seen their personal home insurance costs skyrocket, with annual premiums jumping from $2,000 to as much as $8,000 for standard-sized homes.
Rick Dinger, president of Crescenta Valley Insurance, pointed out that only five of California’s top 12 insurance companies are still issuing new policies.
Dinger attributes this exodus to state regulations, which make it difficult for insurers to raise rates in a timely manner, sometimes requiring three years of approval delays, rendering the requested rates obsolete.