Why Wildfires Are Becoming an Insurance Nightmare | WSJ

– I’d like to stay
here, I love this place. To be forced out because
I can’t be insured is not a happy prospect at all. – [Narrator] Wildfires
are changing California. Last year alone, almost
two million acres burned. California wildfires
cost insurance companies more than $24 billion
over the past two years with the worst of the damage linked to PG&E’s electrical network, and now, homeowners are paying the price. Insurers are hiking up their premiums or, in many cases, not
renewing customers altogether. That’s leaving homeowners
with little choice but to pay triple or
more their expected costs for replacement policies, and in some areas with no options at all, many homeowners are making the choice to simply not have
insurance, and, instead, are grappling with whether
they can stay in their homes and live with the risk of wildfires. Christy Hubbard and her husband moved to Grass Valley in 2017. They bought a home, expecting to live in a
comfortable community. Then, they got bad news. – About six weeks ago, we got the notice that said our insurance
was gonna be dropped, and that was quite the eye-opener for us. There was no choice, it
was simply, you know, we’re dropping your insurance, and so, just literally, just
about a week and a half ago, we finally got new quotes or got quotes, one of which was at 10,000,
the other was at $13,000, which was, holy cow! – [Narrator] Hubbard is not alone. Since 2015, insurers refused to renew almost 350,000 homeowners living in high-risk fire
areas in California. Kimberly Martinez is an
insurance broker in Grass Valley who’s had first-hand experience with the drastic industry changes. She says the Camp Fire that
destroyed Paradise last year, just an hour from Grass Valley, changed the way insurers
view wildfire risk. – Now, there’s a lot of just judging it based on the ZIP Code, and it’s a blanket, we’re just not doing that ZIP Code anymore because we can’t make up
for the level of risk. We’re getting close to 80, 90% of people looking for a new policy. – [Narrator] Of course, this
isn’t a totally new phenomenon. Insuring areas prone to natural disasters has always been complicated. Florida’s insurance market
nearly collapsed in 2006 after some of the costliest
storms in U.S. history. Today, many of the big
national home insurers have fled the state. It’s not hard to see why insurers
are nervous in California. Last year, small carrier
Merced Property & Casualty went out of business
under the weight of claims from the Paradise Fire. While a number of factors contribute to California’s fire risk, one constant is PG&E. The utility’s equipment has
started at least 1500 fires, averaging more than one
a day in recent years. PG&E, which filed for bankruptcy
protection in January, recently took the unprecedented step of shutting off power to more than 750,000 homes and businesses because
of the wildfire risk. – PG&E started shutting
off the power last night in more than half of
California’s 58 counties because of what the company calls an unprecedented wildfire danger. – Well, this is day two
of our power outage. This is our generator, and, basically, we come in, we have to
turn the fuel valve on. We start it up.
(generator humming) At this point now, our
kitchen, our family room, and our well will have power. – [Narrator] The power stayed off for more than two full days, but PG&E defended its decision. When inspecting their
lines that were turned off, they said they found more
than 100 confirmed cases of wind-related damage, and
that this type of damage could have sparked a fire. For homeowners who, through all this, still need insurance,
they have a few options. They can go with a surplus company, like a Lloyd’s of London insurer or they can use the California FAIR Plan, an option known as the
insurer of last resort, but that plan covers less and costs more than a traditional policy. In either case, annual
premiums would likely go from around $1000 to over 3000, and for homeowners paying mortgages, banks and lenders require insurance. – It’s got this ripple effect down through real estate and new purchases and people now leaving town, and you can’t get a rental because nobody wants to insure the rental, so yeah, I would definitely say it’s a crisis level in this community. – [Narrator] Homeowners like Hubbard are frustrated that insurers
aren’t taking into account all of the fire prevention improvement she’s done on her house. – What we are trying to do, of course, is manage the defensible space. Near to the house, you
know, you’re really keeping your vegetation to an absolute minimum and the other thing you’re doing is what they call limbing up, which is, you can see here. The very bottom of this tree, we’re cleared all the limbs. – [Narrator] This is similar to the work that PG&E is attempting around the state. A spokesperson said the
company has been meeting and exceeding new state vegetation and fire safety standards
among other measures. – It has nothing to do with
the work that we’ve done. It’s not specific to my
property, it’s my ZIP Code or, you know, the fire zone that we’re in. Yeah, that’s a little frustrating, right? It’s just sort of like your
best efforts aren’t good enough. It’s tough beans, you know? You’re canceled because
we can’t take the risk. – [Narrator] Hubbard’s
former insurance company, Spinnaker, declined to comment. – Now we have a new reality
that we have to deal with, with higher fire risk, with higher costs. If it becomes so extraordinarily
expensive to live up here, how many people will move out? And that very infrastructure and community that I hoped to join and
make part of my life, will it have to dissipate? It’s only really a question of time. (dramatic orchestral music)


Wait, they can insure a house like that in a high-risk area for only $3000/year and they are complaining? I had my insurance go up $2000/year on a $100,000 house because the roof was 7 years old.

Insurance companies not willing to take the statistical risk should raise a red flag in your head about where you live, and not be concerned about people moving out. I'm all for people wanting to live in high risk areas, this is the land of the free, but when an insurance company doesn't even want your money, that risk is on you. I feel bad for people who purchased or inherited a house before flood maps were around, now with this information available, people live in flood zones subsidized by the National Flood Insurance Program.

Wildfires are a natural part of the ecosystem, when you build within that then you put yourself at incredible risk.

If there was actually some density of housing, instead of cities spreading over 50 miles away across everywhere, this problem wouldn't be nearly as severe.


People I got news for you insurance company's are not in the business to lose money. Hint what are you doing to reduce risk. Hint I don't live in a flood plane high fire risk zone . My only risk is a tornado or small home fire. I have sprinkler systems

4:28 "prevention". She's obviously never been within 500 feet of a raging wildfire. cover the house with brick and add aluminium roofing, then remove all of the trees within 500 feet. At that point it's fire resistant… from the outside.

Guess no one did their homework and researched where wildfires were common in CA. Wildfires are not a new thing to CA, they were much much worse in 1940 than we have seen up to 2019. Than again the earths global temperature and co2 levels were way higher than today’s numbers. huge flaw for climate change theory The only difference now is people have houses where the wildfires used to happen.

I used to work for in the actuarial department of an insurance company back in the 1970s. When insurance companies have to pay out millions of dollars in claims, the cost is spread out over the whole of their customer base, not just in the area where catastrophic claims are made, so it's not just in California where the rates are going up. They're going up all across the country. I live in TN and my house insurance has gone up about a third of what it was a few years ago.

At the end, when he said annual premiums were rising from 1k to 3k I thought that's not so bad. If they can't afford an additional 2k a year they should move to a suburban development.

The forest needs to renew, by burning off old, and grow new green – that's as reality as gravity exists. Forests have been burning before humans even existed, plants have been burning before animals even existed – power line or no power line, California or Australia. But some humans insist on living in the forest, and demand the forest to change to fit human fantasy – good luck with that. That's like believing: "gravity doesn't apply to me". These folks believe "the world should revolve around me, the forest should please me, other humans should make me happy." and they demand the rest of human society to pay for their unrealistic fantasy. This video should be re-titled as: "Why insisting reality to comply with your fantasy Will Turn Your Life Into a Nightmare!"

On the one hand, it sucks for the homeowners. How can they even sell their homes when they're uninsurable? On the other hand, you can't blame insurance companies for just not wanting the risk.

Id pay private fire fighters $3000 a day in the event of fire, instead of $10, 000 a year premiums to insurance companies

Insurance is based on the law of large numbers. You premium increasing three fold is still way cheaper than having cash set aside to replace your entire home in the event of total loss.

Insurance has reaped the benefits of blanket algorithms for decades. To drop anyone's coverage is just sad. And power lines above ground justifies constant maintenance , bury the lines !

She’s a liberal that cares about the environment yet is a fat cow who eats to much destroying the environment with her excessive food consumption! Liberal hypocrisy at its finest

Insurance is a collection process to make sure big banks mortgage is covered. The homeowner's loss, is collateral damage.

….. capitalism FAILS HUMANITY … socialism BAILS OUT capitalism… CAPITALISM takes the credit.. demonizes socialists….. rinse repeat

Why people keep building in wildfire areas? Reminds me of when Carlin asked why people build their homes by an active volcano and then wonder why they have lava in their living room.

This story has nothing to do with insurance! That's a distraction. The Jesuits using their proxy Masonic governments are herding people into Southern California urban enclaves using drone mounted D.E.W. technology to start fires from the air. These fires are deliberate. Nothing to do with electrical infrastructure. That's a LIE. They're using "cause and effect" to empty whole parts of the country. Jesuit strategy= cause fires= increase insurance premiums= make life expensive= make people leave= the end of gov services= the end of gov services and businesses= empty land! The Jesuit Vatican Shadow World government controls the US and is waging war against the American people. They are using this technology around the world against many peoples. Also, right now in Australia. All these fires are deliberately lit. Learn more at: darknessisfalling.com or You Tube channel: The Jesuit Vatican Shadow Empire – Darkness Is Falling

You know it nice to have a house in the woods…but if you know you are in a wildfire prone area…NO WAY would I have a tree within falling distance of my home.
Me personally I would cut all vegetation/tress back where the closest one to my home is more than 100 yards away. Install a sprinkler system with 2 settings water the yard and fight a fire

My insurance company Farmer's into Foremost said that all the insurances went up in price all over the Country. I live in New Mexico. I live in a nice mobile home. My first few years I paid about $300 a YEAR Now I have to pay over a THOUSAND DOLLARS a year. What gives??? Lilly

I'm trying to understand why this couple needed to own a big house in the mountains. Y'all keep knockin' city life. Not all city living is filled with gun violence and crime. For what this couple is about to pay in homeowners insurance they could've bought a condo in a nice high-rise apartment building with great amenities: 24 concierge, garage parking, rooftop pool, dog park, resident events (she kept talking about being part of a community), and a grocery store on the ground level of the building. Now they are stuck with a house that can never be sold for its value plus hefty homeowner's ins. smh – – IDK why y'all keep buying into this antiquated notion that the American Dream MUST contain a house on a plot of land in some sleepy county where everybody knows your name and business.

is CA going to put its own money into rebuilding or are they still going to use that for sanctuary cities and liberal propaganda while the rest of us responsible states fork over to clean up their mess as usual?

On the one hand I sympathize with the people who cannot get insured, on the other I understand why the insurers don't want to insure homes in high risk areas.

Fire and flood insurance markets are unsustainable . . . the fire clearing done by the one homeowner isn't sufficient anyway . . .

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