After the devastation caused by multiple California wildfires, many of the state’s home and business owners are reportedly having trouble obtaining property and casualty insurance.

Reluctant Insurers

According to CBS News, due to the unique threat of wildfires in California, insurers are hesitant to sell property and casualty insurance to California residents, something that may affect as many as 350,000 residents in 10 counties. Since homeowner’s insurance is required to get a mortgage in California, residents are concerned potential homebuyers will be scared away, and it will become more difficult to refinance. In 2018 alone, 10 percent of California home and business owners lost insurance coverage for their properties.

California Insurance Commissioner Ricardo Lara predicts that the situation will only get worse. “We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer,” he said earlier this year. Even residents who are able to find an insurer willing to cover them may face difficulties. According to the CBS News report, a California resident who lives in an area vulnerable to wildfires said his annual homeowner’s insurance premium went from $1,200 to $4,000. Some estimates regarding the future of California insurance premiums predict premiums will triple or quadruple.

California’s FAIR Insurance Plan

According to The Balance, property owners who are unable to obtain insurance due to the threat of California wildfires may be able to receive insurance under California’s FAIR insurance plan. However, this insurance is generally much more expensive and offers coverage for fewer types of damage. But for residents in the 10 counties rated as “high risk” for wildfires, this insurance may be all they can get. Between 2015 and 2018, the number of homeowners in these counties who purchased insurance under the FAIR plan rose by 177 percent. Although this plan is meant to be used as a last resort, many Californians may soon find themselves with no other choice, according to thebalance.com.

Background on California Wildfires

In 2017 and 2018, California suffered devastation from several wildfires, including the Thomas Fire in December 2017 and the Woolsey and Camp Fires in November 2018. Together, these fires burned across more than 532,000 acres, destroying 21,000 structures and causing more than $24 billion in damage.  Drought, combined with faulty electrical equipment and dry vegetation, led to a perfect environment for sparks or small fires to become scorching wildfires. Due to the dry conditions expected to continue in California, the risk of more wildfires is high.

Those affected by California wildfires may be able to file class action lawsuits against the utility companies responsible for the fires. Hiring an attorney and pursuing litigation may allow you to collect compensation for property damage, damage to landscaping and vegetation, as well as other costs associated with the wildfores’ impact.
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This article is not legal advice. It is presented
for informational purposes only.