How are people supposed to rebuild Paradise, California, when nobody can afford home insurance?

In the wake of California’s deadliest wildfire, Paradise residents like Heidi Lange face a daunting challenge in rebuilding their lives. Lange, who rebuilt her home following the devastating 2018 Camp Fire, encountered an unexpected hurdle: a steep hike in her home insurance premium. Despite making her new home more fire-resistant, Lange was shocked to discover her annual insurance cost skyrocketing from $1,200 to a staggering $9,750.

This issue is widespread in Paradise as the town nears the five-year mark since the tragedy. Many locals are receiving insurance quotes nearing or exceeding $10,000, posing a significant obstacle to rebuilding efforts in what was once considered an affordable area.

The 2018 fire, which claimed 85 lives, raised awareness among national insurers about the escalating costs of wildfires, exacerbated by climate change. As a result, major insurers like Farmers Insurance, State Farm, and Allstate have limited or halted new policies in California.

In response, California Insurance Commissioner Ricardo Lara is working on reforms to bolster the private market, although significant changes are still a year away. Despite community efforts to mitigate wildfire risks, such as burying power lines and clearing vegetation, insurance premiums have continued to rise, leaving the state’s Insurance Department and industry groups at a loss to explain the increases.

Residents like Carl Johnsen, a longtime Paradise inhabitant, and Gene Robinson, who rebuilt in Paradise using insurance proceeds, face exorbitant insurance quotes. Many, like the Robinsons, are turning to the California Fair Access to Insurance Requirements Plan for basic fire coverage, coupled with supplemental liability insurance from other providers.

The FAIR Plan has seen a surge in applications, with over 330,000 policies written as of September, a stark increase from 2018 figures. Lara’s proposed reforms aim to encourage insurers to offer more policies in wildfire-threatened areas, contingent on climate change considerations.

While California’s home insurance premiums have risen about 35% from 2017 to 2022, they remain lower than in other high-risk states. However, this is little consolation for homeowners like Lange, who faces a difficult choice between staying in her community or seeking more affordable living elsewhere. The situation highlights the complex challenges of insurance in wildfire-prone areas and the need for sustainable solutions.

Frequently Asked Questions (FAQs) about Paradise Wildfire Insurance

More about Paradise Wildfire Insurance

• California Wildfire Insurance Challenges
• Paradise Rebuilding Efforts Post-Fire
• The Impact of the 2018 Camp Fire on Insurance
• Understanding the California FAIR Plan
• Trends in California Home Insurance Premiums Post-Wildfire