Emerging Climate Crisis for Home Insurance

October 22, 2019

Sacramento Bee:

Jennifer Burt knows she lives in a fire-prone community. That’s why she’s done everything she can to fire-proof her home in Meadow Vista, in the bushy, densely wooded Placer County foothills, even installing a sprinkler system on the roof.

Yet a few weeks ago, her insurance carrier — Lloyd’s of London, known for insuring high-risk properties — told her it was declining to renew her homeowners’ policy. Lloyd’s also dropped coverage on two rental properties Burt owns in Graeagle, a heavily forested community northwest of Truckee.

Burt was already paying a lot for insurance — $6,300 a year for the three homes — and now fears that her premiums could double or triple as she shops for replacement coverage. Rising premiums are also hurting her livelihood as a real estate agent: Burt lost a sale in Colfax recently because the buyers couldn’t find insurance for less than $6,900, and their lender backed out of the deal.

Two consecutive disastrous wildfire seasons have created a budding insurance crisis for thousands of Californians who live in and around fire-prone areas. Stung by $24 billion in losses, insurers are imposing rate hikes or dumping customers altogether, leaving homeowners to seek replacement policies that can be two or three times as expensive.

“It’s really sticker shock for people to see their homeowners’ (premium) go from $1,200 to $3,600,” said Richard Harris of Harris Insurance Services, an independent agency in Grass Valley. “They can’t afford these increases, and they leave crying. We can’t help them. You can only have so many people leaving your office crying.”

State officials know they have a problem on their hands, though lax insurance industry reporting requirements make it difficult to determine just how widespread it is. A task force advising Gov. Gavin Newsom and the Legislature reported in June that homeowners’ insurance costs at least 50 percent more in wildfire zones than elsewhere.

7 Responses to “Emerging Climate Crisis for Home Insurance”


  1. […] via Emerging Climate Crisis for Home Insurance | Climate Denial Crock of the Week […]

  2. Earl Mardle Says:

    Well damn, the people who specialise in risk assessment are moving as a group. We can stop having arguments about the data with the deniers, just refer them to their insurance company and the bank they fondly imagine will provide the mortgage to the next biggest fool to buy their beachside property. Oops, turns out they are the “last” biggest fool after all.

  3. rabiddoomsayer Says:

    May force us to rethink how we build houses and that is not all bad. New thinking instead of doing the same things over and over again and then wondering why the result doesn’t improve.

    • Earl Mardle Says:

      Aye, but even if we rethink all that, the “value” of millions of buildings that represent a significant chunk of the asset base is being reset to zero, that is pretty much the definition of deflation. And since the equity in those buildings will not be available to the “owners” to reinvest in those new buildings; in a fragile economy there will be consequences.

    • rhymeswithgoalie Says:

      May force us to rethink how we build houses and that is not all bad.

      Decades back when I was looking for a replacement sliding glass door for our house, I went in with the minimum requirement that they be double-glazed and have good bearings. As I flipped through the catalog, I noticed a low-featured door that was priced at less than 30% of the cheapest of the other doors. It was called “The Builder’s Special”. Epiphany.

      Ask most professional home builders about the materials they use, and they may refer to features like quality or durability, but when it’s time to spend money, it comes down to price.

  4. rhymeswithgoalie Says:

    Rising premiums are also hurting her livelihood as a real estate agent: Burt lost a sale in Colfax recently because the buyers couldn’t find insurance for less than $6,900, and their lender backed out of the deal.

    Of course I don’t know her individually, but I don’t trust realtors in general to warn people if their houses would be uninsurably vulnerable to wildfire or flood, or if SLR will make their community’s housing lose most of its value. On top of that, I don’t trust legislators in a lot of states to mandate reporting of such problems as part of sales disclosures.

    Meanwhile, skeevy lenders can still benefit from selling 30-year mortgages on houses in such doomed communities, and sell them off to the robotic dopes in Fannie Mae and Freddie Mac, which would probably seek another taxpayer bailout when they are surprised by the obvious.

    Scratch a pessimist and you’ll find a disillusioned idealist.


  5. Reblogged this on The Most Revolutionary Act and commented:
    Two consecutive disastrous wildfire seasons have created a budding insurance crisis for thousands of Californians who live in and around fire-prone areas. Stung by $24 billion in losses, insurers are imposing rate hikes or dumping customers altogether, leaving homeowners to seek replacement policies that can be two or three times as expensive.


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