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Opinion: Wildfire crisis also burning homeowner wallets

Californians have heard plenty about the wildfire crisis that’s afflicted this state for the last few years, highlighted by a rash of huge blazes and evacuations of more than 1 million area residents.

But as the height of the annual fire season approaches, there has been little attention paid to the ever-increasing expenses inflicted on property owners and renters in or near wildlands, who may not ever be burned out, but are certainly getting burned.

That’s because a fire insurance crisis of ever increasing magnitude is now upon California and the state has done nothing to prevent or mitigate it.

While thousands of owners and occupants of properties fully or partially destroyed in fires from Redding to Paradise to Napa to Ventura and Malibu still wrestle with lawyers and insurance companies as they try for damage compensation, other thousands are getting hit now via their mailboxes.

Increasing numbers of potential fire area residents from the Sierra Nevada Mountain foothills to plush residential areas in suburban San Diego County and the hills of the East Bay are receiving cancellation notices from their property insurance firms, forcing them to seek new policies just when most insurers want to rid themselves of potential liabilities in or near California’s forests and brushlands.

Others are seeing their policy premiums doubled and tripled.

One typical homeowner in Oakhurst near the southern approach road to Yosemite National Park saw his rate raised this spring from just over $2,000 a year to more than $6,000. But at least he can still buy insurance on the general market.

Thousands more are being forced onto the open market, trying to obtain coverage from reluctant insurers.

It’s a situation reminiscent of the mid-1990s, when every large insurance company in America boycotted the California homeowners insurance market. They cancelled or declined to renew virtually every homeowners insurance policy in the state after the 1989 Loma Prieta earthquake and 1994’s Northridge temblor combined to inflict billions of dollars of expenses on them.

Rather than insisting that insurance companies continue to offer quake insurance or be banned from selling other lucrative coverage — like car and truck policies — in California, then-Insurance Commissioner Chuck Quackenbush allowed the boycott to continue and proposed creation of a state-run system that evolved into the California Earthquake Authority (CEA). Insurance companies resumed selling homeowner policies, but are off the hook now in California quakes, and would love the same to apply in wildfires.

But so far, state lawmakers — like their predecessors who were cowed during the 1990s — refuse to do much of anything. Among the biggest unresolved issues that legislators won’t directly confront this year is whether to limit liability of insurance companies with burned-out customers.

All of which means that what former Gov. Jerry Brown said last year about wildfires and climate change — “All hell is breaking loose” — applies now to more than actual fires.

Former Insurance Commissioner Dave Jones foresaw some of this two years ago, observing that insurers must renew policies for a time in actual fire disaster areas, but they don’t have to renew policies in non-disaster areas when they expire.

That’s the root of the current crisis. The insurance companies understand many so-far-unburned parts of California will inevitably become disaster areas and don’t want their own finances impacted when those disasters hit.

There is a safety net of sorts for homeowners when their policies aren’t renewed. It’s called the Fair Plan, roughly equivalent to the CEA in that it must insure anyone who applies. But Fair Plan rates are much higher than other fire policies, even at their increased rates. Yes, by law they cannot be excessive, but no one is sure what that means.

Before last year’s fires, the number of Fair Plan policies was rising by about 1,000 per year. That will likely climb substantially over the coming months and years, eventually making the fire insurance crisis less about scarce policies than it is about money.

The bottom line: Even if their houses don’t ignite in any of the next few fire seasons, plenty of homeowners will see their wallets get seriously burned, with state government unable or unwilling to protect them.

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Email Thomas Elias at His book, “The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, visit

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