Lloyd and his wife later bought another house in Hidden Valley Lake, a town that has taken ambitious steps to reduce flammable vegetation, but their insurance premiums remained at more than $4,500 a year. years, more than three times higher than their last home in Kansas. Lloyd is worried that his insurer will increase prices further under the new regulations.
Other Western states like Colorado and Oregon are also seeing insurance gaps appear after major wildfires, although their problems are less severe than the Golden State's. For example, in Colorado, officials just established one State fire insurance support like California's FAIR Plan, because in just the past few years customers there have been abandoned en masse. California's grand bargain with the insurance industry provides a blueprint for those other states: If you want to address coverage gaps, you need to give insurers broad authority than to set prices.
Even this may not be enough. The past few years have seen a decline in major wildfires like the ones that occurred in 2017 and 2018, but this week's fires in the Los Angeles area could cause billions of dollars in damage, equal to an event like the Camp Fire.
Joel Laucher, a former fire insurance and regulatory expert at consumer advocacy organization United Policyholder, said that the damage from the Los Angeles fires could lead to further price increases and create more resource gaps. more supply.
“There's no doubt these will be big losses,” he told Grist. “Certain areas will certainly have new challenges, to the point where insurers will be able to charge what they believe those areas deserve.” Laucher said that insurers may not be able to refuse to renew as many policies as they could under previous state regulations, but they can still avoid selling policies in some areas. affected area.
Frazier, of the insurance trade group, expressed similar concerns. He said another monster outbreak on the scale of 2017 and 2018 could drive the insurance industry away from the state again, despite the commissioners' reforms.
“If we have a few more unprecedented years, all bets are off,” he told Grist.