The soaring cost of home insurance has consumed the California town of Paradise, residents and officials say, just after the five-year anniversary of the Nov. 8, 2018, Camp Fire, the deadliest wildfire in California history. Residents have received annual premiums that are near or exceed $10,000—leaving many to wonder how they're supposed to rebuild their hard-hit community when insurance is so shockingly high for houses in an area that's supposed to be among the most affordable in California, per the AP. The wildfire that ripped through Paradise and surrounding areas, killing 85, sounded an alarm to national home insurers about the costs of wildfires fueled by climate change.
Seven of the 12 top home-insurers in California—including Farmers Insurance, State Farm, and Allstate—have paused or restricted new business in California, saying they can't afford to take on new clients. California's Insurance Commissioner Ricardo Lara is trying to step in to reform the system and to make the private market more robust, but the bulk of the changes won't take effect for at least another year. Neither the state Insurance Department nor a major industry lobbying group could explain the sharp price increases five years after the fire, when so many steps have been taken to protect the community against future wildfires, including initiatives to bury power lines.
Insurance Department rep Michael Soller said private insurers should be able to offer discounts for community fire-hardening efforts sometime early next year, but the risk of wildfire still exists in Paradise. He said California home insurance premiums rose about 35% on average between 2017 and 2022, but are still lower than other large states with big climate risks, such as Louisiana, Texas, and Florida. The California Fair Access to Insurance Requirements Plan averages 1,000 new applications a weekday from homeowners unable to find affordable home insurance in the private market. As of September, it had written more than 330,000 policies—up from nearly 273,000 plans last year and 127,000 in 2018.
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Carl Johnsen, a retired drywall contractor, has lived in the same house since 1979, when he moved to Paradise. It survived the 2018 fire, but his previous insurer dropped him, and he received a new quote of over $14,000 that he's not inclined to pay, he said. Johnsen doesn't feel good about going without fire and liability coverage, but he feels he has little choice. "I guess I'd rather do that and have a place to live, unless it burns down," he said of forgoing insurance. "I gotta have money to buy food, and pay taxes." Read the full story.
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