Over the past year, residents of the Bobcat Fire area have been protected against the removal of their fire insurance, but that protection ran out over the weekend.
California’s seemingly endless wildfire season is forcing insurance companies to pay huge claims. In order to manage future risks, they abandoned clients in high-risk areas, over 250,000 policies in 2019 alone.
â€œYeah, that would definitely concern me because we need it,â€ said Mary Phillipps, of La CaÃ±ada.
That’s why state insurance commissioner Ricardo Lara has issued one-year moratoriums on insurance policy cancellations after major forest fires. The moratorium for people living in the Bobcat fire zone ended on the 25th.
â€œYeah, I guess I should be worried,â€ said Bob Coscarelli, also of La CaÃ±ada. “Like I say, ‘I haven’t received the invoice yet.’ ‘”
David Russell, professor of insurance and finance at Cal State Northridge, said that if you find yourself in a high risk location, you will end up paying the price for that risk because nothing is free.
Russell says construction in wooded areas combined with climate change has led to growing fires.
“In some areas denial of insurance is a wake-up call you need to take to act,” he said.
He says insurance companies must also take action and use satellite imagery to determine risks and rates.
“This technology could help lower rates for homeowners who actually clear the brush and create a defensible space around their home. Instead of rates based on their zip code, they would be based on their street or individual home.”
For those who find themselves abandoned, there’s the California Fair Plan, which this resident chose.
The state’s fair plan is only for fire coverage and isn’t as comprehensive as private insurance plans, but Russell says it’s an option for those with no other way to protect. their home, which is probably their greatest asset.