In response to WIRED’s questions about State Farm’s coverage changes, Sevag A. Sarkissian, the company’s spokesman for California, highlighted previous statements the insurer has made about cease new business and your decision not renewing some policies. “The rate changes are driven by increased costs and risks and are necessary for State Farm General to deliver on the promises the company makes to its customers every day,” Sarkissian says.
“While we pause the sale of new homeowners insurance policies in California in 2022, we continue to offer coverage to most existing homeowners insurance customers,” Allstate spokesperson Teny Josephbek said in a statement. to WIRED. Rising costs also explain Allstate’s rate increases, he says. “Higher home values and repair costs, along with more frequent severe weather, drive higher payments to help customers get back on their feet, so we need to adjust rates to better reflect the cost of protecting our customers”.
Liberty Mutual did not respond to a request for comment.
In fact, fires are becoming more costly. Climate change is creating conditions that make wildfires more severe and the wildfire season longer, says Char Miller, a professor of environmental analysis at Pomona College in California and an expert on wildfires in the western US. USA, an opinion supported by recent studies from the National Oceanic and Atmospheric Administration.
“The drying out of the American Southwest since 1980 has generated so much fire that too many landscapes are on the verge of exploding,” Miller says. Once a fire starts, he adds, today it can quickly become uncontainable. “The planet is warming rapidly, increasing the desiccation of vegetation and establishing almost impossible conditions for fighting fires.”
Forest management in California (including a misguided approach to fire suppression for more than a century) has also been responsible for the negative trend in wildfire activity, allowing combustible materials to accumulate in wild landscapes. of the state. Some burning is actually good for California wilderness areas, as it keeps levels of flammable materials low.
Californians have also moved to more risky and fire-prone areas, in what is known as the wildland-urban interface, or WUI. These are spaces where human development meets undeveloped wildlands that, due to fire suppression, are filled with vegetation ready to burn.
“There are people expanding into areas where they weren’t,” Russell says. “People seeking the American dream are increasingly moving away from Los Angeles and San Francisco, where land is cheaper, but it’s also drier and a little more exposed,” he says.
Taking all of these factors into account, it is not surprising that the estimated number of structures that will be destroyed by wildfires each year is set to double over the next three decades.
But the fires and migration patterns alone have not caused insurers to restrict their offerings, Russell says. He believes the biggest contributor to the crisis is likely the state’s own fire insurance policies and regulations.
In 1988, California voters narrowly approved a ballot measure known as Proposition 103, which gave the California Department of Insurance the right to waive insurance rates it deemed excessive, and required insurers to approve any rate increases before that they could be transferred to clients. This was designed to protect consumers, but as the state was hit by more destructive fires, this power to keep costs down ended up pushing the insurance sector down an unsustainable path.