Wildfires may soon be uninsurable risks for homeowners

https://www.cbsnews.com/news/wildfires-may-soon-be-uninsurable-risks-for-homeowners/

By Ed Leefeldt
updated Dec 13, 2018

Homeowners in wildfire-prone areas of California and other Western states now have yet another worry: Insurers have issued an ominous warning that they could be facing a "wildfire deductible" in coming years or, even worse, the prospect of having their home insurance canceled altogether.

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Are insurers' current losses from conflagrations like the Camp Fire bad enough to cause serious economic losses for insurers? No, said Amy Bach, executive director of San Francisco-based United Policyholders. Property-casualty insurers now have a huge "policyholders' surplus," the amount of money available to pay claims, of nearly $760 billion, the highest in history.

But that doesn't mean they want to lose money in the future, especially as the wildfire danger from climate change, drought and unmanaged forests increases in states like California. If the current problems continue and grow, "there will be a strain on both public and private insurance," predicted Birnbaum.

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Advocates for the industry are quick to point out that this won't affect all 40 million Californians, such as those who live in urban areas. But it will cost people who live in rural or "wildlife-urban interface areas," where tree lines and brush meet development and tract homes in hilly areas. These are the very areas where many city-dwelling Californians want to escape to and live.

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