After years of record-setting wildfires in both size and cost, insurers are quietly pulling back their exposure across the Western United States.
Officials in California, Colorado, Montana, and Washington are receiving more complaints from homeowners whose insurance companies have refused to renew their coverage.
In California, since the state began collecting data in 2015, nearly 350,000 home insurance policies have not been renewed in areas at high risk for a wildfire.
The data released in August did not say how many people were able to purchase insurance elsewhere or how much more it cost.
“This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market, we could see communities unraveling,” California Insurance Commissioner Ricardo Lara said in a statement.
Another measure of the growing reluctance of insurers is a spike in people buying insurance through the state-run FAIR Plan. In the California counties with the most homes in high-risk areas, homeowners getting coverage through that plan increased 177 percent while staying flat statewide.
The insurer pullback is also happening outside of California.
In Montana, insurers are changing the way they evaluate wildfire risk, according to reports. While in Colorado and Washington have both seen an uptick in complaints from people in wildfire-prone areas about insurance companies.
The question now becomes whether insurers will move back into high-risk areas as their financial reserves recover, something that has happened following previous large-scale disasters, Dr. Carolyn Kousky of the Wharton Risk Center told the New York Times.
Read more at nytimes.com.
