In its “best” form, it’s requiring those who have bought homes in safer areas statewide to subsidize those in more dangerous areas, which is already absurd, considering those more dangerous areas are already predominately wealthy coastal and hillside areas that can and should pay their own full cost of insurance.
My annual payment with a different insurer nearly doubled after our insurer had to drop the entire zip code purely because half of my zip code is in a high fire hazard zone, even though my property and half of zip code is rated one of the lowest fire hazard zones in the state.
At its most extreme, because of the provisions limiting risk adjustment based on and within zip codes (originally, for redlining, which I understand, but for fire risk it makes no sense considering different locations are inherently riskier), it will and has caused insurance companies to exit the state entirely, and then we’re all screwed.
I do wonder if SCOTUS will revisit this and declare the original ballot measure limiting risk an unconstitutional “taking” from those in safer locations (or insurers themselves), given my understanding is Florida has the same issues too…
It's a ballot measure that's easily defeated as no one wants to pay more for insurance, and no one wants their property values to decrease. But no one wants to face the reality either.
It's likely that as insurance companies drop out, more Californians will find themselves on the state-sponsored FAIR insurance plan, which may already be insolvent. And the state will bankrupt itself and its citizens since no one can make any hard decisions.
Every time I interact with them, they find a new way to break the law. The big one is that they refused to pay for covered damage to our house. After fighting it for about a year, they sent us a lowball check that was less than 25% what they owed.
Our premiums are 4-5x what neighbors with more expensive, higher risk houses pay.
That was a real case of voters voting against their individual interest (near-guaranteed higher property taxes) for their collective wellbeing (the solvency of the state)
We’re no stranger to ballot measures here, for better or worse. I think most Californians will agree with insurance reform when they realize they won’t be able to get insurance otherwise— also the fact that many people in safer areas probably would see rates decrease.
A $600k home that is sure to burn within 20 years will have a much lower premium than a $6m home in the same location, after all.
The 3 necessary components for fire are: oxygen, fuel, and ignition source. No stopping the presence of oxygen. Ignition sources are present with lightning strikes (among other things). That leaves fuel as the thing that can be controlled. If you can't reduce the fuel load around your dwelling, it doesn't make any sense to live there. I live in a forest that has experienced a tragic wildfire in the past, so I'm in a similar boat (but without the Santa Ana winds). Keeping fuel away from my home is something that I think about a lot -- and ACT ON a lot.
I have a neighbor who does practically nothing to reduce his fuel load. It's his legal right, but I think it's foolish. He's told me he likes to keep his property "undisturbed". It sounds like there's much of the same thinking that drives policy in California.
The combined practice of: (1) put out any fire immediately, and (2) do nothing to reduce fuel load, makes for a bad combination in the long run. It would seem to me that Californians should have figured these things out decades ago and be the experts on fire risk management. What am I missing?
They were getting so rich so quickly it didn't matter that they had stupid and unsustainable government practices (not managing fire risk, meddling in insurance, etc).
Human nature, sad to say.
Many properties have no willing insurer left, and have to participate in a state-funded plan (that many fear is not actually solvent). Many more properties only have one or two insurers left.
State Farm was the only insurer left in the Palisades, and my guess is after the moratorium to cancel policies is up in one year, if they can’t reflect the risk in their premiums to account for this fire, the Palisades will have no insurer left either. And then rebuilding will be impossible.
