Opinion: Why should all Californians pay for the fire insurance risk only a few face?
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A home burns as the Dixie fire jumps Highway 395 south of Janesville, Calif., Aug. 16, 2021. Two insurance industry giants have pulled out of the California marketplace, saying that wildfire risk and the soaring cost of construction prompted them to stop writing new policies in the nation’s most populous state. (AP Photo/Ethan Swope, File)
After State Farm said it would stop selling new home insurance policies in California, Insurance Commissioner Ricardo Lara responded that the state will explore new rules allowing insurance companies to consider climate change when setting their rates.
But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk, including communities threatened by wildfires. This move is aimed at preventing insurers from fleeing the state over fears of massive losses from natural disasters.
While a multi-year surge of non-renewals affected roughly 235,000 households by 2021, there are more than 13.3 million households in California. Lara’s rule change could mean higher rates for all homeowners, who are already seeing dramatic cost increases, and could result in more expensive homeowner and renter insurance bills.
Eight insurance companies have asked California for rate increases of at least 20% or higher, according to the state Department of Insurance. State Farm’s request was approved in December.
Why should the remaining 13 million households be required to pay higher rates when we do not live in communities threatened by wildfires? Why not instead ban home construction and the rebuilding of homes that have burned in fire-prone areas? At a time when climate change is making wildfires more common and more dangerous, isn’t it time to consider banning such construction?
Starting this month, PG&E will increase customer rates by 13% to cover the cost of undergrounding 1,230 miles of powerlines and place covered conductors on another 778 miles. The utility said that undergrounding lines essentially eliminates the risk caused by their transmission and distribution lines.
Again, why should millions of households have to pay higher rates when we do not live in these areas?
In 2018, the group 1000 Friends of Oregon released a report that recommended avoiding development in high-risk areas, “unless they are related to farming or forestry.” Many have backed the idea. Five days before his 2018 retirement as director of Cal Fire, Ken Pimlott told the Associated Press that officials should consider banning home construction in vulnerable areas, saying “we owe it” to homeowners, firefighters and communities “so that they don’t have to keep going through what we’re going through.”
It is also extremely expensive to live in California especially with inflation increasing. The consumer price index, which measures the prices paid by typical consumers for retail goods and other items, increased by 7.3% for fiscal year 2023-24. It rose 5.6% the previous year.
No wonder people are leaving California – who can afford to live here? Perhaps, California should be as equally concerned with people fleeing the state as they are with insurance agencies fleeing.
I don’t blame State Farm, American International Group, Chubb and others for not renewing insurance for customers in fire-prone areas. In fact, I think they should have the ability to choose not to pay if customers decide to rebuild in those areas after a wildfire.
If California officials represent the entire constituency of the state, why then should the vast majority of households have to shoulder the costs for a small percentage who live in fire-prone areas?
When assessing rates and financial burden, California officials should consider the price tag for the majority of households instead of the few. Considering the financial costs and far-reaching harm wildfires produce, it is time to ban house development and building in fire-prone areas.
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Why should I have to pay more for uninsured motorist when I pay my insurance every time?
It’s insurance! Plain and simple!
Same reason you have to pay for illegal immigrant health care; Your government says so.
I will always help the sick or injured!
No matter who they are.
Good for you. Not that it’s likely you actually will. Just require others do it for you.
consider the source:
Why should all California homeowners pay for the wildfire insurance risks only faced by a relative few, asks Jacquelyn Johnson, a retired Sacramento area transit worker.
Now then, why is CalMatters, and Kym Kemp elevating this person over the rest of us by giving her the megaphone?
Is there any illegals out there who want to put some time on my Social Security #?
Do me a favor!
So what do you do for health insurance? You have the answer, right?
You pay way more for uninsured Americans than you ever do for “illegal immigrants.” And illegal immigrants pay taxes for tons of things that will never benefit them.
Really? Why would “uninsured Americans” cost anyone more than “uninsured” illegal immigrants?
Maybe, just maybe, illegal immigration itself is a cost to everyone already here? From the cost of maintaining a border that works poorly, a court system to give hearings if caught, police to try to catch those taking advantage of human trafficking or language differences, social stresses where immigrants concenrate, competition from low wage workers to services provided because illegals are usually lower income so use food banks, free medical services but still send money back home? Who are, in fact, uninsured for much of anything while most Americans are paying for insurance up the wazoo? Insurance is for those with something to loose.
But then most people have this vision of “illegal immigrants” as mostly starving, fearful individuals desperate for work after escaping a tyrannical country where their lives are at risk. How the public image of that can coexist with the public image that there is also a wide spread system of coyotes who charge $5000 to $15000 to smuggle people across the border is really strange? That is an industry that thrives on the stories of the bounty just on the other side of the border, like those that made the gold rush or the Conquistadors. Not so much the “huddled masses yearning to breathe free” sort of thing. But more likely a restaurant or other business owned by an earlier immigrant now hiring.
If poor confused desperate immigrants were the norm, that would be noticed on the streets. Mostly illegal immigrants have a destination in mind where relatives or friends of relatives take them in, arrange work and fake id’s if necessary. Or are recruited by unscrupulous employers who find illegal laborers make a cheap workforce they can more easily control to make money for themselves. Or both things at the same time. Why is this a good thing?
ALL taxpayers pay taxes they will never benefit from.
As of jan 1st 2024 Illegal immigrants just became eligible for full medical benefits in California..
How do you sign up for “illegal immigrant healthcare”?!
Sounds superior than the “Healthcare Marketplace”.
Actually Fire insurance starts looking like a pretty good deal when we compare it to healthcare!
One thing to keep in mind…most of the losses from wildfire are occuring in dense development in “town”. Look at the Oakland Hills, Tubbs Fire, Paradise, Redding, Talent, the condos outside of Boulder, CO., The fires could be thousands of acres, but the losses come once they hit the subdivisions, not your traditional rural properties. Structure to structure spread. To a fire, your new house is still just a pile of dead wood.
The formulas for survival aren’t so simple. Here in Humboldt for example, I would rather insure a home in Willow Creek than in Shelter cove. But Willow Creek burns every year. Exactly. higher “risk”? Or risk mitigation?
There is probably a day or two a century when the “Arcata Hills” will take off! Are property owners there ready? Are you just planning on waiting for whatever the insurance company gives ya?
Everything in CA is new. If your town is over one hundred years old, there’s a good chance some early version of it burnt down already.
No one but PG&E should have to pay to bury their lines.
where do you think the money comes from when it’s being required by an unfunded mandate ? corporations and utilities don’t pay fees or taxes, they ‘absorb’ it as a cost of business and charge customers for it.
The remedy for this has always been competitive friction. Our current model of monopoly utility provides no incentive for PGE to innovate, reduce costs or improve service. its not a coincidence that the states with the highest energy costs also have the lowest competition within the energy markets.
Nope…some industries have no motive for public health and saftey and shouldn’t have therefore any power over it whatsoever…actually most industries: food, health care, transportation and on and on
HA! In countries that have decent tax system and better priorities than each person for themselves mythology of US lines were buried long ago…like half a century by the leverage that governement funding provides.
The US doesn’t have a mythology as you put it. It has a Constitution that limits authority of the Federal government. It’s real. Actually -gasp- law created in a time when centralized government meant kings. The US actually was pretty good at not having kings. Long before Europe sorted it out, usually by wars. That exchange of freedom from having someone ordering its populace around did necessitate a measure of personal responsibilty.
Then there’s the fact that Europe has a population density of 4 to 6 times the US. No one is all that far away from each other in Europe which makes power less expensive per person. But then no they aren’t even mostly underground. “41 percent of European power lines between 1 kilovolt and 100 kilovolts lie underground, according to the Europacable industry group. In PG&E’s territory, which includes many sparsely populated rural areas, only 18 percent of distribution lines are underground.”
https://www.bnnbloomberg.ca/why-europe-pays-less-than-u-s-to-put-power-lines-underground-1.1224125
No. You’re wrong.
The U.S. has a long history of laissez faire capitalism which is the backbone of our government.
It has nothing to do with monarchies.
Laissez faire capitalism institutes “every man for himself” mentality.
That’s why a population of less than 1% of the total populous holds more than 99% of the wealth in this country and, to some extent, the world.
If we had higher and better enforced taxes imposed on the elite, the rest of us would not be fooled into fighting amongst ourselves…
Higher taxes on all, and more equitable salaries, must include not just safety nets, but a bona fide system in which superior health care, housing and education are a mandate for all.
Just for fun, imagine all the money spent on fire insurance to replace stuff that burnt, was instead spent on local and State firefighting, and fuels work. Instead of paying losses, maybe we could prevent some.
What % of your monthly income would you be Willing to give up?
you are right thrivalist.
And as someone points out further down, almost all of Humboldt County residents are in areas that the author of the opinion piece, would find unacceptable to insure. the market can only do so much, then the government needs to step in and smooth the corners
Decent tax systems, you mean countries that tax their citizens at a rate of over 50%? How is that “government funding” anything… I already give California well over 30%..
do the urban area get power transferred through the rural part of the state, and use the bulk of the load generated ? they should pay. also, when climate change is shownto be not the cause, or not real, or a scam, will they refund all the excess policy charges? i wonder
Arguments for shared responsibility:
Collective risk: Wildfires often affect vast areas, impacting communities beyond those directly in the fire’s path. Smoke pollution, evacuations, and disrupted infrastructure can have statewide consequences. Sharing the insurance burden spreads the risk and ensures resources are available for response and recovery efforts across the state.
Equity and affordability: High-risk areas often face prohibitive insurance costs, making it difficult for residents to secure essential coverage. A statewide system could pool resources and cross-subsidize premiums, making insurance more affordable for everyone, including those in high-risk zones.
Market stability: A fragmented insurance market with varying risk assessments and pricing can be unstable and prone to collapse in the face of major disasters. A statewide system could provide greater stability and attract more insurers, improving overall market access and competition.
Arguments against shared responsibility:
Individual responsibility: Some argue that homeowners should be responsible for managing their own property risks, including choosing to live in high-risk areas. They believe a statewide system unfairly burdens low-risk residents with subsidizing those who take on higher risks.
Moral hazard: Concerns exist that a statewide system could incentivize risky behavior, as homeowners in high-risk areas might be less likely to take fire prevention measures if their losses are covered by a broader pool.
Complexity and implementation: Designing and implementing a fair and effective statewide system is a complex task. Factors like property values, fire risk mitigation efforts, and individual risk profiles need to be considered, potentially leading to bureaucratic challenges and administrative costs.
Ultimately, the decision of whether or not to implement a statewide fire insurance system in California requires careful consideration of these competing arguments.
Bard-
But we have neither. Various government rules act to prevent individual actions to safeguard themselves or get insurance for themselves based on their individual actions. The government orders the lifeboat size, requires everyone gets a seat and makes me pay for it.
Humboldt County is, of course, almost entirely fire-prone.
https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/-/media/osfm-website/what-we-do/community-wildfire-preparedness-and-mitigation/fire-hazard-severity-zones/fire-hazard-severity-zones-map-2022/fire-hazard-severity-zones-maps-2022-files/fhsz_county_sra_11x17_2022_humboldt_ada.pdf
Except the flood and tsunami zones. LOL?
The areas where over 90% of the population live are not.
This article begs the question: Why should the overwhelming majority of people, who are not at risk of wildfire, be asked to subsidize the lifestyle choices of the much smaller percent?
Because everyone who owns the properties pays property taxes just like you. Hence, fire departments. In addition, almost all areas of California are prone to wildland fire, including the most dangerous suburban-rural interface, which leads to fires in portions of larger, city areas. Ban cities, grow more broccoli.
Nope.
Many properties in Humboldt don’t pay any taxes towards firefighting. Almost all Fire Districts funding comes from an ADDITIONAL special tax on top of your property tax assessment. Petrolia Fire is the only rural district ( Formed in the early ’50s)I know of who receives a percentage of the Ad Valorem property tax. Until Cybelle Immit, and John Miller came along, the County actively discouraged Fire Districts’ formation. No rural fire districts were formed, or expanded in Humboldt between 1987 and maybe 2017. There are Volunteer Fire organizations that have agreements with CalFire, but still have no tax based funding like Honeydew VFC’s 100 square miles of private property. There are vast swaths of the County with no fire service, like Blocksburg, between Bridgeville, and Alderpoint.
We all complained the CalFire tax away after a year or two; that was probably cheaper than the increase in insurance premiums.
How about because the power is generated farther away from large populations and is transmitted through rural areas . One could easily argue that if citys were forced to be closer to the power generation there would be even less risk of fires , however this is not the case and so why should those who live closer to the generation of the power be charged for the prevention of risk so that those in the cities can have their power ? But california seems to cater to large money , that is why and how great vast cities are built in deserts and water is stolen from the rivers several states away just to feed these large cities greedy people who want green grass to chase their little white balls around on
Except there are dune fires all the time. All it takes is a bozo and a fire can start anywhere. You have one major fire, even if it’s started by a human, your area is immediately “fire prone” according to insurance.
That’s not accurate – the wine country fires in 2017, the Camp fire in Paradise, the Marshall fire near Boulder, Colorado, and the LaHaina fire last year (along with others) all prove the point. Paradise was the only one of those towns that was considered at high fire risk. All of those began as wildfires and transitioned to urban fires, going house to house and making the vegetation essentially irrelevant. Any community in very dry and very windy conditions is capable of becoming another disaster. Unless homeowners and residents harden their structures to resist ignition, especially by wind borne embers: https://www.pnas.org/doi/full/10.1073/pnas.2315797120
Hardening has been shown to be effective, and UC Cooperative Extension has some excellent how to guides, along with the Humboldt County Fire Safe Council. Feel free to contact me at [email protected] if anyone wants help achieving wildfire safety and resiliency.
Wow, man, that’s a lot of data to absorb vs. “whatever feels right to me, man.” Every time the wind blows our way from nearby fires inland I know that just letting them go is not the answer. Fair taxing is, and efficiency of labor and equipment and paperwork reduction always needs attention in California.
While people stuff their obese faces with in and out burgers we all pay the price of rising health costs. micro plastics in all our water cause someone just had to have blue sparkles on their fingernails or car paint or dog collar. We’re just a sick species.
You are not wrong..
That is socialism in action. People were all excited about healthcare for all. Same thing paying for health insurance for people that can’t afford it or worse refuse to work. Wonder why medical cost is so much? Well, there is the answer. You are not only paying for your medical cost but for all the people that do not pay their medical bills or get steep discounts, so the hospitals jack up the prices to cover the nonpaying people. better yet. Wonder why education and taxes is so high? For all the people that have kids on welfare. Not only are you paying for your kids but for all the people that refuse to work and are on social programs that you pay for. Yip socialism at its best.
Keep voting democrat and you get more and more of the same until it all collapses like we are seeing now. The working are taxed to death to keep the rich elite rich and keep them getting elected while our middle class disappear, and we all become the poor.
That’s right all these social Programs of the great society are fine and dandy until more people are using them then paying for them. Get your hand out of my pocket and get a job.
The rich need to pay as much of a percentage of their income as you do!
Look at Jeff Bezos: after his divorce he was still worth 60 billion. More than he can spend. Think about how much his business depends on Federal infrastructure. How many miles a day do Amazon packages get trucked on Federal highways? How many aircraft fly packages in and out of Federally funded airports?
The rich top 10% pay almost 90% of all the taxes.. The top 1% pays almost 50% the bottom 50% pays less the 3%..
Yeah, “people were all excited about healthcare for all.” Well . . . .um . . . .aw . . . .guilty, I guess. Wow. Imagine standing around in a crowd at the Pearly Gates and out comes St. Peter: OK, where are all the damn people “all excited about healthcare for all,” you’re OUT of here!
Wages have risen for regular folks and unions are winning again and President Biden marched with them. Other failures of the Biden Administration include NOT attacking the United States Capitol with his private brigands and mobs, not praising Putin, not pushing Orban Renewal, not dissing NATO and Ukraine, the list goes on.
Meanwhile, The Modern Republican Party is trying to turn Jan. 6 into a Lost Cause like the Ol’ Confederacy.
Generate electricity inside your city limits if you want to make this argument.
Are you kidding?
I am poor but do own my home. I live in an historic rural flood zone. The restriction on my ability to save more than a small amount of money leaves me with a choice…flood insurance or fire insurance.
Really.
I have a home in a flood zone, and a home in a fire zone…
It’s California: Flood, Fire, Earthquake or Landslide…
Costs are costs, and insurance also rose because home values rose…
If you can’t afford to pay, you can’t afford to play, and my neighbor moved because his fire insurance was $10,000/year, while mine is $2500…
It sucks, but if you have a $30,000,000 house, then you are the rich guy paying the most insurance!
Almost every insurance company has a budget or monthly payment plan. So it’s not likely that restrictions on benefits when having more than a certain amount in the bank should be a problem. If there’s money to be saved, there’s money to pay monthly. Or quarterly.
Oh well, why do some of my taxes still go to Ukranian citizens retirement funds (wtf) as well as continued studies on why masks (don’t ) work against anything but airborne particulates much larger than virus? Go figure…..party on.
no they do go to buy bullets and guns for their soldiersthough–the ones fighting our proxie war against russia— that was initiated by rooody joolianee and your orange narcissist–orange is the new black baby–because they want to keep the oil flowing and have an oligarchy in the us as well as in the ussr-back, back in the ussr
you should probably turn off the fear porn aka newsmax, and go outside and listen to the birds more often.
Derp
Ukrainian retirement funds? WTF are you talking about? NewsMax bulletins? Where is that on the tax forms? Where, in reality, is anything Trump says NOT a lie?
This could become an interesting debate. As a rural dweller, I’m not thrilled with the idea that I should have to live in to town because I cause your insurance to go up. How about: why should I pay the same taxes for police when they hardly ever come out here? Why should I pay the same for the post office to deliver your mail to your house when I also have to pay for a box to put my mail in and go get it? Why do I pay the same gas taxes for road maintenance when our roads are full of potholes and town occasionally has one? Shall we go on?.Life isn’t fair.
I asked myself, why is Governor Newsom going to give $3 Billion, in free medical care, to one million criminal illegal aliens? We’re now subsidizing illegal aliens with our hard-earned taxes, while California is experiencing a $ 68 Billion budget deficit. Newsom and his policies are unhinged.
Poor little insurance companies. Let’s start a Go Fund Me for them…
Socialism is great when you get to take from someone else.
It is not so fun when others get to take from you for bad decisions they made…
If you have a better idea for funding public projects like roads, police, fire, and military, I would like to know what it is. If your baseline mindset is no public funding whatsoever, then just call it “socialism” and sleep contentedly, oblivious to reality, feeling ripped off everyday. Refuse to use public facilities, like roads, in protest.
PGE is now before the PUC for income based electrical charges . Which means your charged rate is set by your stated income. This was passed by ca legislators. I believe there might be a lawsuit to stop it.
Worst opinion letter I’ve read in a while.
another reason why private corporate enterprise cannot be trusted with the role of government to protect communities.
and why I think we should save the postal service, because UPS will just fold if the money dries up and the itch to privatize fades
I think we’re missing the big picture here.
The juste of this article, the cause cited as the reason for this relatively recent phenomena of wildfires, is GLOBAL WARMING.
WHO HAS MOST BENEFITED FROM GLOBAL WARMING?
The same people who promised to lower their carbon emissions within the next ten years. And the next ten years and the next ten years – but have never done it.
It’s the international corporations.
Still billowing smoke into the atmosphere. (And you might think they are changing, reducing emissions – here in the U.S., – but those same corporations have just shifted their operations to places like India, where they are glad for the low wage jobs, and the government doesn’t care about emissions. India is supposedly the worst, nowadays.)
Laughing all the way to the bank…
Those of us who are attempting to survive in these not so wilderness areas are doing so either because it’s where we and many generations live and have grown up and is maybe the only homestead available to us and our extended families, or it is where those of us, like me, have moved, because it is the only place where we can find affordable housing.
Have you seen the commercials, just now coming out on YouTube and I’m sure, tv?
Showing the average Social Security monthly check of about $1,800?
It asks, “Where am I to live?”
That’s the reality.
Try renting ANYTHING within 200 miles of a city, in the so called “low fire risk” areas, and eat and pay for utilities on that amount of money.
I am one of those disabled persons trying to live on a small Social Security check.
I looked and looked for a home to buy, while renting in Arcata and my landlord kept raising the rent right under my feet, making it impossible for me to stay there, for a home along the coast. In the less fire prone area.
I found a garage for sale, across from what appeared to be a crack house, in Rio Del…
I finally was lucky enough to snatch up this tiny cabin in Willow Creek, not still in my budget, but a crafty mortgage broker somehow made it work.
Willow Creek was the closest place I could find anything to buy that was within my budget. The real estate here was a third less than on the coast.
Still,
I have to pay HALF of my income just for the mortgage.
Every month I have to juggle food and utilities to see which I can afford.
My fire insurance has gone up by leaps and bounds, almost making living here impossible.
Real estate is less expensive the farther one gets from the cities.
More and more people are being pushed to these rural areas because of the lack of affordable housing.
Punishing the most needy by not renewing fire and home insurance cannot be the answer.
The State Insurance Commissioner needs to rethink this.
Families on my road and in my community have lived here and raised multiple generations, sometimes simultaneously, in the same homes.
That’s all they’ve got.
The real problem here is global warming.
The corporations who benefit from manufacturing and are responsible for the temperature increase should be paying back and should absorb these costs.
Not the simple homeowner who is just trying to survive.
I like the cut of your jib
As the planet gets warmer and warmer, EVERYONE will live in a fire prone zone, even us. Look at what happened to Maui! That could and may be us. It’s kinda hard to say stop building in fire prone areas when most areas are either already there or on their way to being in that category. And on the California “exodus?” Why should we worry people are leaving? That’s more housing for the rest of us when there’s already not even close to enough. And you know what’s in the works to be happening to all the places everyone’s fleeing to? The housing prices and rents are skyrocketing, displacing people from there, creating homelessness just like here. They talk shit about us now but Texas and Florida and all them Bible Belt “cheap” places to live states are on their way to experiencing struggles of any place a lot of people want to live.
So, insurance is all about spreading the cost among a everyone insured. Although some wildfires are unstoppable, insurance companies should be able to require people to have a defendable space cleared around their house in fire-proned areas. This would reduce the impact of fires and make it better for everyone. Cities and counties could have the same requirement, but it would be more expensive and difficult for them to enforce them.
Since a good part of Santa Rosa burned down in 2017 including businesses and houses deep in the city and the entire city of Paradise burned down in 2019.There are lot of other examples of wildfires in California urban areas. I am not sure where in California you would have to go to not be in a fire prone area.
to the question “Why should millions of Californians pay for a high fire risk insurance?” Short answer—ALL of California is a high-fire risk area! In case you’ve forgotten some (many) of the most costly wildfires have happened not in forests but in housing developments/urban areas on the edge of open spaces. So unless you’re advocating for no development on the urban/rural interface (or in upscale suburbs, think Oakland Hills) then we’re ALL in the danger zone.
Here’s a really smart idea- Go into a forest w/ a thousand years of fire history. Build a house out of wood. Fill it with your most treasured and valuable items. When it inevitably burns up- cry like a big baby and expect everybody else to replace all your stuff. Better yet get the government to make them do it.