Tag: california wildfires

In San Mateo County, leaders have asked Gov. Gavin Newsom to declare a state of emergency over the home insurance crisis as homeowners scramble to find solutions. 

In a remote part of the county, there’s a good chance you’ll find Patricia O’Coffey outside her home, working hard on a number of tasks to ensure it has enough defensible space.

“It is getting harder each year. It’s true of this whole community. A lot of us moved out here when we were much younger,” she said.

Keeping her home as fire-safe as possible is a routine task for her. But it’s not the threat of fire that causes her constant anxiety.

“We’re not going to renew you,” she said.

Those are the words she heard back in 2019 from her longtime insurance provider.

“We’d been with Allstate for 40 years – this house, a prior house, and all of our vehicles and homes. And just two weeks before it was time to pay the renewal, we get the letter saying they’re not going to renew us. No reason given. Just, ‘We’re not going to renew you,’” O’Coffey said. “I mean, when we got cancelled by Allstate, we were paying less than $4,000, I believe. And it went up to $20,000.”

She ultimately was able to get a new plan with State Farm, with a premium of around $6,000. But now, with insurers including State Farm leaving California, and others raising premiums sky high and limiting coverage, O’Coffey is nervous she will once again get dropped.

“Thousands of people are losing their insurance on a regular basis,” she said. “It’s very unnerving. You just never know. If you have a mortgage, you’ve got to have insurance.”

It’s not just people who live in some of the more fire-prone parts of the county and state that are at risk of losing their policies, or have already had their policies cancelled.

“People are facing this problem and they’re facing it every day,” said San Mateo County Supervisor Ray Mueller. “We need help.”

He says he routinely hears from people who live in his district who are experiencing the fallout of the insurance crisis.

“I just want to figure out how we can go ahead and bring resources to help them,” he said.

That’s why he and the San Mateo County Board of Supervisors joined the growing list of California counties to urge Governor Newsom to declare a state of emergency for California’s insurance crisis.

“Right now, we have an emergency taking place. It may not be visible to the eye, but people in our district are experiencing it every single day,” he said. “It allows the state to actually bypass the rulemaking process and go ahead and start implementing actions right now and requirements on the insurance market. That’s what we really need.”

Since 2022, seven of the top 12 insurance companies operating in California have either cut existing policies or stopped writing new ones, according to the Department of Insurance.

The Department is working on implementing a plan that it believes will expand coverage and bring insurance companies back to California. However, Mueller says there needs to be a solution sooner.

“What is happening right now, the state has embarked on a process through the Department of Insurance to address this crisis. But, the implementation of what comes out of that isn’t really set to take effect until 2026, which is far too off in the future,” he said. “If people have to wait until 2026, what it means is I’m going to have residents in my district who have to go without insurance.”

O’Coffey says she can understand why insurance companies are raising rates, to a degree. The climate is changing. Wildfires have ravaged California in recent years. However, she says the status quo is not acceptable.

Over the course of her 30 years living in the mountains, she says there have been two fires. She says the CZU division of Cal Fire made residents change their approaches to taking care of their properties.

“It did wake everybody up. Most people were not into home hardening and defensible space before that. They are now,” she said.

Her community has since taken major proactive steps to become a nationally recognized fire-wise community as well.

“It feels like the insurance companies are making these arbitrary decisions not based on the facts of the real situation on the ground,” she said. “They’re not going to come out here and inspect my property before they decide to renew me or cancel me.”

Worst case scenario, she’ll have to leave the place she never planned on leaving – something many people facing this threat may also be considering.

“If they can’t get insurance, they’re going to leave California. That affects the economy of California and our future,” she said.

The insurance issue is also having a significant impact on home sales. In a new survey by the California Association of Realtors,
13% of realtors, or one in seven, reported a sale falling out of escrow because the buyer couldn’t find insurance.

That number nearly doubled year-over-year. It’s gotten so bad that this past summer, the Association added a contingency to home sales that lets the buyer bail out of the contract if they aren’t satisfied with the insurance options available.