California homeowners are facing a problem few ever expect: they can’t get insurance on their houses at all, or what’s on the market is too high-priced to afford.
This reality has come home to families like the Daneaus. Their house was burned to the ground in a 2018 wildfire, and they were thankful for the insurance money that allowed them to rebuild their home and their lives. But this year, lightning struck twice. Another wildfire took the Daneau’s new home, but this time there was no payout for them as the family did not have insurance at all.
Why? They couldn’t afford it in a state that is watching insurance companies pull out entirely. The seven largest insurers in the state have either left or refuse to write new policies, as the business has become less profitable in a state with increasingly out-of-control wildfires. The company also says the state’s regulations add to the cost, making it impossible for the companies to offer affordable insurance to homeowners while also making a profit.
This year’s “Park Fire” burned 400,000 acres and destroyed 600 buildings in July. It took firefighters the entire month to contain the blaze. The Daneaus’ second home was one of the buildings burned. They had bought it with the money from the insurance payout on their 2018 fire, but no insurance companies would sell them a policy for their new house.
So the family signed up for the state’s FAIR program, which is a plan that gives homeowners’ insurance to those with houses deemed to be at high risk of natural disaster. But the Daneau family said the premiums jumped into the tens of thousands of dollars annually, which they just could not afford. So they took the chance of living without coverage, and now they’re left with nothing.
Micheal Daneau said the family would not ordinarily have gone without insurance, that “we knew how important it was.” But they simply could not afford it.
As wildfires have grown more severe recently, insurance companies either have to raise their rates or stop doing business. California’s insurance commissioner recognizes the problem and says the state’s program needs “major reform,” but that will come too late for families like the Daneaus.
