An Insurance Journalist’s Perspective on Southern California’a Wildfires

PART ONE OF A TWO-PART SERIES

At 4:58 a.m. on Jan. 8, the Watch Duty app buzzed: Evacuate.

By Russ Banham

It was pitch black in the house and the power was off. The Santa Ana winds were howling. As planned, my wife, Jenny, gathered our two dogs and cat and scurried them into her car as I shuttled our important documents, medications, pet food, cash, and clothes into mine. The bright orange sky illuminated our neighbors quietly performing the same choreography.

To the east burned the Eaton Fire, to the west burned the Palisades Fire, and to the north were the San Gabriel Mountains, where the Lidia and Hurst Fires were looming. The cityis air raid sirens suddenly blaredothe first time weid ever heard them or knew of their existence. No one panicked and, in a queue, the residents of La Ca”ada Flintridge, where we live three miles due west of Altadena, slalomed past broken tree limbs in the street, driving the only direction we could: southward.

The next four days were torture as we followed the fluctuating reports on what had become a hellscape across Los Angeles County. Armageddon was Jan. 9, when six wildfires simultaneously raged across Los Angeles County. Over the next two weeks, 14 destructive wildfires in all affected the entire region. The winds blew southwest for the most part, jeopardizing parts of Pasadena and Glendale. If the wind turned westward for a sustained period of time, La Ca”ada Flintridge, one of 50 Tree Cities USA, could easily ignite.

We set up house in a La Quinta Inn that took in pets in a small city called Hawaiian Gardens, a municipality named not for tropical splendor but a decades-old casino. Dozens of fellow evacuees crowded the hotel. Those who had lost their homes to the Eaton Fire or the Palisades Fire surrounded the outdoor ashtrays, smoking possibly for the first time in years and talking obsessively on their cellphones with family, friends, and insurance agents. I didnit want to call our independent agent until we had a reason. I later learned that more than a hundred of her clientsi homes were destroyed.

The first day, we watched television broadcasts of the wildfires. All was doom and gloom. The lowest point was when a reporter shoved a microphone into the faces of an elderly couple standing outside the charred remains of their home. ìHow are you holding up? What are your plans?î the reporter intruded. I turned off the TV.

Hope was offered by a single neighbor who defied the mandatory evacuation order and texted me about the local fire conditions and prospects. For her privacy, I will call her Catherine.

Catherine was plugged into a network of friends at city agencies and officials and had previously disregarded a mandatory evacuation during the devastating 2010 Station Fire. She owns the most fire-resistant house on the block, with a metal roof, cement composite siding, steel fencing, defensible space, and a pool with a pump and a generator.

When I tell people this story, they imagine some crazy person with a garden hose on the roof. But Catherine is no fool. ìWhen I evacuate, thatis when we all need to worry,î she texted me.

We returned to our home the day after the evacuation order in our part of the city was lifted on Jan. 10. There was no power, and the house was freezing. The winds were significantly calmer, with just enough gust to blow off the ash blanketing the house. Workers dispatched by the city already were tossing debris from century-old cedar trees into woodchippers. Trees that had fallen and were circled with yellow tape disappeared within days.

On Jan. 31, after burning for 24 days, the Eaton Fire was finally contained.

Risk and Insurance

Life went on, but we were changed. The terror of the evacuation merged with our survivoris guilt of having escaped the worst. Three people we know had lost their homes and possessions in Altadena and Malibu. Our texts to them were brief, expressing our sincere concerns and offers of support. Jenny donated to their respective GoFundMe campaigns. It was the least we could do.

In the aftermath of the devastation, having presciently written about the risk of fire to our home for Carrier Management in August 2023, I emailed several insurers, agents, state insurance regulators, trade groups, consumer groups, and the Insurance Institute for Business and Home Safety (IBHS) to discuss the wildfiresi impact on the industry and policyholders. Selfishly, I also wanted to know what we could do to fortify our home in preparation for the next wildfire.

Jenny and I are among the 451,000 California residents whose homeowners insurance is provided by the stateis FAIR Plan. In 2020, fewer than half that number were in the plan. According to the most recent figures, more than 4,500 homeowners filed insurance claims with the plan after the recent wildfires. Due to an estimated $4 billion in losses from the Eaton and Palisades fires, the state insurance department has approved a $1 billion levy on the planis member insurers.

Prior to a new insurance regulation that took effect before the wildfires, carriers recouped the cost of paying the assessments by raising premiums. The current regulation requires insurance customers to bear 50% of the assessment via a temporary fee added to their insurance premium. At present, the average annual cost of home dwelling coverage in the FAIR Plan is $3,200. We pay more than $4,000. Tacking on another 50% will lift our premium to over $6,000.

Although consumer groups have threatened to sue the state over the matter, the bottom line is clear: Homeowners insurance will cost a lot more in California. New state regulations permitting insurers to use wildfire catastrophe models in setting their rates and to treat reinsurance like other carrier expenses are expected to result in more accurate rates going forward. In return, carriers must increase the number of property insurance policies in wildfire-prone regions in California by 5% every two years, until attaining the equivalent of 85% of their statewide market share. As this occurs, we and other homeowners may be able to exit the FAIR Plan.

Our immediate concerns are less about insurance and more about the future risk of our house burning down. In California, wildfires are nothing new. Alternating periods of drought and substantial rainfalloa causal factor in wildfiresoare nothing new. Climate change has increased wildfire frequency and severity in recent times, but the trigger in most cases is pulled by people. Lightning did not cause the Eaton and Palisades fires. Possible ignition sources include fireworks, faulty electric transmission lines, the reignition of a previous small fire, and a homeless encampment (the assertion of the regionis major electric utility).

Wildfires in the pre-European settlement period were common occurrences. Aware of the hazard, Indigenous peoples settled away from the hillsides and in the prairies. To reduce the brush, they set small fires that limited the potential for an inferno. The difference between then and now is the regionis development. In the 1920s, the population of Los Angeles County was under one million; last year, it topped 9.6 million. People come here because the weather is sublime, the city is a global entertainment capital, job opportunities are plentiful, and access to the outdoors is unlimited.

Homes like ours built 75 years ago in what is now called the wildland-urban interface offered people in the 1950s a rural-like experience surrounded by nature, yet only a few minutes by car to museums, theaters, and other big city charms. Much of La Ca”ada Flintridge was constructed in the 1920s, well before Los Angeles County strengthened the building codes following the Bel-Air Fire of 1961. That wildfire burned more than 6,000 acres and destroyed 484 homes. Like the Palisades Fire, many houses were owned by celebrities. The cause of the fire has never been determined but is believed to be accidentaloin a word, us.

ëArmageddon was Jan. 9, when six wildfires simultaneously raged across Los Angeles County. Over the next two weeks, 14 destructive wildfires in all affected the entire region.i

Los Angeles is a sprawling county of valleys surrounded by hills and mountains. Drive more than a couple miles and the highlands ariseothe Santa Monica Mountains, San Gabriel Mountains, and Verdugo Mountains, as well as the San Rafael Hills, Simi Hills, South Hills, Baldwin Hills, and San Jose Hills. Places are named Hollywood Hills, Beverly Hills, and Pacific Palisades for a reason.

Since embers the size of a fist can fly one mile per minute in the Santa Ana winds, hundreds of thousands of houses and other structures in Los Angeles County are susceptible to a wildfire. Gusts exceeding 70 mph and 80 mph, respectively, were recorded in the Eaton Fire and Palisades fire, but even that is nothing new. In January 1984, the Santa Ana winds clocked in at 100 mph as a fire swept through parts of La Ca”ada Flintridge, destroying 10 homes.

In the pre-settlement period, wildfires that erupted in the foothills consumed fallen trees and parched shrubs and bushes called chaparral. Once burned, scant fuel remained for the fire to grow in size and intensity. The density of todayis building stockoour homes and everything inside and outside themoprovides abundant fuel assuring ever larger, more powerful and longer-lasting conflagrations.

Flight or Fight

Thereis nothing homeowners across Los Angeles County can do in the near term about climate change, the ferocity of the Santa Ana winds, or the areais population boom. What we can do is decrease the risk of our homes burning in a wildfire. When confronted with danger, humans resort to the fight or flight response. We love it here and are not leaving. We decided to fight.

Following several discussions with our insurance agent and investment adviser, Jenny and I decided to take out a home equity line of credit to fortify our house to withstand fire-related damage. IBHS was enormously helpful. I was put in touch with Dr. Ian Giammanco, the instituteis lead meteorologist. He said we were lucky to have a Class A fire-rated roof and a garden of mostly fire-resistant shrubs surrounded by defensible space. Unfortunately, the luck ended there. Among our biggest fire risks were the legacy windows, fences, gates, and siding of the 75-year-old house, all made of combustible wood.

Most of the money pulled from the HELOC is earmarked for 19 new windows and three sets of French doors with double-paned, tempered glass framed in fire-resistant composites. Additional capital has been allocated to install fire-rated corrugated steel panels and posts as perimeter fences and gates. Initially, we intended to envelop the house in fire-rated Hardie Board siding made from cement, sand, and cellulose fibers, but the cost was beyond our means. An alternative is Class A fire-rated intumescent paint, a coating that expands up to 100 times its thickness when exposed to heat, forming a char barrier insulating the underlying wood from fire.

Dr. Giammanco identified the close proximity of our house to our neighborsi homes as the ìweakest linkî in our risk mitigation plans. The neighborsi garages flank our home and are used for storage. The structures are scant inches within the 5-foot noncombustible zone to meet IBHSis Wildfire Prepared Home mitigation requirements. The fence contractor will install fire-resistant corrugated steel panels serving as barriers between our home and the bordering structures.

The vents in the eaves of the house were also identified as a fire hazard. The screening material does not conform to current building codes, an inexpensive repair requiring the installation of new fire-safe venting.

Last but not least, we may mount a sprinkler system on top of the house that draws water from our pool via a pump attached to a gas-powered generator. A couple posts on Instagram showed houses with sprinklers that survived the recent fires intact. I asked Dr. Giammanco for his opinion.

ìIt concerns us since there is no performance standard for commercial sprinkler systems regarding how they should perform,î he said. ìWithout such standards, people may place too much confidence in them, investing in sprinklers instead of the risk mitigations we know to work.î

Weill cross that bridge when we get there.

All Together Now

Friends think we are pursuing these expensive renovations to be able to exit the FAIR Plan and find more affordable insurance. That would be nice, but the truth is I keep thinking about wildfires. Iive been having trouble sleeping, worried first that our house was destined to burn to the ground and then, when it miraculously didnit, focusing on how to never let that happen. As I began paying contractors tens of thousands of dollars to increase our chances, I fretted that it might all go to waste. The house could still go up in flames.

One afternoon in our early fire-mitigation research period, Jenny and I went to a century-old lumberyard in Pasadena known for exemplary customer service. I recognized a young man who had helped me previously. As we traveled through the lumberyard looking at different fire-resistant composites, I inquired where he lived. He paused, as if in thought. ìAltadena,î he softly replied. He confided that he and his wife, also named Jenny, had lost their house in the Eaton Fire.

As the three of us continued chatting, he mentioned that his wife was having trouble dealing with what happened. They were staying at a friendis house when she decided she needed to get as far away as possible. She drove with their pets to her motheris house for the time being. He stayed to hold onto his job.

The terrible irony struck me that he was helping us research fire-resistant composites to avoid the horrific fate that befell his family. I lost it. It had been building up inside me for weeks. So many peopleotens of thousandsohad it far worse than we did. My eyes instantly welled with tears, and I had trouble catching my breath. My emotions embarrassed me, but he gestured that it was OK. Like guys do these days, we hugged. Jenny asked if he and his wife had a GoFundMe campaign. Back in the car, we donated what we could.

This article was first published in March 2025 by Carrier Management, a sister publication to Insurance Journal. In Part Two, Banham interviews Californiais former insurance commissioner on the critical importance of building fire-safe houses in fire-prone regions, and his independent insurance agent, who reveals the emotional cost of being the first person called by policyholders whoive just lost their homes and possessions to fire. He introduces the folly of ìgoing bareî in a state where 10.5% of homeowners are uninsured. Several of Banhamis neighbors who have experienced two and three mandatory evacuations also provide ideas on how insurance carriers can improve their standing with customers.

Banham is a veteran insurance reporter, business journalist and best-selling author.

Topics
Catastrophe
Natural Disasters
California
Wildfire