As the world gets hotter because of human-caused air pollution, disasters are becoming more frequent and severe, including wildfires. California has been hard-hit in that regard, with the recent Los Angeles fires as a particularly devastating example. 

Unfortunately, insurers are pulling out of California, ending home insurance policies that have been in place for years or even decades — and the options for homeowners are much more expensive, The Tribune reported.

What’s happening?

The Tribune interviewed two homeowners in San Luis Obispo County, Michele Flom and George Hanna. Both lost their insurance in 2024 — Flom twice. They had to take out more expensive policies.

“I was just shocked,” said Hanna. 

They aren’t alone. Between 2021 and 2024, the Insurance Information Institute found that the average cost of a home insurance premium in California rose from $1,475 to about $1,750, the Tribune reported. More homeowners are turning from the major admitted insurance carriers — which are backed by the California Department of Insurance but are withdrawing coverage — and turning to non-admitted carriers, which tolerate greater risk but charge more.

Some residents even have to resort to the FAIR Plan, run by the state. It will insure homes that other insurance carriers won’t touch, but the cost is high — and if it has to pay out too many claims, the cost will be assessed against the insurance companies again, which will pass part of the fee on to customers.

Why are departing insurance companies important?

As options are getting thinner on the ground, homeowners in California — and across the country — are having to scramble to find coverage after being dropped from their plans. Costs are increasing and, in some cases, pricing owners out, which jeopardizes mortgages where carrying insurance is a condition of the loan. It also puts people’s homes, often their most valuable property, at risk in case there is a fire.

“We have to have insurance — this is our nest egg,” Flom said, per the Tribune. “This is the only investment that we have, so it was a scramble.”

What can I do to protect my coverage?

If you have a home in an area at risk of fires, taking steps to mitigate your risk could help you convince your insurer to maintain your policy. It can even get you discounts.

Start with a Class A fire-resistant roof, per the Tribune. Clear a 5-foot-wide zone around your home of anything flammable, including branches, grass, plants, and mulch. Get your home certified as “wildfire prepared” by the Insurance Institute for Business and Home Safety. Not only will these steps protect you financially, but they could be the difference between your house burning down and surviving a fire.

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