Due to the continuing wildfires, drought conditions, and hurricane-force winds hitting Southern California, many local homeowners are finding their fire, flood and home insurance policies not being renewed or offered at highly increased costs.
It is reported that in the Pine Cove community above Idyllwild, fire insurance, through many of the home insurance companies like State Farm, are not being renewed because it is an area designated as an extremely high risk for wildfires.
Even though the area homeowners have taken every precaution to make their homes fire safe the policies are not being renewed. The state does offer the FAIR fire insurance plan to those who have not been able to renew their regular policies but at a very high cost.
Giving a closer look at the recent increase in the natural catastrophes that have hit our nation and the world in the last decade, many world governments have seen the cause relating to climate change.
One group, Covering Climate Now, made up of journalists across the world, provides webinars and discussions on the potential of climate change on the human population. The latest webinar entitled “Is Insurance the Next Big Climate Story,” was presented last week.
One of the panelists, Dave Jones, a California Insurance Commissioner, Emeritus, and Director of the Climate Risk Initiative gave some insight into the fire and flood insurance dilemma not only facing California but other states as well. Too many residents now seeing increases in their home insurance or nonrenewals, still, see some relief in the California FAIR and other state-backed insurance plans, but in the long term, the effects may be much higher costs in home insurance and the possibility of reduction in the state insurance plan offerings.
Jones said, while the state-backed plans (Now 8 or 9 million dollars) will most likely face overwhelming deficits, they will still remain and not go bankrupt, because of “re-insurance companies” which are mostly located in other countries.
Americans can be assured that their rates will be increased by those foreign re-insurance companies who will increase their premiums to the countries with the most natural disasters. Jones said this is a fact that many in our nation do not know.
Added living costs
In addition to the potential rising cost of insurance, other prices are likely to significantly increase as the climate continues to change, according to other economists and consumer journalists.
Recently Anita Chabria, a real estate reporter for the Los AngelesTimes in a recent column, said that the unfortunate victims of the recent Los Angeles wildfires who lost their homes may be looking at a much higher cost to rebuild their homes. The cost to rebuild a lost million-dollar home in the Palisades Fire, as one example, will almost be prohibitive even after receiving insurance recovery or FEMA monies. She said the wealthier residents will be able to afford the added costs, but those with lower incomes will not be able to afford to rebuild in the same area.
Those homeowners, unable to rebuild where they want, will have to look elsewhere to find future or temporary housing in rental homes or apartments. Those costs will increase significantly due to the higher demand, in already high rental prices in California.
Then, again residents looking to purchase a new home will find the cost of mortgages will be continuously increasing even with inflation dropping. This is because new homeowners must have insurance coverage on their new home if they take out a mortgage which may not be readily available, except through the state or government, and then at much higher costs. Already the state is seeing a rise in mortgage defaults because of the higher rates.
Who may be responsible?
No matter if a person believes in climate change or not, costs for housing, transportation and general living will increase, let alone the costs of health care due to the continuing natural disasters and man-made disasters now occurring worldwide.
Jones, as one authority says: Contact your state insurance commissioner’s office to learn how to decrease those rising rates and to demand the state legislatures take action to make it possible. Contact your insurance company to demand they give you credit on your insurance policies for your efforts in making your home more fireproof and fire-defensible (Fire Safe) in fire-prone areas. Do the same by contacting your city or county government demanding they take action to have the insurance companies give you that credit.
Demand that fossil fuel companies like EXXON and Mobile make every effort to cut or reduce the harmful particulates that are speeding up climate change and they are partially responsible.
As an individual do all you can to reduce those particulates through less use of fossil fuels, aerosols and by reducing your food waste along with demanding the proper management of forest floors and the preservation of our forests and jungles across the world.
Tony Ault can be reached at tault@reedermedia.com.
