Wildfires are blazing throughout the state of California, with more than 10,000 people under mandatory evacuation as their homes remain under threat. But, as firefighters work on the containment of at least 11 wildfires that continue to burn throughout the state, the California Department of Insurance is already warning homeowners about the insurance headaches they will likely face, even for those whose homes weren’t affected in the latest fires. The increasing number and severity of wildfires will likely make it more difficult for homeowners in the state to find and hold on to insurance, the California Department of Insurance warns.
California Insurance Commissioner, David Jones, told the Associated Press that more insurance companies may choose not to renew policies, or may stop writing homeowners policies in areas with the highest fire risk. He also says homeowners in the state should be prepared to face rate increases. Also, some portions of the state may be reclassified from safe to high-risk for wildfires that could raise costs for homeowners in those areas.
In 24 California counties with the highest fire risk, the number of non-renewals from homeowners insurance rose 15 percent from 2015 to 2016, according to the Department of Insurance. In 2016, insurers dropped more than 10,000 policies in those high-risk counties. For homeowners who are dropped, they’ll likely pay more and go through nontraditional channels, such as surplus lines or California’s FAIR plan, which often provides only basic coverage.
“More and more homeowners who cannot afford insurance may decide to go uninsured, risking their life savings and ultimately seeking relief from federal and state governments,” warns a Department of Insurance report. Wildfires were blamed for causing about $12 billion in insurance claims last year, the highest ever on record. This year, that number will likely be higher, state officials caution.
An estimated 3.6 million homes in California are located in a “wildfire urban interface,” one million of which are categorized “high” or “very high” for risk of fire. This has caused many Californians to examine the benefits of moving out of the state. There are many cities commutable to California airports that offer lower taxes, more affordable housing and reasonable homeowners insurance.
Aviation Relocation offers a loan program specifically designed for pilots and other aviation professionals which allows you to apply for the loan based on estimated future income. You are able to buy your new home up to 90 days prior to your contracted future pay increase. We have affiliates in all 50 states to assist you with your home buying and selling processes.