MALIBU, Calif. — Renewal is something the Kronman family, longtime Malibu residents, has been cultivating for the past six years.
“We were able to take some of these palm trees home,” says Richard Kronman, walking through his newly renovated garden and home, whose foundations were destroyed in the 2018 Woolsey Fire.
What you need to know about California Liberty Mutual’s 17,000 customers were told in August that their home insurance policies would not be renewed.
State Farm announced earlier this year that it would not renew insurance policies for 30,000 California homeowners due to fire risks.
In August, Allstate received approval from the state of California to raise interest rates by up to 34%. This will continue to underwrite insurance contracts and expand insurance coverage.
They rebuild from the ashes, but just when you think the story is over, a new front begins. “We’re now fighting our next battle with insurance companies,” Kronman said.
After multiple 30% rate hikes, the Kronmans were told in September that their homeowner’s insurance policy would not be renewed due to fire risk. Kronman said the problem is widespread: “They’re experiencing problems in Northern California, they’re experiencing problems in Santa Barbara, they’re probably experiencing problems in San Diego. So it’s not just us.”
Tens of thousands of Californians have lost their homeowners insurance this year alone as other insurance companies have left the state altogether, leaving residents with fewer options.
“Basically, the FAIR program is the only game in the game right now,” Kronman said.
The FAIR plan, a syndicated insurance pool of California insurance companies, offers limited coverage and often leaves residents underinsured, sometimes costing millions of dollars. .
But it’s not just residents who are suffering big losses, but insurance companies as well, bound by regulations that limit the use of historical data to assess fire risk, South said. Matthew Kahn, a professor of economics at the University of California, said.
“What these climate modelers and this is both an art and a science, these people are saying is, if California is going to get hotter and drier because of climate change, then by now A never-before-seen event is possible, and in that case, insurance companies say, ‘If you write a policy cheaply because you used historical data, you’re going to lose a lot of money,”’ Khan said. I say.
Michael Soler, deputy insurance commissioner at the California Department of Insurance, wants to change that.
“One of the big changes proposed by the Lara Commission is to allow forward-looking models, actually computer models that use multiple variables, to include wildfire safety,” Soler said. “So where people are fortifying their homes, where fire departments are taking fuel breaks, where utility companies are investing in safer lines, all of those things need to be counted in wildfire models. This is a significant change and we believe premium rates will be more stable in the future.”
Not everyone thinks changing the rules is a good idea.
Consumer watchdog groups say the model is unclear and could lead to further rate hikes without a commitment to take on more new policies.
Insurers argue the change is necessary to write more insurance in the state.
Meanwhile, the clock is ticking for the Kronman family. Their policy expires in a few weeks.
