If we were a culture that took climate change seriously, the tenor of this article would be completely reversed. As written, the article suggests that it is a problem that the high cost of insurance is preventing people from moving to high fire risk areas. Thus:
The refusal of insurance companies to cover homes in fire-prone areas is prompting home buyers to cancel purchases and look elsewhere.
That’s depriving struggling rural areas of one of their most reliable sources of economic oxygen — the steady influx of well-off retirees and other transplants from Sacramento, the Bay Area and other prosperous areas.
“It’s another … hardship that’s hit because of the wildfire issue,” said economist Jeff Michael of the University of the Pacific. “We tend to see lower incomes in those areas. People are attracted to them by the housing affordability and rising insurance costs put a real dent in that.”
Pounded by two straight years of catastrophic wildfires, insurers are raising rates, abandoning long-standing customers and refusing to write new policies. Many homeowners are forced to purchase from unregulated “surplus” carriers or the California FAIR Plan, a bare-bones policy that acts as the state’s insurer of last resort. The resulting coverage can cost up to triple what a traditional carrier would charge. Some desperate homeowners are getting quotes of up to $10,000 a year.
Realtors said this translates into lost business. Home buyers give up on purchases, or their lenders scuttle the deal because the borrowers no longer qualify for their loan.
Every single person who does not move into a high fire risk area is a success story. (Also true for floodplains, also true for water short areas.) It is a shame that the State does not have vigorous policies to keep people from moving into fire’s way, but if the same goal is being achieved by insurance companies accurately passing the cost of increasing risk onto those households, well, at least that’s a start.
In a culture that were genuinely afraid of the climate crisis, the same article would have my headline, a quote from a local fire chief who is pleased that he won’t have to defend some rural cabins, and quote from someone who lost their house to wildfire last year and wishes they hadn’t bought. There would be more from insurance executives, explaining how they priced the risk and how it is unfair to compel Californians as a whole to subsidize that risk pool.
The phenomenon that this article describes, that people are becoming aware of the magnitude of the risk (translated through money in an insurance bill) and hence, not moving themselves to the risk is a good thing. After a few more fire seasons, it’ll be reported that way.
So long as I’m talking to reporters, I’ll add that people who lived through foreseeable natural disasters shouldn’t be labeled “survivors” any more. It glorifies them and sets the stage for rebuilding in place. After all, that label makes them, by nature, someone who survives stuff. A better term for them would be “escapers.” “Escapers, this time”, would be even better.
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This, from the same article:
Meanwhile, the inventory of unsold housing is piling up in the foothills. Janice Wechsler, an agent with Coldwell Banker Residential Brokerage in the rugged Foresthill area of Placer County, said the problem is worsening as homeowners, irate over rising insurance premiums, seek to get out. She’s hearing of longtime residents of the area looking at moving to Nevada, Oregon and Idaho.
“They’re being canceled, they’re watching their rates tripling or quadrupling,” Wechsler said. “It becomes the proverbial straw. They say, ‘I’ve had enough of this.’”
is fucking nuts. There is no appreciable difference in fire risk between where they live and their destination. They’ll just be underinsured when the fire comes.
On the public record 
Well said
Not sure there’s much direct benefit from keeping current owners in place instead of being bought out by new ones. It will probably discourage new construction in those areas, though, which will be good.
So the insurance companies are accomplishing what our state and local governments can’t or won’t through responsible land use planning and regulations. It seems kind of sad and ironic, but it’s all to the good to the extent that it works.
Which is nicely summarized by your headline.
It’s interesting that the historically conservative insurance industry is acknowledging climate change – because they have to. It affects their bottom line.
The reporter fell short here. He should have called a few insurance companies in Nevada, Idaho or Oregon. He probably would have found out that it’s just as expensive there, I would think. If the risk is the same, they’re going to charge the same premiums.
I wonder what is going on with insurance rates for people who want to rebuild homes and businesses in Paradise. If insurance is unavailable or prohibitively expensive there it may be a warning for the rest of the “urban-wildland interface”.
Several years ago I watched some dimwit on TV following the latest LA area fire blithely announce that “This is our third fire and we plan to build again!”
From the dept of fine print: Running through the index of the 4th state climate change assessment, ran across this: The Impact of Changing Wildfire Risk on California’s Residential Insurance Market. California’s Fourth Climate Change Assessment https://pdfs.semanticscholar.org/53eb/e447afc72b6dec3d971e0f343e2b08c27dff.pdf?_ga=2.268365838.1458474108.1564944717-1184417205.1564944717
Was also interested to see Paradise fire covered at length by CA Sunday Mag and NYT. Arax piece v good.
What is wrong with having a little sympathy for the homeowners who did the same thing the insurance companies and governments did years ago – underestimate the long-run risk of living in these locations. Now that the risk is better known, the insurance companies can just drop the policies and walk away. It’s not so easy for the average homeowners in this area that have most of their wealth in the value of these homes – and would face large financial and personal costs to move – not to mention the communities built around lots of households in similar circumstances.
The biggest difference between the homeowner and the insurance company is that it is much easier for the company to walk away from their mistaken risk calculation. The insurance companies should have been better informed. It is their business after all. Your suggested interview with the insurance executive might also ask them why it is OK for them to suddenly walk away from a family after they facilitated their move and mortgage with a low-cost policy. I am not advocating subsidies for high-risk choices in an era of climate change or making insurance companies into villains. But I disagree with praising companies for bailing out, while having no sympathy for the homeowners.
The situation somewhat reminds me of the foreclosure/housing crisis. The market was totally breaking down and in chaos, the result of a lot of risky loans/decisions that should never have been made. Short-run government intervention made sense to reduce foreclosures and help stabilize the situation. In this case, I also think some short-run actions to slow the wave of non-renewals and smooth the transition to a more stable (and higher cost) insurance market is warranted.
I don’t think the tone of the article is bad, it is educating the public about a risk and surely reduces demand for property in these areas. It is definitely a step towards your goal of reducing population in these high-risk areas. Kasler and Sabalow should be praised for this reporting as their work is substantially more accurate and detailed than most other articles I have seen on this topic.
Thanks for this fantastic and thoughtful comment.