The homeowners insurance market in wildfire-prone regions of California, Oregon, and Colorado continues to deteriorate as three more carriers have announced plans to reduce their exposure in high-risk zones. State Farm, Allstate, and Farmers Insurance have collectively non-renewed over 180,000 policies in wildfire interface areas since January, leaving affected homeowners scrambling for alternatives.
State insurance commissioners are meeting this week in Sacramento to discuss coordinated responses to the coverage gap. California's FAIR Plan, the insurer of last resort, has seen its policy count swell to over 400,000, raising concerns about its financial stability in the event of a catastrophic wildfire season. Commissioner Ricardo Lara has proposed regulatory reforms that would allow insurers to use forward-looking catastrophe models in their rate filings.
Homeowner advocacy groups are pushing for legislative solutions, including a proposed federal wildfire insurance backstop modeled on the National Flood Insurance Program. Real estate professionals warn that the insurance crisis is already depressing property values in some mountain communities by as much as 15%.
