California Blocks Insurance Companies From Withdrawing From Fire Zones For Another Year
As California reels from this year’s record wildfires, the state announced on Thursday that it would prevent insurance companies from dropping homeowners for one year in many parts of the state, a sign of the growing financial turmoil caused by climate change. The measure, which applies to almost one-fifth of the state’s residential insurance market, prohibits companies from canceling or refusing to renew insurance policies for 2.1 million households in or near areas hit by this year’s wildfires.
The announcement reflects the increasing strain that climate change has placed on California, which had imposed a similar moratorium once before, at a smaller scale. As rising temperatures and longer droughts make wildfires more devastating, some insurers have responded to enormous financial losses by leaving fire-prone communities. That threatens the economies of those areas, because homes that can’t easily be insured are harder to sell, and nearly impossible to rebuild after a fire.
California’s struggles are a preview of the threat that climate change poses to the long-term economic health of communities around the country. Insurers have begun pulling back from fire-prone areas in other states across the West. And in communities near oceans or rivers, the increasing cost of flood insurance poses a similar risk, driving down home values and make them harder to sell.
In response to growing climate risks, state officials have intervened to stop insurers from leaving high-risk areas. In December, California’s insurance commissioner, Ricardo Lara, for the first time imposed a similar one-year moratorium on insurers dropping coverage for more than 1 million policyholders in or near areas affected by wildfires.
EDIT
https://www.nytimes.com/2020/11/05/climate/california-wildfire-insurance.html