As wildfires of record magnitude swept through Northern California last week, destroying thousands of homes and other structures, the Legislature closed its 2020 session without doing something about the fire insurance crisis that afflicts fire-prone areas.
It ranks near the top of a long list of legislative failures this year, right up there with housing shortages and police reforms.
Insurers have sustained massive losses, tens of billions of dollars, from wildfires in recent years and are increasingly reluctant to continue coverage in fire-prone communities, even threatening to quit the market if they cannot increase premiums enough to cover projected future liabilities.
The ultimate solution would be to stop building and rebuilding homes in the “wildland-urban interface” — essentially the outer suburbs of major metropolitan areas – where the risk of catastrophic losses is highest. However, for the foreseeable future, much of California’s population will continue to live in those communities, such as Sonoma and Napa counties, the Sierra foothills and the mountain ranges ringing Los Angeles.
We need a new approach. A truly comprehensive solution would be layers of coverage, beginning with a basic statewide policy financed by mandatory fees on all residential property, adjusted by region.