Intense wildfires destroying homes and other structures across the state have led several insurers to pull out of California. APInsurance companies are refusing to sell new homeowner policies or renew many customers, driving more San Diego homeowners into the high-cost, low-benefit FAIR Plan, a pool of insurers providing last-resort coverage.
And insurance companies have been approved for big double digit rate increases recently from the California Department Insurance. State Farm received an average over the last 20 years and been far greater in California than their national profit, by every measure, in each of the last four years.First, what has some insurance companies spooked is greater exposure through the Fair Access to Insurance Requirements, or FAIR Plan, which increasingly covers expensive homes in wildfire-prone areas.
Second, the current crisis was caused not so much by wildfires as by investment losses in 2022 and rising construction costs. Insurers responded by tightening underwriting and raising rates.