Leslie Kaufman, Saijel Kishan, and Nadia Lopez of Bloomberg tell their readers about a hidden housing crisis in the making. In places most prone to wildfires and hurricanes, state “insurers of last resort” are absorbing trillions of dollars in risk. They write:
In places most prone to wildfires and hurricanes, state “insurers of last resort” are absorbing trillions of dollars in risk.
It is so easy to start a wildfire. A smoldering campfire, a lightning strike, an errant firework or a spark from a power line or a hot muffler: However California’s next monumental blaze begins, the toll will be vast. People will be injured, some will die. Thousands of homes will be destroyed.
When the smoke clears, the most populous US state, home to Hollywood, Silicon Valley and a real estate market worth more than $9 trillion, will be ground zero for a sweeping financial crisis.
Some 11 million people live in California’s high-risk wildfire zones, areas that include Los Angeles county, San Diego and the vineyards of Napa and Sonoma. Not long ago, they and homeowners in natural disaster regions around the US would have almost certainly had insurance through a big, national company like State Farm General Insurance Co., Allstate Corp. or Hartford Financial Services Group Inc. […]
Those who remain call Dahle’s office to say they can’t find insurance or are paying premiums higher than their mortgages, even after “fire-proofing” their properties. He’s a strong advocate of home hardening and has backed several bills designed to decrease the risks to his constituents and provide some measures of relief.
Ultimately, though, he says, this is the insurance commissioner’s problem to fix. “I don’t know what the future holds,” he said. “I know one thing: There’s some things we can do and some things we just have to just pray about and wait and see what happens.”
