Wildfires and Their Future Impact on California Home Insurance

Christian Richter Personal Insurance Leave a Comment

At the time of this writing, there are two active fires (Carr, Ranch) in California that have consumed over 200,000 acres and a handful of others burning throughout the state. Earlier this summer, the Ferguson fire burned nearly 100,000 acres.  Last year, the Thomas fire ravaged Ventura and multiple fires in northern California destroyed vast amounts of the Santa Rosa and Napa areas. Events previously thought to be once-in-a-decade are now occurring regularly, and they’re forcing home insurance carriers to take hard looks at their underwriting and pricing.

Below is a list of potential actions we expect California home insurers to take in response to the recent uptick in catastrophic losses.


  1. Non-renewal of existing in policies in “high fire hazard” areas – AAA has already begun this process, and has had a significant impact on homes located in Fallbrook and areas of North San Diego County. Many of the households being non-renewed have been with AAA for decades – this should serve as a reminder that an insurance company is not loyal to any one policy holder. AAA is not the first to do this, and they certainly won’t be the last.
  1. Closing zip codes and communities from coverage – Households that live in mountain communities will be familiar with this as the majority of carriers have already closed zip codes and will not write coverage. In the local mountain areas such as Big Bear and Lake Arrowhead, there are only a few insurance options. It is entirely possible that homeowners within a half-mile of natural hillsides will end up with only a small handful of carriers willing to write their home insurance.
  1. Surcharges for properties in “high fire hazard” areas – Some carriers have already placed wildfire surcharges on a small selection of homes. The amount of homes being surcharged and the size of the surcharges should increase significantly.
  1. Complete exit of the home insurance market – There are nationally recognized insurance carriers such as Geico and Allstate that do not write home insurance in California. After what’s transpired over the past 18 months, they look brilliant. It wouldn’t be surprising to see more companies follow their lead and cease issuing home policies in California. Edit: Just today, we received notice that American Reliable Insurance Company will cease writing Homeowner and Dwelling Fire in California as [those lines of business] have proven extremely unprofitable

The biggest mistake to that can be made is to assume that you have the correct coverage or that your home will never burn. There are many actions you can take to prepare for, and help offset, increasing premiums. Please give us a call for a free consultation.


DISCLAIMER: This article is provided for general informational purposes only and should not be relied upon for legal advice. Old Harbor Insurance Services, LLC recommends you consult your risk manager, attorney, business adviser, or insurance representative for all questions or concerns.

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