It seems obvious to me that home insurance companies should be basing their rates on differences in risk of fire, and I’ve wondered why that hasn’t been happening more. California seems to be the first place, but why should it stop there?
California’s insurance commissioner has warned that more and more insurers operating in the state are refusing to issue homeowners’ policies in areas most prone to wildfires.
Although many of the affected customers can still get coverage from other insurers, Jones noted that there has also been an increase in homeowners signing up for California’s insurer of last resort of fire; the FAIR Plan.
Jones said that the problem will only get worse as insurers label more homes as wildfire risks following the most recent series of wildfires that hit the state.
Others still disagree. Something that doesn’t make obvious sense to me is that they seem to be looking at past fires more than the potential for future ones.