More rate hikes loom as the 2024 wildfire season blazes into action
By Shant Karnikian
The summer has been marked by scorching temperatures across California, causing controversy over fire insurance as devastating wildfires put communities at risk.
The Park Fire, one of the largest wildfires in California history, continues to rage in Northern California, threatening over 4,200 structures across four counties. Thousands of firefighters are struggling to expand containment lines. The blaze, deliberately ignited last Wednesday, has spread to 368,256 acres through Butte, Plumas, Shasta, and Tehama counties.
Climate change is driving extreme weather and more natural disasters. In California, a long, wet winter leads to a burgeoning in vegetation, which, as it dries out in the summer heat, provides extra fuel just as conditions ripen for fire.
As we approach August, we’re heading towards peak wildfire season after weeks of blazes erupting up and down the state, including:
- San Bernardino’s Vista Fire began on July 7. It has burned nearly 3000 acres and is 47% contained.
- The Lake Fire in Santa Barbara, which started July 5, has already burned over 34,000 acres and is currently only 34% contained.
- The Thompson Fire in Oroville (neighboring Paradise, the town destroyed by fire in 2018) burned almost 3800 acres in the first week of July.
- The Shelly fire, burning since July 3 in Northern California’s Siskiyou County, is just 3% contained and has already burned 11,234 acres.
The California Department of Fire and Forestry Protection (CAL FIRE) reports scary statistics for 2024: so far this year, there have been 3,809 wildfires, with 226,542 acres burned; 148 structures have burned, almost 100 of which were destroyed.
Tragically, over the weekend, human remains were found in a home that burned down in the Mina fire in Mendocino County—the first fatality of the fire season.
Wildfires threaten communities, homes, lives, resources, and wilderness areas.
Property owners and renters who live in vulnerable regions depend on home insurance for protection. But major insurance companies, pointing to rapidly increasing risks and costs, have been pulling out of California over the last year, and introducing steep rate hikes. It’s caused an ongoing crisis of fire insurance affordability and availability throughout the Golden State.
Is another big insurance rate hike on the way?
In March, only nine months after announcing it would no longer issue new policies in California, State Farm abruptly discontinued existing policies for 72,000 households.
As of last week, the insurance giant is asking the state government for the green light to raise rates by up to 52%. According to its filing with California’s Department of Insurance, State Farm wants to increase homeowners’ insurance policies by 30%, condo policies by 36%, and renters’ policies by a whopping 52%
Some homeowners have been priced out of insurance and are taking the serious risk of going without; others have resorted to the state’s FAIR Plan, a last-ditch, temporary insurance plan offering minimal coverage at high premiums.
Across the state, major fire mitigation projects costing billions of dollars are underway, and property owners are taking measures (often at great personal expense) to harden their homes. Studies show that mitigation can dramatically reduce fire risk.
Lawmakers have introduced several bills to reduce consumer costs by requiring insurers to take mitigation efforts into account when writing policies.
Senate Bill 1060, authored by Sen. Josh Becker (Democrat, Menlo Park), “seeks to incorporate mitigation into insurance companies’ underwriting decisions — when they consider whether to write or renew policies,” according to CalMatters. “We believe that if you do the homework, you should get the credit,” Becker said.
Assemblymember Freddie Rodriguez (Democrat, Chino) introduced Assembly Bill 2983 to assess the effectiveness of mitigation.
Yet another bill, AB 2416, authored by Assemblymember Damon Connolly (Democrat, San Rafael), would require the Insurance Department to make regular evaluations/updates of its Safer from Wildfires regulations. These regulations were designed to compel insurers to disclose their rates and reward home and business owners for taking mitigation measures.
Protecting your home from wildfire
According to Safer from Wildfires, crucial steps for home hardening include:
Installing a Class A fire-rated roof, clearing a 5-foot ember-resistant zone around the structure, installing ember- and fire-resistant vents, clearing brush/trimming vegetation, and more.
Kabateck LLP has represented thousands of homeowners who suffered wildfire damage to their homes. Our mass disaster litigation team has also successfully sued insurance companies that engaged in bad faith by refusing to pay valid claims or severely underpaying valid claims due to damages. KBK has successfully litigated hundreds of cases related to California wildfires.