CRISIS POINT? – Representatives from the public and private sectors talk about insurance. Courtesy of Blake Davis
The most common concern County Executive Jeff Gorell and Rep. Jacqui Irwin hear from voters is about fire insurance and its lack of affordability and availability.
At an Oct. 15 town hall meeting to address the issue, Gorell told attendees that there could at least be a good outcome to what he called the “crisis.”
“The good news here is that I think Ventura County and the residents of Ventura County will be safer in the end, and that’s one of the good outcomes of an otherwise hidden crisis,” the supervisor said at the meeting, held at the state’s headquarters Ventura County Fire Department in Thousand Oaks.
Irwin said she has heard from countless homeowners who have not found insurance coverage. If they are lucky enough to get a policy, the costs skyrocket.
“We have a lot of stories of non-renewals for customers who live in very high fire areas like Topanga, but then we heard about non-renewals in the lowlands of Thousand Oaks, which is extremely concerning,” Irwin said. “And what we’re seeing now is a number of companies leaving California altogether, which is very problematic and understandably very frustrating for homeowners.”
Real estate agent Rosemary Allison, who took part in the discussion, said she regularly receives calls from clients concerned that they may not be able to stay in their homes due to rising insurance prices. She also hears from buyers who can’t get a loan because of spikes in interest rates.
In one case, a seller had been paying $5,500 per year for insurance, but the cost rose to $22,000 per year for the buyer in addition to costly upgrades. In another case, a buyer was excited to purchase a $68,000 per year policy.
Allison said every transaction she currently has in escrow is under the California FAIR Plan, a cheaper insurance option that reduces total risk from $50 billion in 2018 to nearly $400 billion in 2024 has increased and exceeds the ability to settle claims.
The plan was designed as a last resort for homeowners who couldn’t find insurance in the traditional market.
“It’s much more expensive and offers much less coverage, so you definitely shouldn’t be on the FAIR plan,” said California Deputy Insurance Commissioner Julia Juarez. “The FAIR Plan was not designed to have so many people participating.”
Panelists also included John Mallett and Daniel Groff, local mortgage and insurance specialists; Joe Morelli, Ventura County firefighter; Larry Williams, VCFD fire risk reduction program manager; and Steven Watson, director of the Ventura Regional Fire Safe Council, agreed that the best way for homeowners to receive reduced insurance premiums is to reduce the risk a fire poses to their home, its immediate surroundings and the greater community would represent.
They encouraged homeowners to protect their homes with appropriate roofs and eaves, create defensible space around the building by eliminating combustible materials, and join a Firewise USA community with the National Fire Protection Association or the California Fire Risk Reduction Community List State Board of Forestry to join.
According to speakers, insurance companies are required by law to take the latter two designations into account when offering policies. Homeowners can also appeal the company’s wildfire risk assessment if they believe it is inaccurate.
Groff said residents can ask insurance agents to inspect their property and give them advice on how to make it safer. He also said residents should consider unlicensed insurance carriers — those not regulated by the state — for their insurance needs.
California Insurance Commissioner Ricardo Lara is reportedly in the process of developing a strategy to improve access to insurance across the state. Insurance companies are expected to submit requests for rate reviews in January, and consumers will hopefully feel relief by mid-2025, Juarez said.
“This is our best bet right now – the biggest change we have made to insurance policy in the last 30 years,” the deputy insurance commissioner said. The strategy would allow insurance companies to use catastrophe models, or computer-based calculations, to estimate potential losses that could arise from natural disasters.
California is one of the few states that has not approved such risk management tools, and because rates are based only on past risk and not future risk, Ventura County residents’ rates have increased due to the Thomas and Woolsey fires. Once companies can consider risk mitigation, more accurate risk pricing could emerge.
In return, airlines must have at least 85% of their national market share in historically underserved areas.
Juarez said that while the plan focuses on availability rather than affordability, residents may enjoy cheaper policies once the market becomes more competitive.
“I am optimistic that there is a light at the end of the tunnel, but we all need to work together and do what we can to keep our homes safe,” Irwin said.