Californians were more reliant on insurer of last resort in 2020

(Bloomberg) — The number of California residents forced to turn to the state’s “insurer of last resort” climbed last year.

Consumers getting policies from the California FAIR Plan climbed about 25% in 2020, according to data from the state’s insurance department. That was due to increases in both new policies and renewed ones.

“More communities are rolling up their sleeves to protect their homes from wildfire. And more insurance companies are heeding my call to give incentives for home safety,” California Insurance Commissioner Ricardo Lara, said in a release. “While we still have a way to go until we have an insurance market that works for all Californians, I remain focused on increasing home safety measures to protect homes and promote market competition while strengthening the FAIR Plan, California’s insurance safety net, so it better addresses consumers’ and businesses’ coverage needs.”

California’s home insurance market has been battered in recent years by powerful wildfires that have destroyed properties and left insurers reevaluating their business in certain parts of the state. For some consumers, that’s meant pricier premiums to maintain coverage, or being dropped by their insurer completely.

Since 2000, California has seen more wildfires than any other state.

While homeowners have in the past faced the possibility of insurers refusing to renew policies, the number of non-renewals last year fell about 9.7%, according to California Department of Insurance data released Monday. The regulator attributed about 80% of that decline to the fact that Commissioner Ricardo Lara imposed some mandatory moratoriums on dropping consumers.

Related:

• The importance of tracking wildfires in real-time
• Ecological forestry can lower insurance premiums
• The costliest fires in U.S. history

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