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California is, of course, not the only state facing—or not facing up to—a climate-inflected insurance crisis. After a series of devastating hurricanes—Harvey in 2017, Ida in 2021, Helene and Milton in 2024—property owners in Florida, Louisiana, and Texas are also finding insurance increasingly hard to afford or even obtain. The situation is similar in Colorado, where, as in California, wildfire risks are climbing. “We’re a few bad decisions away from being where California is,” Carole Walker, the executive director of the Rocky Mountain Insurance Information Association, told CBS.
For homeowners who can’t find fire insurance, California has an insurer of last resort, known as the Fair Access to Insurance Requirements, or FAIR, plan. The FAIR plan was established by the state, but it is operated by private companies, which pool the risks. Florida, Louisiana, and Texas have similar entities, and Colorado recently established one. As insurers have pulled out of California, the number of policies written by the state’s FAIR plan has risen steeply; just since late 2023, it has grown by more than forty per cent. Meanwhile, the value of the residential properties insured by FAIR has risen to more than four hundred and fifty billion dollars, triple what it was in 2020. This has led to worries that, with all the damage from the current fires, the plan will go broke.
“I’m concerned that we’re one bad fire season away from complete insolvency,” Jim Wood, then a California assemblyman, said back in March. Were FAIR unable to meet its obligations, the state’s insurance companies would have to make up the difference. They, in turn, would pass on at least part of the cost of this assessment to consumers, further driving up prices.
