The California insurance crisis laid bare by the Los Angeles fires was fueled by 'regulatory failure,' economist Nancy Wallace told Newsweek.
A few years after settling down with her husband in California's East Bay, Nancy Wallace narrowly escaped death when the devastating Oakland Hills firestorm of 1991 burned down her home and claimed the lives of 25 people.'It was a shock, we really had no experience of this kind of loss, and certainly not wildfire at that level,' Wallace, a professor of finance and real estate at UC Berkeley's Haas School of Business, told Newsweek.
'Wallace says that having kept homeowners' insurance prices artificially low in California's fire country might have led to more people moving to those areas, exacerbating problems like narrow roads and dense development—which made the Los Angeles fires in January so destructive.Research by Redfin found that more people moved into fire-prone areas of America in 2023 than out, with Riverside County seeing the largest net inflow of new residents, for a total of 7,807. An estimated 78.
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