Wildfire risk in California is driving insurers to pull policies for high-end homes. Mass-market insurers have already cut back, pushing up prices.
Some insurers are frustrated that California regulators require them to set home-insurance rates based on their historical loss experience, not projections of future losses that are determined by catastrophe modeling. Such models can reflect detailed, location-specific data that the insurers feel they need amid escalating wildfire activity tied partly to climate change.
“We are very disappointed that a diversified company with massive global resources like AIG is not staying the course to help support safer, more resilient communities here in California,” said Michael Soller, a deputy insurance commissioner. The state has been trying to help consumers reduce wildfire risk, and has pushed insurers to provide discounts for mitigation measures.
Finding replacement coverage can be difficult in California, particularly for the biggest and most-expensive homes. Mr. Green and his wife, Jane, have spent tens of thousands of dollars trimming trees, installing a fire hydrant to draw from a swimming pool and taking other steps to reduce the risk of their house burning down.
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