‘A ton of unknowns’: months ago, LA residents lost wildfire insurance. Then the fires came

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Borow was one of 1,626 State Farm customers in the Palisades neighborhood whose fire insurance was not renewed at the end of 2024, according to California's insurance office. They represented about 70% of State Farm's market share in Pacific Palisades, according to the San Francisco Chronicle.

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Finding fire insurance for homes in areas with high fire risk is a challenge that will only increase for Californians, experts predict. Michael Coffey, an insurance defense litigator who works on large, global insurance cases, says he expects more insurance companies to leave the state - forcing prices up for everyone.

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In the longer term, the state has been looking for fixes as its insurance market is overburdened by the devastation caused by climate crisis-fueled disasters. A new regulation that took effect this month allows insurers to consider the climate crisis when setting their prices - which many insurance companies had said was a reason they pulled out of the state's insurance market. California previously did not let insurance companies factor in current or future risks when deciding how to price their policies.

Coffey says that the government cannot be a blind insurer of people's homes. "That's not something the government can be in the business of," he says. "It's too expensive and it would overwhelm the system economically.

"If people thought it was expensive now to live in California, I think they should understand that it's priced based upon the risks," Coffey says. "And California has a lot of insurance risk between earthquakes and wildfires, so you're gonna have to pay a lot more."

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