Fewer Companies Offering Homeowners Fire Coverage in California

Fewer Companies Offering Homeowners Fire Coverage¹ in California

Two large companies say they are pulling back from providing insurance coverage for homes in the U.S. state of California.

The companies said increasing wildfire risk and building costs have caused them to stop writing new insurance policies in America's most populous² state.

Last week, State Farm announced it would stop accepting new policies for business and personal property and casualty insurance. State Farm blamed inflation, a difficult reinsurance market and "growing catastrophe³ exposure." The decision did not affect personal car insurance.

"We take seriously our responsibility to manage risk," State Farm said. "It's necessary to take these actions now to improve the company's financial strength."

Allstate is the other major insurance company pulling back. The company announced in November that it would suspend new homeowners', condominium, and business insurance policies in California. It said the move was to protect current customers.

"The cost to insure new home customers in California is far higher than the price they would pay for policies due to wildfires, higher costs for repairing homes and higher reinsurance premiums," Allstate said in a statement.

Reinsurance is a method for reducing financial risk in the insurance industry.

The problems in California's insurance market are similar to ones across the country. Insurance companies are increasing prices, limiting coverage, or pulling out completely from areas likely to have wildfires or other natural disasters.

Florida and Louisiana have struggled to keep healthy insurance markets following major damage from hurricanes.

Costs are rising in Colorado because of wildfire threats. In Oregon, state forestry⁴ officials withdrew a map of wildfire risk. Homeowners noted⁵ the map would cause their insurance costs to increase sharply.

California has experienced large fires that have been the costliest⁶ in state history. Some California homeowners already are going without insurance.

A state-run insurance program could face pressure as enrollments increase. The California Fair Access to Insurance Requirements Plan provides basic fire insurance coverage for properties in risky⁸ areas that companies will not insure. Enrollment⁷ increased in recent years to 272,846 homes in 2022.

"We just don't have a stable insurance market," said state Senator Bill Dodd. He said many people in the area he represents are going without insurance.

The Insurance Information Institute, an industry group, said California has more than 1.2 million homes with wildfire risk. That is far more than any other state in the country.

"The number of acres burned in California has grown steadily⁹ in recent years, as more people are moving into fire-prone areas of the state," the institute said in a statement. "More homes in harm's way...leads to increased insured losses," the statement added.

Words in This Story

insurance – n. an agreement in which a person makes payments to a company and the company promises to pay money if something (such as a house) is damaged

coverage – n. the activity of reporting about an event or subject in newspapers, on television news programs, etc.

1 coverage   

n.报导，保险范围，保险额，范围，覆盖

参考例句：

• There's little coverage of foreign news in the newspaper.报纸上几乎没有国外新闻报道。
• This is an insurance policy with extensive coverage.这是一项承保范围广泛的保险。

2 populous   

adj.人口稠密的，人口众多的

参考例句：

• London is the most populous area of Britain.伦敦是英国人口最稠密的地区。
• China is the most populous developing country in the world.中国是世界上人口最多的发展中国家。

3 catastrophe   

n.大灾难，大祸

参考例句：

• I owe it to you that I survived the catastrophe.亏得你我才大难不死。
• This is a catastrophe beyond human control.这是一场人类无法控制的灾难。

4 forestry   

n.森林学；林业

参考例句：

• At present, the Chinese forestry is being at a significant transforming period. 当前, 我国的林业正处于一个重大的转折时期。
• Anhua is one of the key forestry counties in Hunan province. 安化县是湖南省重点林区县之一。

5 noted   

adj.著名的，知名的

参考例句：

• The local hotel is noted for its good table.当地的那家酒店以餐食精美而著称。
• Jim is noted for arriving late for work.吉姆上班迟到出了名。

6 costliest   

adj.昂贵的( costly的最高级 )；代价高的；引起困难的；造成损失的

参考例句：

• At 81 billion dollars, Katrina is the costliest natural disaster in American history. “卡特里娜”飓风造成了近810亿美圆的损失，是美国历史上最严重的自然灾难之一。 来自互联网
• Senator John Kerry has proposed a tax on the costliest health plans sold by insurance companies. 参议员约翰？克里(JohnKerry)已经提议对保险公司销售的高价值的保险计划征税。 来自互联网

7 enrollment   

n.注册或登记的人数；登记

参考例句：

• You will be given a reading list at enrollment.注册时你会收到一份阅读书目。
• I just got the enrollment notice from Fudan University.我刚刚接到复旦大学的入学通知书。

8 risky   

adj.有风险的，冒险的

参考例句：

• It may be risky but we will chance it anyhow.这可能有危险，但我们无论如何要冒一冒险。
• He is well aware how risky this investment is.他心里对这项投资的风险十分清楚。

9 steadily   

adv.稳定地；不变地；持续地

参考例句：

• The scope of man's use of natural resources will steadily grow.人类利用自然资源的广度将日益扩大。
• Our educational reform was steadily led onto the correct path.我们的教学改革慢慢上轨道了。