The Economic Impact of Wildfire Events on Rural California
An Analysis by Terry P Rodriguez
Part III
The Impact on Joe & Jane Doe California Citizen
Part II discussed how disastrous wildfire events negatively affect the California State Budget, and ultimately tax-paying California citizens' pocketbooks. But what about the toll it takes on individual rural homeowner's lives, and what can Joe & Jane Doe Rural California citizen do about it.
The increasingly high cost of California wildfire events not only effected government budgets, the U.S. economy, and the insurance industry, but also resulted on escalating cost-of-living expenses for homeowner families. As an example, during a September 4th 2019 Meadow Vista California Municipal Community Advisory (MAC) meeting, one resident testified that he was on a fixed income, his homeowner insurance policy was abruptly cancelled, and in his search to replace it, his new policy came with an acute escalating cost over what he had previously paid. His payments were monthly, with a balloon payment due at the end of its policy term (Terry P Rodriguez, September 4 2019). As another example, in Foresthill, California, there were some homeowners paying as much as $10,000 to $12,000 per year in homeowner insurance premiums. Natalie Orenstein cited in her article, "Insurance Firms Drop Berkeley Hills Homeowners, Citing Wildfire Risk," an August 2019 Department of Insurance data report indicating that between 2017 and 2018, homeowner's insurance cancellations increased 6% within those areas in California that were mostly under the protection of Cal Fire. And that between 2015 and 2017, those areas experiencing devastating wildfires were impacted by a 10% increase in non-renewals. Not factored into this information were the escalation of those homeowner policies that were cancelled as of the wildfires of 2018. Homeowner insurance policies that were cancelled within 10 counties of high risk wildfire areas resulted in a 177% premium increase on policies purchased under the State Fair Plan, the insurance of last resort (Natalie Orenstein, September 9 2019). Within California's WUI community, those affected, or not affected, by wildfire incidences, faced the reality of paying for dramatically increased homeowner insurance rates, or policy cancellations.