Since 2018, rising temperatures during heatwaves, devastating wildfires, and stronger storms have increased the level of property damage and human harm caused in highly populated areas of America. This equated to greater losses for the insurance companies to cover the cost for their insured to rebuild their homes and pay for recovery health care. Exasperating the American insurance industry are the inflationary cost of reconstruction. As a result, homeowner insurance providers are facing elevated payouts faster than they can replenish their financial liquidity. As a result, insurance rates are increased to cover their financial output, which creates an additional financial burden on the insured homeowner during the current economic atmosphere of global inflation.
What effect does climate change have on the homeowner in the form of high cost of living? Hoffman referenced statistics from the Minneapolis Federal Reserve article "Homeowners Insurance Costs are Growing Fast but Coverage is Shrinking," by Tu-Uyen Tran. Tran indicates that from 2017 - 2023, homeowners insurance rates in California increased by 43.7%. Furthermore, in the states of Montana, California, and other western states, wildfires were the main cause for insurance premium rate increases.
Despite the recent increase in wildfires up to 2017, property damage due to these events in California has lowered from approximately $4 billion in 2018 to around $304 million in 2022. Compare this to approximately $12 billion in 2017. Since 2017, under the stewardship of Governor Newsom, legislation passed provided funding needs for the state's Emergency Services to acquire the tools needed to reduce wildfire events, provide forestry management, and educate property owners on wildfire preparedness practices. Referencing the CalFire incident report, in 2018 there were 7,948 wildfires, 1,975,086 acres burned, and 24,226 structures destroyed. Compare this to 2024 year-to-date CalFire incident report indicating 7,026 wildfires, 1,013,960 acres burned, 1437 structures destroyed, and 271 damaged. Mitigating the wildfire crisis has improved. Climate change is still an issue, and so is the insurance crisis.
Placer County government is addressing this insurance crisis reaching out to state governmental support for our Emergency Services and promoting wildfire preparedness programs in making our community safer from wildfires. Despite these efforts on the part of those within the rural community undertaking measures to wildfire safe their homes, they are rewarded with increased insurance costs. Recently, the Placer County Board of Supervisors sent a letter to Governor Newsom requesting that a State of Insurance emergency be declared.
In this election year 2024, climate change as a threatening element affecting our rural living environment, and our cost of living is a major issue crossing political party lines. This is why it is important when submitting that ballot, voters must consider the questions. Are the current candidates vying to represent our area in the State and Federal legislature in the mind frame that climate change is a scientific fact? Are these candidates endeavored to work together to address the wildfire safety issue as a team, absent of political party tribal loyalty, to mitigate this issue? And are they motivated to hear the pain of the people they are asking to represent to use these factors to work with the insurance industry to alleviate the cost of living crisis of high homeowner insurance policy costs? Senate candidate Adam Schiff, Congressional candidate Jessica Morse, and Assembly candidate Neva Parker are of this mindset. What have we heard from the other side of the aisle?