Is there an end in sight for Big Bear’s insurance crisis?

If the fires in the Pacific Palisades have taught us anything this week, it's that we all need insurance. But due to Big Bear's designation as a wildfire-prone area, insurance, in general, has become more and more difficult to obtain.

On Dec. 30, 2024, news agencies began reporting on a new state regulation that would require insurance companies in California to begin offering coverage to homes in areas considered prone to wildfires.

But will the new regulation really help Big Bear homeowners, who have been struggling to find affordable coverage — or coverage of any kind — this past year? Here's what the Grizzly found out.

About the new regulation

Back in September, the Grizzly reported on a virtual town hall led by California Insurance Commissioner Ricardo Lara, where he shared his plans to make insurance more widely available beginning in 2025. Theoretically, the regulation announced Dec. 30 would allow him to hit his mark. But the new law, which states insurance companies will be "legally required" to write at least 85% of their market share to wildfire-prone homes, has a few caveats.

First, it isn't actually a law yet. According to county Supervisor Dawn Rowe, the Office of Administrative Law is reviewing the regulation for compliance. When the Grizzly reached out to Lara's office, his press secretary, Gabriel Sanchez, said only that the reforms will be "in full effect in 2025."

Second, if it is approved, the mandate will be phased in slowly. Though the regulation, as written, says insurance companies will be mandated to write policies in wildfire-prone areas "equivalent to no less than 85% of their statewide market share," that level of coverage will not roll out immediately. Instead, companies will be asked to increase by 5% every two years.

To give an example: If X Insurance Agency currently offers 100 policies in California, the new regulation would require them to offer 85 additional policies in wildfire-prone areas. But those 85 policies would be added slowly — just 4.25 new policies per year.

Lastly, there's the small issue of cost. One major component of the regulation is that it will allow insurance companies to pass on the cost of "reinsurance" to consumers via their premiums. Reinsurance is insurance that insurance companies take out with other large insurance companies to protect themselves from giant payouts during wildfires and other catastrophes that could sink their companies. Basically, it's like Allstate asking Progressive to cover their back if something major happens, while having their own customers foot the bill.

The Grizzly reached out to Christopher Mark Thompson, an insurance agent for Farmers Insurance in Big Bear, who said the regulation could force insurance rates to go up so high that the new policies offered are irrelevant.

"I would say also there are things written into that law where we could see costs go through the roof, it seems to me," Thompson said.

"Even if they are writing, if it's so expensive, it might not help us. Until we see that, I would say the jury is out whether it will be a benefit or not."

The Consumer Federation of America, a watchdog company, has gone on record saying the new regulation could raise rates up to 40%.

Sanchez told the Grizzly that insurance rates are regulated under California's Proposition 103 and must be approved by the Department of Insurance to ensure they are not "excessive or unfair."

"Rates reflect actual risks, including wildfire threats, and are subject to public scrutiny," Sanchez said.

Part of Lara's Sustainable Insurance Strategy, Sanchez said, is to create a more stable and predictable market by requiring insurers to recognize wildfire mitigation efforts, which can lower premiums for safer homes. In other words, if you're working hard to keep your own home or community safer from wildfires, insurance companies need to take that into consideration when writing your policy.

"California Department of Insurance remains focused on affordability through availability and risk reduction measures," Sanchez said.

Still, as Thompson explained, two main elements determine the cost of one's insurance: the size of the home and the perceived risk of covering it. And those aren't really changing.

"Big Bear has been a high perceived risk for decades," he said. "People have been pulling out of here for at least 20 years, if not 30. Now it's to the point where it's harder than it's ever been before. It's more expensive than LA or the desert, but it is a higher perceived risk so we are going to pay a premium to live here."

Still, Rowe remains hopeful. Lara's plan to increase insurance availability involves using catastrophic modeling to help insurance agencies better gauge how much of a risk insuring homes in fire-prone areas like Big Bear would actually be, as well as how much homeowner mitigation efforts could limit that risk.

"These initiatives should increase insurance availability and help control costs, so that mountain residents can more easily obtain necessary insurance," Rowe said.

Until these changes go into effect, however, Big Bear residents will still need to continue to rely on California's Fair Access to Insurance Requirements plan as their only guaranteed source of fire insurance coverage. And considering what's happening in Los Angeles this week, FAIR may soon be facing a crisis of its own.

A fiery wake-up call for the FAIR plan

The real question today is not just whether Big Bear residents will be able to get private insurance, it's how long the FAIR program will be able to carry the burden of wildfire damage in California before it runs out of funding.

This past September, FAIR shared that its financial risk exposure had grown from $50 billion in 2018 to almost $400 billion as of June 2024 due to the increased number of customers it's been forced to pick up as insurance carriers canceled policies in the state.

At the same time, FAIR shared it has $700 million in cash-on-hand and just $200 million in surplus. FAIR had purchased an additional $2.5 billion in reinsurance, but looking at this single event in Los Angeles, it's clear that isn't enough. By Jan. 8, among all three fires burning in the area, there was an estimated $10 billion in damage — and the fires were still going strong.

State rules mandate that if FAIR needs additional money to cover its claims, it can lean on the private insurance industry to cover the difference. But with so many insurance carriers wary of writing policies for this precise reason, it's logical to wonder if even this lone fire insurance option available to Big Bear residents may soon be underwater.

What to do if you're in insurance limbo

First: don't panic … yet. Thompson noted Farmers is still writing policies in Big Bear, for instance, although they — like other providers — require homeowners to carry a second FAIR plan policy to cover potential fire damage. For many, the idea of carrying two insurance policies is daunting. But if they cost less than a single plan mandated by the state, they may still be the best option available.

Sanchez assured the Grizzly the FAIR plan – though "intended as a safety net and not a permanent solution" – will "still play a role in high-risk areas for the foreseeable future" though Lara's aim is to gradually decrease California's reliance upon it.

Again, that assumes the recent fires in the Pacific Palisades and surrounding areas don't put FAIR out of business.

Second, know your options. You may be able to reduce your annual cost by eliminating unnecessary coverage or reducing coverage limits. Take a look at your policy and consider where you may be able to increase deductibles or lower coverage levels.

Lastly, though insurance is required if you have a mortgage on your home (and in many cases if you are using your home as a vacation rental), Thompson says it is not required if you own your home free and clear. Obviously, it's risky and ill-advised to go without insurance. But if you do own your home and the premiums are simply too high for you to manage, you are not required to have it.

Research shows the number of households without insurance has increased significantly in the past five years. For some, coverage is too costly. Others fear insurance companies will not be able to pay out if a major catastrophe occurs or that their actual payout would not allow them to rebuild adequately (see above). About 1 in 8 households in the country are now unprotected.

This is a quickly developing story. The Grizzly will continue to cover this new proposed regulation and provide updates as they become available.

NOTES NOTES NOTES

Farmers Insurance Agent

Christopher Mark Thompson

VMd/Emailed Lara's office with some questions

Farmers Insurance Agent

Christopher Mark Thompson

Whatever percentage of the market that your company is covering, you will need to match 85% of that in areas with high perceived fire danger.

If Farmers had 20%, would need to write 85% of that. Not mandated at this time.

Additionally here are also structures in there where - and it's unclear to me exactly what they mean by insurance bein goffered - we are writing insurance, we're just not covering fire generally speaking. Our policy covers perils other than fire. FAIR covers the rest.

NOt sure how writing those will be interpreted.

Until we see that, we don't know. Trying to come up with strategies.

"I would say also there are things written into that law where we could see costs go through the roof, it seems to me."

Changing restrictions off raising rates. Even if they are writing, if it's so expensive, it might not help s.

"Until we see that - I would say the jury is out whether it will be a benefit or not."

Currently we are lucky to have FAIR - picking up the fire risk in the areas where traditional insurance market has not been able to provide coverage.

FAIR is good, basic policy. Together, you do

FAIR is not going away - mandated by law.

"I would say Florida has more problems than California right now,"

- two hurricanes recently. Read average policy in FL is $11,000 per year.

"Hopefully, we wouldn't be going there. Very few policies in Big Bear cost that much."

If there is a better policy available, once we have details - right now, the understanding is still in review stage so until there's a final mandate - and plus, for us, we would have to see – Farmers would have to react and say what they are writing and what is available.

If that single policy plan is more than two policies, I would say the benefit

Regardless - there are two things that affect cost – size of house and perceived risk.

"Big Bear has been a high perceived risk for decades. People have been pulling out of here for at least 20 years if not 30. Now it's to the point where it's harder than it's ever been before."

Concern isn't just one house - it's a catastrophic fire that occurred in Paradise or Maui last year - if you get a wind-driven fire. THey're worrying about the fire department burning down. And we have seen huge increases in premium with other companies.

"It's more expensive than LA or the desert, but it is a higher perceived risk so we are going to pay a premium to live here."

It doesn't sound like "a miracle' to me - many years ago, California required companies to offer earthquake insurance. And California mandated the cost o the insurance also.

"So all these companies wrote that coverage and when Northrdige hit, many of those companies went out of business and moved out of California."

From there, they created CA Earthquake Authority. Started offering again. Hard for the govt to mandate private industry that they don't want to do or don't make economic effects. Can have adverse effects also.

"This law, although they require (coverage), they aren't mandating cost. If it costs an arm and leg and it's half the price to use FAIR, I don't think it will change much."

My guess is the 30 days gets extended.

FARMERs is still actively writing here, they just aren't covering fire. Most companies are not - they just say no.

"It's harder now than it's ever been, but there's still insurance available"

And writing it in a way where you aren't covering things you don't ned to cover and accept risk with higher deductives.

As long as you own it free and clear, you aren't required to have insurance. If you have a loan, the lender def wants you to have insurance to protect their investment. Also, folks up here - they are second homes and are used for short-term rentals. To get that permit to use you have to show proof of liability insurance. Depends on occupancy and if you have money on the home.

The number of people on California's FAIR plan more than doubled between 2020 and this year, reaching nearly 452,000 policies.

https://www.cbsnews.com/sanfrancisco/news/insurance-companies-california-coverage-wildfire-prone-areas-new-regulation/#:~:text=Insurance%20companies%20in%20California%20will,pulled%20coverage%20from%20various%20areas.

Insurance companies in California will have to offer coverage to homeowners in wildfire-prone areas under a new state regulation that was announced Monday. Dec 30

The new regulation aims to give residents access to more insurance options after companies pulled coverage from various areas.

Insurance companies will be legally required to write policies in those areas "equivalent to no less than 85% of their statewide market share." Coverage won't increase to that threshold immediately. Instead, companies will be given a requirement of a 5% increase every two years.

"Californians deserve a reliable insurance market that doesn't retreat from communities most vulnerable to wildfires and climate change," said California Insurance Commissioner Ricardo Lara.

Coverage won't increase to that 85% threshold immediately. Instead, companies will be given a requirement of a 5% increase every two years.

The regulation is the latest in Lara's Sustainable Insurance Strategy. Lara previously announced that companies would be allowed to use catastrophe models and climate change to set higher rates.

According to Lara, the use of catastrophe models will ensure "reliable rates."

"Under the system of historical data, insurance consumers are paying balloon premiums and rate spikes after major wildfires, without increased availability," the press release stated.

The requirement to cover wildfire-prone areas was the last step in Lara's Sustainable Insurance Strategy.

Dawn Rowe

Farmers Insurance Agent

Christopher Mark Thompson

(909) 866-8861

(909) 866-2588

41656 Big Bear Blvd

California will require insurers to offer home coverage in wildfire-prone areas

Opponents say rule could hike premiums by 40% and does not require new policies to be written at fast enough pace

Associated Press

Tue 31 Dec 2024 14.06 EST

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Insurance companies that stopped providing home coverage to hundreds of thousands of Californians in recent years as wildfires became more destructive will have to again provide policies in fire-prone areas if they want to keep doing business in the state.

The new state regulation, announced on Monday, will require home insurers to offer coverage in high-risk areas, something the state has never done, the office of the California insurance commissioner, Ricardo Lara, said in a statement.

Insurers will have to start increasing their coverage by 5% every two years until they hit the equivalent of 85% of their market share. That means if an insurer writes 20 out of every 100 state policies, they'd need to write 17 in a high-risk area, Lara's office said.

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Major insurers such as State Farm and Allstate have stopped writing new policies in California due to fears of huge losses from wildfires and other natural disasters.

In exchange for increasing coverage, the state will let insurance companies pass on the costs of reinsurance to California consumers. Insurance companies typically buy reinsurance to avoid huge payouts in case of natural disasters or catastrophic loss. California is the only state that doesn't already allow the cost of reinsurance to be borne by policyholders, according to Lara's office.

Opponents of the rule say that could increase premiums by 40% and doesn't require new policies to be written at a fast enough pace. The state did not provide a cost analysis for the potential impact on consumers.

"This plan is of the insurance industry, by the insurance industry and for the industry," Jamie Court, president of Consumer Watchdog, said in a statement.

The rule will require home insurers to offer coverage in high-risk areas, something the state has never done, Insurance Commissioner Ricardo Lara's office said in a statement. Insurers will have to start increasing their coverage by 5% every two years until they hit the equivalent of 85% of their market share. That means if an insurer writes 20 out of every 100 state policies, they'd need to write 17 in a high-risk area, Lara's office said.

Major insurers like State Farm and Allstate have stopped writing new policies in California due to fears of massive losses from wildfires and other natural disasters.

In exchange for increasing coverage, the state will let insurance companies pass on the costs of reinsurance to California consumers. Insurance companies typically buy reinsurance to avoid huge payouts in case of natural disasters or catastrophic loss. California is the only state that doesn't already allow the cost of reinsurance to be borne by policy holders, according to Lara's office.

Opponents of the rule say that could hike premiums by 40% and doesn't require new policies to be written at a fast enough pace. The state did not provide a cost analysis for potential impact on consumers.

"This plan is of the insurance industry, by the insurance industry, and for the industry," Jamie Court, president of Consumer Watchdog, said in a statement.

The requirement is under review by the Office of Administrative Law before it takes effect within 30 days.

"Californians deserve a reliable insurance market that doesn't retreat from communities most vulnerable to wildfires and climate change," Lara said in a statement. "This is a historic moment for California."

The new rule is part of Lara's effort to persuade insurers to continue doing business in the nation's most populous state. He unveiled another rule earlier this month to let insurers consider climate change when setting their prices. Insurance companies had said that because they can't consider climate change in their rates, many opted to either pause or restrict new business in the state. The new rule to include climate change in rates will take effect later this week.

The ultimate goal of the new rules is to get homeowners out of the California Fair Access to Insurance Requirements (FAIR) Plan, which often serves as the last resort when insurance companies stop providing coverage for those living in areas threatened by wildfires, Lara's office said. The plan could help a homeowner fulfill insurance requirements imposed by mortgage companies, but it is mainly designed as a temporary safety net with basic coverage until policyholders find a more permanent option. The number of people on California's FAIR plan more than doubled between 2020 and this year, reaching nearly 452,000 policies.

Wildfires have always been part of life in California, where it only rains for a few months out of the year. But as the climate has gotten hotter and dryer, it has made those fires much larger and more intense. Of the top 20 most destructive wildfires in state history, 14 have occurred since 2015, according to the California Department of Forestry and Fire Protection.

The 2018 fire in Paradise, California, killed 85 people and destroyed about 11,000 homes, and some residents have struggled to find home insurance since.

Steve Crowder, the town's mayor, lost his house and business. Since then, his family has rebuilt their home but struggled to find insurance. The Crowders were forced to enroll in FAIR Plan earlier this month. Despite paying roughly $5,000, the mayor said his home is insured for roughly $100,000 less than its value and the house's contents are only half-covered.

"You couldn't rebuild what you got for what it's insured for," he said.

His constituents face similar problems. With policies skyrocketing from roughly $1,200 annually before the Camp Fire to $5,000 now — or even up to $20,000 a year for large homes — some have abandoned attempts to find coverage altogether.

In the years after the Camp Fire, Crowder said the town has successfully brought back some insurers after enacting new ordinances with high standards to keep structures safe, such as rules regarding clearances, vegetation and fences.

While the mayor welcomed the state's new rules, he said he and his constituents are skeptical things will improve.

"Anything that will help get insurance in California, period, is helpful," he said, but added: "Let's wait and make sure it happens before we get excited."

Commissioner Lara issues landmark regulation to expand insurance access for Californians amid growing climate risks

News: 2024 Press Release

For Release: December 30, 2024

Media Calls Only: 916-492-3566

Email Inquiries: [email protected]

Commissioner Lara issues landmark regulation to expand insurance access for Californians amid growing climate risks

Measure is final major step in historic reform to expand insurance coverage across California

SACRAMENTO, Calif. — Insurance Commissioner Ricardo Lara today announced the final major step in his Sustainable Insurance Strategy, issuing a historic regulation aimed at restoring stability to California's insurance market while addressing the growing risks of wildfires and climate change. The new Net Cost of Reinsurance in Ratemaking Regulation requires insurance companies — for the first time — to increase coverage in high-risk areas, ensuring more options for Californians while limiting the costs passed on to consumers. The regulation works hand-in-hand with other reforms that Commissioner Lara has spearheaded that will have the effect of increasing insurance coverage options for Californians across the state.

"Californians deserve a reliable insurance market that doesn't retreat from communities most vulnerable to wildfires and climate change," said Commissioner Lara. "This is a historic moment for California. My Sustainable Insurance Strategy is focused on addressing the challenges we face today and building a resilient insurance market for the future. With input from thousands of residents throughout California, this reform balances protecting consumers with the need to strengthen our market against climate risks."

Reinsurance is a financial tool that is part of how insurance companies manage their risk portfolios associated with the policies they write to homeowners and business owners. Its roots date back to the 14th century, when merchants and traders sought ways to spread the risks of perilous ocean voyages, often relying on multiple insurers to cover their ventures. Today, as climate risks escalate across the nation, reinsurance has become an even more imperative component of insurance companies operating in high-risk and distressed areas, including California. Modernizing regulations around reinsurance will enable insurance companies to expand coverage and write more policies in communities across the state facing greater risk, ensuring stability and resilience in our insurance market.

All other states except California allow for costs of reinsurance in rates and, in 2023, the first systematic review of climate risk strategies by Ceres and the California Department of Insurance revealed that reinsurance is the primary strategy most insurance companies use to continue to write and expand coverage in higher risk parts of California and across the country.

What it means: Insurance companies must increase coverage in wildfire-prone regions, ensuring they write policies for at least 85% of their statewide market share, with annual increases until the threshold is met.

More coverage for Californians in wildfire-distressed areas: All homeowners insurance companies must increase the writing of comprehensive policies in wildfire distressed areas equivalent to no less than 85% of their statewide market share, whereas there is no current legal requirement today for insurers to provide any coverage in high-risk areas. Companies will have to continue to increase by 5% every two years until they meet this threshold.

Cost caps: The regulation treats reinsurance like other insurance company expenses allowed under Prop. 103 today — such as claims handling or agent commissions — by establishing an industry-wide standard cost of reinsurance and capping the amount of reinsurance costs that can be charged to consumers. Companies spending more than the industry standard cannot pass these costs onto their policyholders.

Greater efficiency: Establishing a standard cost based on an index of what insurance companies spend encourages them to be efficient and compete for the best price for reinsurance, so consumers get the best value.

California-only costs: The regulation limits costs to California-only, so consumers do not pay for the cost of Gulf Coast hurricanes or Midwest windstorms.

Reliable rates: The regulation goes hand-in-hand with forward-looking wildfire catastrophe models that can better predict future rates. Under the current system of historical data, insurance consumers are paying balloon premiums and rate spikes after major wildfires, without increased availability.

Prevents "model-shopping": "Model shopping" describes when insurance companies choose one model that produces higher rates for consumers, and another that lowers their reinsurance costs. To prevent model shopping, the regulation requires insurance companies utilize the same model for both. This promotes more consistent approaches to assessing risks, and balances the scales for consumers.

Largest insurance reform in 30 years: The new regulation is the final major element of the largest insurance reform in 30 years for California. The Department held multiple workshops and hearings in 2024, including a meeting on December 5 which was attended by more than 500 people and received 70 verbal and written comments which helped shape this regulation. Commissioner Lara has met with tens of thousands of Californians in all 58 counties across the state since taking office as well as testifying at four legislative briefings about his Sustainable Insurance Strategy over the past year.

Commissioner Lara announced on December 13 that he had finalized a wildfire catastrophe modeling regulation with a requirement for insurers to increase their policy offerings in underserved areas of the state as a condition of incorporating catastrophe modeling into ratemaking. These two regulatory efforts work together, with other Sustainable Insurance Strategy reforms, to increase the availability of homeowners and commercial insurance policies in wildfire distressed areas.

Media Calls Only: 916-492-3566

Email Inquiries: [email protected]

Most medical debt can no longer hurt credit scores under new California law

By CALmatters | CALmatters.org

UPDATED: December 26, 2024 at 1:26 PM PST

By Ana B. Ibarra | CalMatters

A new state law will keep medical debt off your credit report, sparing a hit to your all-important credit score. This is a big deal for California where millions struggle with unpaid medical bills. It takes effect Jan. 1, 2025.

Everyday people across the country skip medical care because of cost. Those who do seek medical help may end up with a balance they can't pay off. That debt can hurt people's credit scores, resulting in long-term financial burdens.

Starting Jan. 1, a new state law will prohibit health providers and debt collectors from reporting medical debt information to credit agencies. That means unpaid medical bills should no longer show up on people's credit reports, which consumer advocacy groups say is a boon for patients with debt.

Here's why: While the law will not forgive someone's debt, by keeping it off credit reports, it might provide some reassurance that a hospital stay or trip to urgent care won't later affect their credit standing. Lower credit scores usually result in higher interest rates and make it difficult for people to qualify for a home rental, a car loan or even employment.

During legislative hearings , the law's author, Sen. Monique Limón , a Democrat from Santa Barbara, contended that because people don't choose to have a medical emergency or illness, this type of debt should not count against them. Supporters also argued that medical debt is more prone to inaccuracies because of billing mistakes by health providers and insurers.

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The main three credit bureaus – TransUnion, Equifax and Experian — stopped reporting medical debt under $500 in 2023. But most people with medical debt owe far more than that. The national average for medical balance is $3,100, according to the Consumer Financial Protection Bureau. In California, an estimated 38% of residents carry some type of medical debt; that figure climbs to more than half for low-income residents, according to the California Health Care Foundation.

One key caveat is that patients can only take advantage of this law if the debt is owed directly to a medical provider or collection agency, but not when the debt is charged on a medical credit card or a general credit card.

This new law follows similar ones enacted in a handful of other states, including New York and Colorado. It also mirrors a proposal put forth by the Biden administration to do the same nationwide. However, with a new administration taking over in January, it is unclear whether the federal proposal will go anywhere.

Limón's office explained that under the law patients have the right to sue a debt collector or provider who reports a medical debt to a credit bureau. Consumers may also choose to file a complaint with the state's Department of Financial Protection and Innovation , which has authority over debt collectors. Consumers can also file a complaint with the California Attorney General's office.

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

Most medical debt can no longer hurt credit scores under new California law – San Bernardino Sun

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Whatever percentage of the market that your company is covering, you will need to match 85% of that in areas with high perceived fire danger.

If Farmers had 20%, would need to write 85% of that. Not mandated at this time.

Additionally here are also structures in there where - and it's unclear to me exactly what they mean by insurance bein goffered - we are writing insurance, we're just not covering fire generally speaking. Our policy covers perils other than fire. FAIR covers the rest.

NOt sure how writing those will be interpreted.

Until we see that, we don't know. Trying to come up with strategies.

"I would say also there are things rwittten into that law where we could see costs go through the roof it seems to me." Changing restrictions off raising rates. Even if they are writing, if it's so expensive, it might not help s.

"Until we see that - I would say the jury is out whether it will be a benefit or not."

Currently we are lucky to have FAIR - picking up the fire risk in the areas where traditional insurance market has not been able to provide coverage.

FAIR is good, basic policy. Together, you do

FAIR is not going away - mandated by law. I would say Florida has more problems than California right now - two hurricanes recently. Read average policy in FL is $11,000 per year. HOpefully we wouldn't be going there. Very few policies in Big Bear cost that much.

For those who have had difficulty getting coverage in the past - will this automatically mean they can find options?

Are there any protections for consumers in terms of cost and host expensive these policies are?

Will you be proactively contacting people to get off the FAIR plan?

If there is a better policy available, once we have details - right now, the understanding is still in review stage so until there's a final mandate - and plus, for us, we would have to see – Farmers would have to react and say what they are writing and what is available.

If that single policy plan is more than two policies, I would say the benefit

Regardless - there are two things that affect cost.

"The house we're insuring - a bigger house costs more but the perceived risk. BB has been a high perceived risk for decades. People have been pulling out of here for at least 20 years if not 30. Now it's to the point where it's harder than it's ever been before."

Concern isn't just one house - it's a catastrophic fire that occurred in Paradise or Maui last year - if you get a wind-driven fire. THey're worrying about the fire department burning down. And we have seen huge increases in premium with other companies. Most of those companies do rather than pay that they move to FAIR.

It's more expensive than LA or the desert, it is a higher perceived risk so we are going to pay a premium to list

It doesn't sound like "a miracle' to me - many years ago, California required companies to offer earthquake insurance. And California mandated the cost o the insurance also. So all these companies wrote that coverage and when Northrdige hit, many of those companies went out of business and moved out of CA. Created CA Earthquake Authority. Started offering again. Hard for the govt to mandate private industry that they don't want to do or don't make economic effects. Can have adverse effects also.

This law - although they require it - they aren't mandating cost. If it costs an arm and leg and it's half the price to use FAIR, I don't think it will change much.

My guess is the 30 days gets extended. FARMERs is still actively writing here, they just aren't covering fire. Most companies are not - they just say no. We have seen USAA cancel those wholesale in town. It's a crazy.

Harder now than it's ever been. But there's still insurance available. And writing it in a way where you aren't covering things you don't ned to cover and accept risk with higher deductives.

As long as you own it free and clear, you aren't required to have insurance. If you have a lona, the lender def wants you to have insurance to protect their investment. Also, folks up here - they are second homes and are used for short-term rentals. To get that permit to use you have to show proof of liability insurance. Depends on occupancy and if you have money on the home.

The number of people on California's FAIR plan more than doubled between 2020 and this year, reaching nearly 452,000 policies.

Farmers Insurance Agent

Christopher Mark Thompson

Whatever percentage of the market that your company is covering, you will need to match 85% of that in areas with high perceived fire danger.

If Farmers had 20%, would need to write 85% of that. Not mandated at this time.

Additionally here are also structures in there where - and it's unclear to me exactly what they mean by insurance bein goffered - we are writing insurance, we're just not covering fire generally speaking. Our policy covers perils other than fire. FAIR covers the rest.

NOt sure how writing those will be interpreted.

Until we see that, we don't know. Trying to come up with strategies.

"I would say also there are things written into that law where we could see costs go through the roof, it seems to me."

Changing restrictions off raising rates. Even if they are writing, if it's so expensive, it might not help s.

"Until we see that - I would say the jury is out whether it will be a benefit or not."

Currently we are lucky to have FAIR - picking up the fire risk in the areas where traditional insurance market has not been able to provide coverage.

FAIR is good, basic policy. Together, you do

FAIR is not going away - mandated by law.

"I would say Florida has more problems than California right now,"

- two hurricanes recently. Read average policy in FL is $11,000 per year.

"Hopefully, we wouldn't be going there. Very few policies in Big Bear cost that much."

If there is a better policy available, once we have details - right now, the understanding is still in review stage so until there's a final mandate - and plus, for us, we would have to see – Farmers would have to react and say what they are writing and what is available.

If that single policy plan is more than two policies, I would say the benefit

Regardless - there are two things that affect cost – size of house and perceived risk.

"Big Bear has been a high perceived risk for decades. People have been pulling out of here for at least 20 years if not 30. Now it's to the point where it's harder than it's ever been before."

Concern isn't just one house - it's a catastrophic fire that occurred in Paradise or Maui last year - if you get a wind-driven fire. THey're worrying about the fire department burning down. And we have seen huge increases in premium with other companies.

"It's more expensive than LA or the desert, but it is a higher perceived risk so we are going to pay a premium to live here."

It doesn't sound like "a miracle' to me - many years ago, California required companies to offer earthquake insurance. And California mandated the cost o the insurance also.

"So all these companies wrote that coverage and when Northrdige hit, many of those companies went out of business and moved out of California."

From there, they created CA Earthquake Authority. Started offering again. Hard for the govt to mandate private industry that they don't want to do or don't make economic effects. Can have adverse effects also.

"This law, although they require (coverage), they aren't mandating cost. If it costs an arm and leg and it's half the price to use FAIR, I don't think it will change much."

My guess is the 30 days gets extended.

FARMERs is still actively writing here, they just aren't covering fire. Most companies are not - they just say no.

"It's harder now than it's ever been, but there's still insurance available"

And writing it in a way where you aren't covering things you don't ned to cover and accept risk with higher deductives.

As long as you own it free and clear, you aren't required to have insurance. If you have a loan, the lender def wants you to have insurance to protect their investment. Also, folks up here - they are second homes and are used for short-term rentals. To get that permit to use you have to show proof of liability insurance. Depends on occupancy and if you have money on the home.

The number of people on California's FAIR plan more than doubled between 2020 and this year, reaching nearly 452,000 policies.