Former California insurance coverage commissioner David Jones described the L.A. space firestorms in January as a “canary in the coal mine” warning for local weather change that can carry extra catastrophic fires all-year and push the property and casualty insurance coverage trade to the brink of a monetary disaster.
“Climate change is the canary in the coal mine, and the canary is dying,” Jones stated. “You can give the canary mouth-to-mouth resuscitation, but ultimately it’s going to be killed by climate change.”
Jones, who was Insurance coverage Commissioner from 2011 to 2019, helped regulate California’s response to more and more lethal and harmful catastrophic wildfires throughout his two-term tenure, when greater than 1.4 million acres burned all through the state.
The 63-year-old Jones, now the director of the Local weather Threat Initiative at UC Berkeley’s Middle for Legislation, Vitality and the Surroundings, maintains that California is headed for a “very grim” future with extra L.A.-like firestorms.
He blames local weather change for firestorms like those that erupted in January in Los Angeles County. Such fires are occurring extra steadily and exterior the standard summer season and fall fireplace seasons.
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Local weather change refers to long-term shifts in temperatures and climate patterns worldwide.
Jones cited as proof the rising variety of residential insurance policies in pressure by the California FAIR Plan, the state’s property insurer of final resort. Mainstream property insurers are abandoning ZIP codes in fire-prone areas, leaving policyholders no different choice however to show to the FAIR Plan.
In 2015, there have been 141,391 residential policyholders within the FAIR Plan, based on statistics offered by the California Division of Insurance coverage. The variety of policyholders grew to 189,790 on the finish of 2019 — additionally the tip of Jones’ second time period as commissioner. Since then, the variety of policyholders has grown to 220,091 in 2020, and risen greater than 127% to 501,379 by the tip of final 12 months, based on statistics offered by the FAIR Plan. The non-public affiliation declined to share knowledge previous to 2020.
Rows of destroyed properties in the course of the Palisades Fireplace within the Alphabet Streets neighborhood of Pacific Palisades, CA, on Thursday, January 9, 2025. (Photograph by Jeff Gritchen, Orange County Register/SCNG)
We requested Jones concerning the state of house owners insurance coverage in California, and what must be executed to repair it. His solutions have been edited for readability and size.
Q: Is California the one place experiencing a disaster in householders’ insurance coverage?
A: California is just not the one state the place insurance coverage availability and pricing is changing into an actual problem, and actually, a disaster.
There are at the very least 18 states, together with regulated states and unregulated states, the place this can be a drawback. It’s occurring in various levels of severity throughout the US.
What is occurring is that, because of local weather change, we’re having extra excessive and extreme weather-related occasions which can be killing extra Individuals, injuring extra Individuals, destroying extra Individuals’ properties and inflicting insurance coverage firms to pay out bigger and bigger quantities.
And insurance coverage is a enterprise, and the way in which that it responds to elevated losses is it will increase value and it reduces the writing of insurance coverage, and it’s doing each these issues in at the very least 18 states throughout the nation.
Q: How massive of an issue are non-renewals and insurance coverage pricing?
A: Two experiences had been launched final 12 months — the U.S. Senate Finances Committee in December 2024, and the U.S. Treasury Division’s Federal Insurance coverage Workplace in January 2025 — concluded there’s a drawback throughout the complete nation.
Within the states the place insurance coverage costs are going up, and insurance coverage is changing into much less out there because of non-renewals or new insurance coverage isn’t being written, these are the exact same locations the place extra excessive and extreme weather-related occasions are touchdown.
All I can inform you is what the info says. The experiences are primarily based on a nationwide survey of the insurance coverage firms during the last 5 years. It’s the very best knowledge units out there, and the numbers don’t lie.
Q: Are you seeing local weather change trigger increased insurance coverage losses and householders getting shifted to the FAIR Plan?
David Jones, director of the Local weather Threat Initiative at UC Berkeley’s Middle for Legislation, Vitality and the Surroundings, and former state insurance coverage commissioner from 2011-2019.
A: In my second time period, starting in 2015, we began seeing a gradual however vital uptick in FAIR Plan policyholder counts. That’s a bellwether, proper?
The variety of FAIR Plan policyholders almost tripled since I left workplace. Why? As a result of insurers are more and more concluding that they will’t write insurance coverage and make cash, and they also’re non-renewing, and that’s despite the fact that they’re getting substantial charge will increase.
Over the past a number of years, we’ve got given the insurers charge will increase. They must justify the speed will increase, however they are usually, let’s say, unbashful in asking for substantial will increase.
While you begin seeing extra Californians pressured to the FAIR Plan for insurance coverage, what that tells you is that they’ve been non-renewed, or been instructed by the non-public insurers that they aren’t going to put in writing them insurance coverage. We additionally began see large wildfires.
It’s actually gotten worse within the final 5 – 6 years.
Q: The image you’re portray is that it’s getting worse, proper?
A: It’s getting worse. We’re marching towards an uninsurable future on this nation, as a result of we’re not doing sufficient, quick sufficient, about local weather change. There’s not some magic wand we will wave with regard to insurance coverage to make issues go away.
Q: What could be executed to decelerate the rise in losses?
A: One thing that’s actually irritating for Californians, and rightfully so, is that there are confirmed, empirically-based, scientifically primarily based mitigation measures that scale back the chance of loss.
Within the wildfire context, there may be residence hardening and defensible area. This contains utilizing extra fire-resistant supplies to your roof, having shatter-resistant glass, in order that when the warmth of the hearth approaches your private home, your home windows don’t shatter, the embers don’t fly in, defending the eaves of the house, in order that embers don’t get into the attic … Not having any hooked up picket buildings, having a 5-foot zone across the residence that’s away from any vegetation, having 30 or 100 toes the place vegetation is dramatically diminished, proper? This can be a partial record.
There’s a protracted record of this stuff which can be accepted by fireplace officers, fireplace chiefs, fireplace professionals. No disagreement about these items, proper?
We have to go a state regulation that requires the insurers’ laptop fashions to account for confirmed mitigation measures, since they’re not keen to do it voluntarily. My successor — Ricardo Lara — adopted a regulation giving individuals a reduction for residence hardening defensible area, and for being in a hearth sensible group. That’s nice, you get a reduction.
However the low cost doesn’t matter in the event that they gained’t write or renew your insurance coverage.
Two payments have been launched in Sacramento to create incentives for residence hardening in opposition to wildfires.
Q: Ought to householders get credit score on their insurance policies for residence hardening?
A: We’re spending billions of {dollars} on this, and also you get no credit score for it within the selections the insurance coverage firms make once they write or renew your insurance coverage. That’s actually outrageous. And the insurance coverage commissioner can’t change that himself or herself, as a result of insurance coverage commissioners don’t management underwriting.
So, the one method to repair this drawback, that I’ve recognized, is you’d must go a state regulation that requires the fashions they use to determine whether or not to put in writing or renew insurance coverage to account for confirmed mitigation.
Q: Early January is just not fireplace season in L.A. Are we going to see extra wildfires year-round?
A: I feel the longer term may be very grim. I feel that we’ve had a catastrophic wildfire in January, and we may have any variety of catastrophic wildfires later within the 12 months. So, it’s a really grim future.
Initially Printed: April 7, 2025 at 7:07 AM PDT