The ESG Initiative at the Wharton School
Fire prone California homeowners left behind as insurance companies drop coverage
Outlet: ABC News
Residents in Paradise, California, said they’ve seen their rates skyrocket.
As climate change continues to cause disasters across the country, some people in the most high-risk areas that have already seen massive destruction say they are being left behind.
Experts say the situation has been compounded for a number of reasons, including insurers arguing that the risk of doing business there is just too high due to the elevated risk of wildfires and California laws that restrict how the insurance companies can price out their policies.
“So in a period of high inflation, all the insurers are bumping up against this limit. And what that’s led to is insurers leaving the state in a very public way and trying to renegotiate the terms under which they can operate,” Ben Keys, an assistant professor of real estate at the Wharton School at the University of Pennsylvania, told ABC News Live. “They want to be able to raise premiums much more dramatically than state rules that currently allow them to.”