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.
Greg Bolin, the mayor of Paradise, California, said in the five years since his town was ravaged by a massive wildfire many of his residents are still paying the price in their homeowner's insurance. In 2023, companies like Farmers, Allstate, USAA, and State Farm have limited any new business in California.
In addition, seven of the 12 top home insurers in the state have paused or placed harsh restrictions on policyholders and in some cases raised premiums by nearly 10 times.
"They say it's like another mortgage payment," Bolin said.
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.
California is among the 32 states and the District of Columbia that offer a state-run fair plan.
"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."
In September, Gov. Gavin Newsom issued an executive order that asked State Insurance Commissioner Ricardo Lara to implement a sustainable insurance strategy to help build back a failing market.
The proposal, in part, would make it easier for insurance companies to use climate modeling projections for appropriate policy rates and allow companies to charge a higher price for high-risk areas.
Paradise homeowners Shawna and John Love, who rebuilt their home after the fires, told ABC News Live they saw their insurance jump by 1,039%.
"I felt very defeated," Shauna Love said. "[It was] $13,424 for one year for a two bedroom, two bath, 1,400 square foot home on a corner that has exit routes. It's a brand new home. It has all the requirements for fire safety."
Another homeowner, Heidi Lange, said she had to file an appeal after she was denied coverage only to find out the insurance company sent a renewal offer increasing from $1,191 a year to $9,754 a year.
"It took my breath away, to be quite frank, I couldn't afford that if I wanted to," she told ABC News Live.
The situation has gotten so bad for Paradise residents that they have resorted to other short-term solutions to protect their homes, including barriers and concrete around their homes.
"For many people, it was it was a very tough decision to come back or not. For me and my wife, we're just we're going back. And that's where we want to be. That's home," Bolin said.
Officials in Colorado, which has also seen a rise in massive wildfires, are looking to avoid the mistakes that California made. The private market is still intact in the state, however, Colorado Insurance Commissioner Michael Conway, is looking to implement a state plan by Jan. 1, 2025.
Conway told ABC News Live that he knows there is a potential for those private companies to pull out because of the increased climate dangers that threaten the state.
"We have to find new solutions for those problems to ensure that we can have that robust competitive marketplace that everybody wants, both the consumers and the industry," he said. "I think you're going to see regulators start to wrap their arms around what that modeling means and how it's impacting our markets. And I think it's imperative for us to do that."
Keys said that Colorado has a good chance of getting their program done right.
"So I think it's a state that has experience with disasters, has awareness of disasters, but has the benefit of putting one of these programs together in a way that's in a slightly less pressurized setting," he said.