Californians finding it hard to keep their homes insured amid skyrocketing rates, canceled policies

ByCarlos Granda KABC logo
Tuesday, March 12, 2024

LOS ANGELES -- More and more Californians are finding it difficult, or even impossible, to keep their homes insured amid skyrocketing rates and policies being canceled by insurance companies.

Eyewitness News looked into the cause of this insurance crisis and what can be done about it.

Homeowners like Susan Bookheimer of Calabasas have seen firsthand the difficulty of keeping your home insured.

"The insurance didn't care," she said. "They increased the rates just an incredible amount of money."

She says that after one insurance company raised her premium to $19,000 a year, she naturally tried to find something less expensive.

"It was terribly hard. I called all of the major insurance companies. None of them would even talk to me. They're not writing policies," said Bookheimer.

She was able to find a different company but just recently that company also raised the premium.

She feels lucky to even have insurance. Thousands of people are getting notices that their polices are either going up or not being renewed at all.

Major insurers such as State Farm stopped accepting new applications in May of last year. Allstate also stopped new policies.

Bookheimer says she cut back vegetation and she keeps the area around her house clear.

Los Angeles County Supervisor Kathryn Barger says her office is getting numerous calls from homeowners who say they are protecting their homes but are still losing their insurance.

"They are doing clearance and I feel that they feel that this is just an excuse for them to cancel their insurance or charge more," said Barger.

Record-breaking wildfire seasons in 2017 and 2018 caused huge losses for the insurance industry in California. In November 2018 alone, insurer losses were more than $12 billion. That's when the number of cancellations started to go up.

In 2019 there were 234,000 cancellations statewide. The number of cancellations dropped during the pandemic to 186,000 and then jumped in 2021 to 241,000.

Insurance companies say because of climate change we are seeing more fires, more floods, more hurricanes.

"It's not great news for consumers but insurers have said they need more price in order to take on the additional risk and loss associated with these climate change-driven, more frequent and severe wildfires," said Dave Jones, the former insurance commissioner for California.

Bookheimer says she sent complaints to the current state insurance commissioner but never heard back.

We tried to interview current insurance commissioner Ricardo Lara. We asked his office several times over the last few weeks but they never made him available.

Barger is asking Lara to find a solution with insurance companies.

"Much of this is being done by an industry that is regulated by the Department of Insurance but is also using their leverage to say we are going to pull out of the state entirely," said Barger.

For many homeowners the insurance of last resort is the California FAIR Plan but that only covers for fire and it's very expensive.

"The problem is they are so inundated right now that it's hard to get any information out of them. You submit the application and you wait and hope to get the quote," said Rick Dinger, an independent insurance agent.