For many people, their home is everything; not just a place of residence, but a repository for a lifetime's worth of memories and belongings, as well as a financial nest egg in and of itself, and not being able to insure it against fires is… terrifying.
Mendocino County is in the midst of a homeowner's insurance crisis, and while the problem is statewide, Mendocino is one of the 28 counties ranked as distressed, meaning that insurance companies have rated more than 20% of the properties here at high, or very high, risk of wildfire.
I spoke with Cindy Nelson from the Covelo Fire Protection District on the importance of defensible space and home hardening, as well as the challenges that come along with implementing such programs in remote areas like Covelo.
Nelson recalled her 23 years of employment at Friedman’s Home Improvement, and how she knew many victims of the 2017 Redwood Valley and Potter Valley personally. “I worked at Friedman's, I know what they went through, the aftermath of that with insurance. I know that my insurance broker who has been doing this for the majority of his life, actually had his own insurance canceled because he wasn't hit by those fires, but he lived in the Deerwood area, and they considered that. a high fire risk area, so they canceled his insurance. He's like, I'm a broker. What am I supposed to do?
"I definitely believe that creating defensible space is absolutely the way to go.
"The Mendocino Fire Safe Council sent a couple of people up, and they've been to a couple of our board meetings and they had a program where grant money was available to help people create defensible space… elderly, disabled, low income. And I mean, it's Covelo. There's a lot of elders who just don't have the ability to do that. So they were willing to pay people to go out and create defensible space, you know, if you're talking about 150 ft, they start at the house and they work their way out. The problem was we could not find the bodies to do the work. So that's a whole different sort of crisis right there.”
In response to the crisis, the California State Department of Insurance is rolling out something called the Sustainable Insurance Strategy. I spoke directly with Deputy Insurance Commissioner Michael Soller at the Department to learn more about how the sustainable insurance strategy will help folks in Mendocino County access affordable home insurance soon. Lara said: "Over the past several years, we've been meeting with thousands of people across the state, including in Mendocino, and hearing about growing frustration about the inability to get insurance. For many people they can't find insurance from any company, and the only option is the California Fair plan, which is limited coverage that comes at a higher cost.
"Insurance Commissioner Ricardo Lara over the past year has introduced a series of reforms that address problems that we've seen in California for decades, but we're addressing them for the first time now.
"I think a lot of people don't realize that in California, under our 30-year-old rules, there's no requirement for insurance companies to write policies anywhere in the state, and what we've seen is that many companies have paused writing or pulled out of communities, stopped writing altogether. And that's just causing confusion, causing chaos, and it's leading to real problems in Mendocino and other counties.
"Insurance Commissioner Lara announced just this month that we've completed a really important regulation that for the first time is going to require
insurance companies to write more policies in what we call wildfire distressed areas. A wildfire distressed area is really a community, a county or a zip code where the number of Fair Plan policies has gone up and the Fair Plan is more than 15% of the policies in that entire zip code or it's an entire county like Mendocino, where more than 20% of the homes are rated at high fire risk by insurance companies, and what that means is that insurance companies haven't been writing those homes in those areas and that's going to change as we implement this new regulation in the coming months.
"Cal Poly Humboldt is leading an effort to make recommendations to Insurance Commissioner Lara about the next steps that he could take to develop a public wildfire catastrophe model, that might be a new concept to people; it is about using technology, using data to look ahead at the risks that California faces as we see wildfire disasters growing, but we also see billions of dollars being spent at all levels on wildfire mitigation from homeowners spending money to local fire chiefs, utilities spending funds, the forest service and federal government and state government. For the first time that all is going to be tracked, going to be counted, and people need to see the benefits, and that's one of the changes that Commissioner Lara is implementing for insurance.
"Right now there's no public model that exists.
We need to start taking those steps to do that, to build something that's going to be useful for communities, for insurance, fire chiefs, multiple users, but right now we have a problem, we have a crisis and so the regulation that Commissioner Lara just implemented will require insurance companies that use models today to look at the benefits of wildfire mitigation. Those will start to get reflected in the rates for the first time and over time we expect to see insurance rates become more stable, become more predictable, and that as we become safer, as we make our communities safer, we even start to see insurance rates fall. We bend the curve instead of the record increases that we've been seeing recently under our outdated regulations, we will start to get some relief for people.