In San Mateo County, leaders have asked Gov. Gavin Newsom to declare a state of emergency over the home insurance crisis as homeowners rush to find solutions.
In a remote part of the county, there’s a good chance you’ll find Patricia O’Coffey outside her home, hard at work on a number of tasks to ensure there’s enough defensible space.
“It gets harder every year. That goes for the entire community. A lot of us moved here when we were much younger,” she said.
Keeping her house as fireproof as possible is a routine job for her. But it’s not the threat of fire that keeps her worried.
“We’re not going to renew you,” she said.
Those are the words she heard in 2019 from her old insurance company.
“We have been working with Allstate for 40 years – this house, a previous house and all of our vehicles and houses. And just two weeks before it was time to pay for the renewal, we get the letter saying they are not going to renew us. No reason is given. Just: ‘We’re not going to renew you,'” O’Coffey said. “I mean, when we got canceled by Allstate, I think we paid less than $4,000. And that went up to $20,000.”
Ultimately, she was able to get a new plan with State Farm, with a premium of about $6,000. But as insurers including State Farm leave California, and others skyrocket premiums and limit coverage, O’Coffey fears she will be dropped again.
“Thousands of people lose their insurance on a regular basis,” she said. ‘It’s very nerve-wracking. You never know. If you have a mortgage, you must also have insurance.’
It’s not just people living in some of the more fire-prone parts of the county and state who are at risk of losing their policies, whether or not their policies have already been canceled.
“People face this problem and they face it every day,” said San Mateo County Supervisor Ray Mueller. “We need help.”
He says he regularly hears from people in his district who are feeling the effects of the insurance crisis.
“I just want to figure out how we can move forward and deploy resources to help them,” he said.
That’s why he and the San Mateo County Board of Supervisors joined the growing list of California counties to urge Governor Newsom to declare a state of emergency over California’s insurance crisis.
“There is an emergency happening right now. It may not be visible to the eye, but people in our district are affected by it every day,” he said. “It allows the state to effectively bypass the regulatory process and continue to implement measures and requirements in the insurance market. That’s what we really need.”
According to the Department of Insurance, seven of the 12 largest insurance companies operating in California have either reduced existing policies or stopped writing new policies since 2022.
The department is working to implement a plan it says will expand coverage and bring insurance companies back to California. However, Mueller says a solution needs to come sooner.
“What is happening now is that the state, through the Department of Insurance, has initiated a process to address this crisis. But the implementation of what comes out of it won’t come into effect until 2026, which is far too early. in the future,” he said. “If people have to wait until 2026, that means I’m going to have residents in my district who have to go without insurance.”
O’Coffey says she understands why insurance companies are raising rates to some extent. The climate is changing. Wildfires have ravaged California in recent years. However, she says the status quo is not acceptable.
Over the course of her 30 years living in the mountains, she says there have been two fires. She says Cal Fire’s CZU department has pushed residents to change their approach to caring for their properties.
“It’s been a wake-up call for everyone. Most people before weren’t into hardening their homes and defensible space. They are now,” she said.
Her community has since taken great proactive steps to become a nationally recognized Fire Wise community as well.
“It feels like the insurance companies are making these arbitrary decisions, not based on the facts of the actual situation on the ground,” she said. “They don’t come here to inspect my property before they decide to renew or terminate me.”
At worst, she will have to leave the place she never intended to leave – something many people facing this threat may also be considering.
“If they can’t get insurance, they will leave California. That will impact California’s economy and our future,” she said.
The insurance issue also has a significant impact on home sales. This is evident from a new study by the California Association of Realtors:
13% of agents, or one in seven, reported that a sale fell outside of escrow because the buyer couldn’t find insurance.
That number has almost doubled year-on-year. It’s gotten so bad that the Association added a contingency to home sales last summer that allows the buyer to cancel the contract if they’re not satisfied with the insurance options available.
