California Fires Expose a $1 Trillion Hole in US Home Insurance
Homeowners in increasingly risky areas can’t obtain adequate coverage as insurers flee the state to avoid losses.
Expensive kindling.
Photographer: Mario Tama/Getty Images
The wildfires terrorizing Los Angeles this week have been like something out of a movie: vast, fast-moving, unpredictable, merciless. Their scope and nature have surprised even fire-jaded California. They are also evidence of the sort of consequences that can be expected as the planet continues to heat up, consequences for which traditional risk-management tools — like, say, home insurance — are increasingly obsolete.
The fires didn’t even exist on Tuesday morning. The only hint of what was to come were forecasts for some of the strongest and most dangerous Santa Ana winds on record to barrel out of the Great Basin and into Southern California. Those hurricane-force blasts can be destructive enough. But these coincided with drought conditions, dry vegetation, low humidity and relatively high air temperatures, leading the National Weather Service to issue an “extremely critical” fire-weather warning for the area around Los Angeles, the first-ever such warning in the lower 48 US states in January.