Increasing risk of wildfires in California

Climate change and catastrophic wildfires are redefining California's landscape and home insurance market. Insurance companies are struggling to afford the growing risk of wildfires, with losses equivalent to two decades of profits in 2017 and 2018. California's insurance pricing system, which looks backwards at past losses to determine risk, is ill-suited for rapidly changing and increasing risks. Additionally, insurers cannot pass on the cost of reinsurance, further burdening them. As a result, insurers like Allstate and State Farm have stopped selling new homeowners policies in California. This poses challenges to homeowners, as insurance availability is a crucial climate adaptation strategy to protect their valuable assets.