The Home Insurance Crisis: A Conversation with Florida
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playing May 2nd through June 8th. More info at berkeleyrep.org. From KQED. From KQED in San Francisco, I'm Alexis Madrigal. The world is warming, and in California and Florida, insurers are jacking up prices, refusing coverage, or fleeing the states entirely because of the massive cost from wildfire and hurricane damage. To

Today, we team up again with Florida public radio station WLRN to examine how our two states have become the epicenters of the home insurance crisis. We'll talk about the impact of the L.A. fires and discuss both states attempts to fix their insurance markets. So coming up next after this news.

Welcome to Forum. I'm Alexis Madrigal. California and Florida sit on opposite ends of the country, but both are at the center of a growing home insurance crisis, in part because both states are exposed to serious risks from destructive climate change-boosted disasters.

Later in the show, we'll sync up with Florida public radio station WLRN to talk about the situation in the southeast. But first, we're going to talk about the Los Angeles fires and get an update on where our state's home insurance market is. We're joined this morning by KQED science reporter Danielle Venton. Welcome. Good morning.

And we're also joined by David Brancaccio, host and senior editor of Marketplace Morning Report, who also lost his home to the fire in Altadena. We're so sorry, David, and we really want to thank you for joining us to talk about your experience. Oh, thanks, Alexis. Great to be here, though.

Daniel, after the L.A. fires, some of the experts that we talked to on the show were talking about how the payouts that would be necessary from those fires might break the entire home insurance system in California. So three months on, what are we seeing?

People who lost their homes and who have claims are getting paid. So the system is not broken. Those people are going to be getting their payouts. However, it is strained. And what insurance companies and the insurance industry in California are really worried about is what would happen if we had another bad fire season, say this summer or this fall. What's the newest estimate for what the total damages are going to be?

David, you can correct me if you have more recent data, but I believe it's about $30 billion. And in the initial destruction, we saw estimates ranging from kind of a low end of $10 billion to an upper end of $50 billion. So the updated numbers seem to be right in the middle of there. Yeah.

David, so let's talk a little bit about what happened. Can you just tell us your story? Like you had just moved out to Altadena, as I understand it. Yeah. I mean, luck of the draw there, right? We wanted to move west to be closer to kids and, uh,

marketplace has a newsroom out here so why not and we could have lived anywhere i suppose from the oregon border to the mexican border we chose let me see oh altadena and it's a fabulous community you've been reading about if you've never visited it it's very diverse there's a lot of artists there there's a lot of community cohesiveness so in in what was it november november this last one is when we closed on the house and two months and a day later yeah it was gone um but

where there are milestones we've already reached. The US Army Corps of Engineers, their contractor was there a week ago Monday and they back-hoed everything away and now it's a plot of dirt. So you could say that's a blank canvas. And we have spent our last three months dealing with grand problems, emotional challenges sometimes, to silly problems. I don't know if you heard me on the air this week, but I've been on a three month quest

to not get charged for my internet router, which was, I found it's charred hulk. It was one of the few things I found in the debris. But I had California Fair. That was the only one that was really open to us when we bought in November.

And remind people what that is, just if they've forgotten. California Fair Plan is the state fire plan of last resort. When the private companies won't do it, the state has set up this system. It's not state money, but it's state-run.

and it is not cheap and the thing a lot of people don't know is you also have to buy regular house insurance at the regular price from a different provider who just says we're not gonna deal with your fire risk. So we had two of these policies and you know it's been an extra job bird-dogging all of that stuff and the check doesn't just show up. So I've learned a lot of things. I have covered Alexis

I've covered wildfire insurance stories. I was down in San Diego some years ago when there was a terrible wildfire for public television, and I thought I knew a lot. I didn't know much. For instance, if you have a mortgage on the property that burned, which was our case, if and when insurance pays, the check goes to the mortgage holder, to the bank, and they hold it.

and you then go hat in hand when you finally have a contractor and a plan and say, "Can we have some of it back?" And it's a clumsy process. And I've had a bunch of Altadenans come to me annoyed at the following detail. I hadn't noticed it myself, but it's true. Although you're entitled while the bank holds sometimes hundreds of thousands of dollars that the insurance company may have paid,

The interest rate they hold it at is minuscule, barely exists. There is at least one state, Colorado, where they have to pay real interest. I mean, that could be tens of thousands of dollars after a year and a half. And a state assembly person here in Southern California has introduced some legislation to maybe change that. But it's been a learning experience, my friend. Yeah.

Daniel, at the sort of system level, how is FAIR holding up? I mean, it obviously hasn't. It hasn't collapsed, but there actually have been some actions that have needed to be taken to shore it up, right?

Yeah. So we've known for a while that the fair plan was one big fire away from possibly running out of money. They say that everyone who is insured with them will get paid, but they are concerned about what would happen in the event of another fire. So they are...

asking for backup money in the statutes that dictate how they're run, they have the option of getting effectively a bailout from other insurance companies. And in an agreement hammered out with California's Department of Insurance a couple months ago, half of that

bailout is going to be passed on to California policyholders. So that'll be that'll be $50 million and then $50 million will be paid by the regular insurance companies. Yeah. You know, it's there's sort of the official version of the story, right, David, that, you know, things are things are fine. The system held in this case is

But what about actually when you yourself or other people are talking about how to get the actual money into your bank account or I suppose into the mortgage holder's bank account? How easy is that proving to be? You know, it's kind of I feel like my experience with health insurance leads me to believe that maybe there's more quirks than we expect.

Well, let me answer that two ways. First of all, yes, there's nothing connected to the loss of our house in the fire that did not require multiple interventions. You think you finished it and then you got to go back and start all over. California Fair is besieged by claims. I mean, let's remember 16,000 structures, most of them homes, were destroyed in both the Southern California fires in January. So there's just a lot of work.

and I think a lot of the people there are harried. We've dealt with people who have been trying to do the right thing, but I had an experience doing some reporting for us. You'll hear some of that next week.

There is the guy that the betting is in my town of Altadena will rebuild his destroyed home first. He'll probably be the first one that gets back into his house. He lost the whole thing. He's got four kids. He's a guy, used to be a mortgage broker, then became a developer and is a contractor. So here's a guy who knows his way around debt.

this field. This is his system. Yeah. And so he didn't have California fair. He had regular private insurance, which prior to the fire, I thought that's what I want. And he had the good kind of policy, the one that will pay whatever it takes for him to rebuild. So he got the, he said hundreds of pages of documents that explain what they are offering him to rebuild.

And I never could have waited through that. I mean, it's way beyond me. Some people hire what's called a public adjuster. You pay them money and they do this for you. He didn't need one. He's a pro. He figured out that the initial offer, I won't say which private company,

was $225 a square foot. Now, if you're following this at all, before the fires in California, about $400 a square foot to rebuild. Probably now with all this demand, is it going to be $600, $700 a square foot? I hope it's not higher because then people won't be able to. So, I mean, that's the micro level of stuff that you have to deal with. Another big piece of this,

You know, when I learned that our house had gone, we were mercifully on the other side of the country packing up the rest of our stuff to send to California, which therefore that stuff wasn't lost. But I thought, oh my goodness, we lost that house. Why couldn't I have been one of the lucky ones that escaped the fire? People who are in the fire zone whose houses didn't burn down, that's a very hard place to be because the insurance companies are being very...

tough on them is one way to think about it. All this smoke damage and they're not getting much recognition, they're not getting much pity from the community, although my heart goes out to them because they worry about toxics in their homes and the California Insurance Commissioner had to clarify the following recently, had to say, "Hey,

You, a homeowner whose house didn't burn down, are entitled to a rigorous inspection of your situation. Is it toxic? What has to be cleaned? Because in some cases, people are getting these fly-by-night people, sometimes just house cleaners, to come by without expertise to do the evaluation. And you're entitled to much more than that. That's so, you know, Daniel, this is an interesting...

topic, right? I mean, we know that smoke contains all, you know, the residue of things that have been burned in an urban area. This means that it contains, you know, lots of the plastics that's burned, lots of other things. Have we encountered this kind of situation before? Or is this at least semi-novel, the amount of smoke damage that might

need to be dealt with in California? Well, I think what's unique in LA right now is the scale of the damage and the urban nature of those fires. I mean, you know, they really weren't wildfires. They were urban conflagrations. And so the toxic residue that are inside those unburned homes is much more intense than it might be in, say, a rural community where it was largely grass, brush, trees being burned.

It is an understood problem that smoke damage sometimes is not covered by people's policies. And sometimes the fair plan doesn't cover it. And so that puts people at a real hardship when they're trying to get their lives protected.

Yeah.

We're talking about the home insurance crisis, starting off here with California. In a bit, we're going to sync up with actually Florida radio station WLRN. We're joined first by Danielle Venton, science reporter with KQED News, and David Brancaccio, host and senior editor of Marketplace Morning Report, who also lost his home in the Altadena fires.

We'd love to hear from you. What do you think California has done right or wrong on home insurance? If you do want to talk with some folks in Florida, what do you want them to know about how our insurance system has or has not worked out? You can give us a call. The number is 866-733-6786. Maybe you know a little bit about California.

fighting to keep your home insured or fighting to get an insurance payout, we'd love to hear about that experience as well. Again, the number is 866-733-6786. You can email your comments and questions to forum at kqed.org. Find us on all the social media things, Blue Sky, Instagram, the Discord. We're kqedforum.

Danielle, I wanted to ask you about State Farm, which has been in the news because they're asking for a big rate hike. I think they're also the largest private insurer in California, right? Tell me more about what's going on with State Farm. Yeah. So State Farm is the largest insurer. They insure about one in five homes. So keeping them in financial health is in everybody's interest for a stable market. They are really...

Right.

So there's some news on this. Last week, there was a hearing because a public intervener challenged the... That's like a third party. That's like a third party. Yeah.

This gets a little bit complicated, but as part of California's insurance regulations, third party interveners have the right to protest basically in court and recoup for their costs for doing that. So there's kind of one big group that does effectively all of the intervening. Yeah.

So there was three parties in court. There was the state, and there was State Farm, and then there was Consumer Watchdog, the interveners. So both the state and State Farm want these emergency rate hikes to go through, and the interveners were saying they shouldn't go through. The increase had been negotiated to 17% down from the requested 22%.

And, you know, we still don't know what's going to happen. There's a couple more weeks for some more papers to be filed and then a judge will make a decision. But there is a

concern that if State Farm doesn't get this money that they say they need, that they'll be less willing to stay in the state. And their credit rating has already been downgraded. And if it got downgraded further, there's a concern that banks wouldn't approve mortgages for homes that are insured by State Farm because they could risk insolvency. Right. You know, Dave Brancaccio,

As an economics reporter, you look at the way our home insurance market works in California, where we've got these private insurers doing a variety of things. And then we've got this fair plan, which has been soaking up more and more people as insurers have dropped people or refused to insure in certain areas.

should we be doing something different? Like, has this experience both as an economically, you know, the economic supporter side of you and also the fair plan member side of you, has it made you think differently about the sort of just overall structure of California's home insurance? Well, indeed, Alexis. In fact, when Danielle mentioned, uh,

the idea that maybe banks would pull out. You know who said that on Capitol Hill was the most powerful single economic figure in America was Jay Powell at the Fed said that if areas that are exposed to

Climate change and wildfires don't figure out their insurance market. Banks will pull out and you will not be able to get mortgages in large parts of the country. I'm paraphrasing. So I was a cub reporter on a station called KQED in the Bay Area in 1988. Welcome back then. Yes, indeed. Prop 103 was passed. I remember covering that.

We have a very heavily regulated insurance market here in California. And if you're a consumer for many years, that's to your benefit. The insurance companies hate it, right? I mean, it's this big process that Danielle was just talking about to beg for a rate increase. And the idea of...

insurance companies pulling out of the market, many regard as a game of chicken to get California to rethink the level of regulation. Now, to be fair, I mean, we have UCLA data that show that the fires in January down here burned longer and more intensely because of climate change. So it is getting more intense and the costs are getting higher for insurance companies. But it may be

that for a functioning insurance market to grow out of this mess, that there's going to have to be some structural changes. Because look, if you're like me, I want to rebuild. I want to do it for myself. I want to do it for my neighbors. I want that community.

to not being taken over by large hedge fund developers who remake the complexion of that whole community. But if I'm going to really rebuild, I've got to know I've got to get insurance. I need to know I can get insurance in the future. And that is, at the moment, a question mark, even though when I bought that house just a couple months earlier,

My policy said that on a scale of 1 to 10 my fire risk was only a 4. Okay, not I didn't build in a canyon or a high fire zone I built in a normal suburban generally flat area yet. Look what happens these days so the market itself may need to without betraying the trust of consumers We may need an overhaul

We're talking about the home insurance crisis with David Brancaccio, host and senior editor of Marketplace Morning Report. Thanks so much for joining us this morning, David. A lot of fun.

Sticking with us across the break, we've got Danielle Vettin, science reporter with KQED News. And of course, after this short break, we're going to sync up with Florida radio station WLRN, another state that is part of this home insurance crisis. We want to hear from you. The number is 866-733-6786. I'm Alexis Madrigal. Stay tuned. Be back with more.

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This is the Florida Roundup. I'm Tom Hudson, and I want to welcome listeners of KQED in San Francisco to the Florida Roundup. From the Golden State to the Sunshine State, we are simulcasting this part of our program with KQED's daily program, Forum, which is live in San Francisco, and Alexis Magrille. Alexis, welcome back to the program. Nice to connect with you. Yeah, Tom, great to reconnect as well. I know people are very excited to kind of

be able to do a little compare and contrast between the states. For folks listening in California, of course, the number to call is 866-733-6786, or you can email us, forum at kqed.org.

You know, we did this, I don't know, around Election Day, I think it was, right, Alexis? And, you know, we've been continuing conversations, and we thought this home insurance topic is really one that these two states certainly do share. And so our Florida line is open. If you're listening here in the Sunshine State, 305-995-1800, 305-995-1800, or the Florida inbox is radio at thefloridaroundup.org. Yeah.

And, of course, I am here as well with Danielle Vinton, KQED science reporter, who has been covering this home insurance crisis as well as climate change for the station. You know, I'd love to hear from you. I mean, we're just coming out of a segment in which we were talking about what's happened with the L.A. fires. I know there's also been a ton of changes to insurance in Florida. Talk to me about sort of where you all are at. Like, reset us for a California listener.

Yeah, you know, and part of this conversation, I'd love to kind of hear how California obviously has been dealing with the aftermath of the wildfires and what homeowners are expecting when they open up, you know, next year's premium invoices. Here in Florida, boy, we went through several years of the home insurance market on the cliff of collapse.

And homeowners dealing with year-over-year double-digit increases in premium costs, you know, 20%, 30%, or even getting kicked out of their insurance because the companies no longer wanted to underwrite the risk of their homes.

What's happened lately is because of some reforms and some other changes in the insurance market, at least this year, Alexis and Danielle, what we've seen is a much lower rate of increase in insurance rates. And that's been trumpeted by our governor, Governor DeSantis, and other supporters as a real success story of repairing what was a home insurance market that was about ready to fall apart for homeowners. Yeah.

I mean, do you buy that that is really working, Tom?

Well, I mean, we'll see. We've seen more than, I think, like a dozen new insurance companies enter the market, which is a sign of a much healthier market that companies want to take the risk and underwrite Florida homes. You know, but there's a big difference between seeing a drop in an insurance rate and that translating into an insurance premium, what homeowners actually have to pay, because we have seen home prices balloon. We've obviously seen inflation impact and, you know, maybe coverage rates drop.

have actually gone down. But this is the result of years of this home insurance being a central issue and one of the top issues for Florida voters. So I'm wondering, in California, after the aftermath of the Los Angeles wildfires, how home insurance is rating for California voters. Is this a big issue for them as they look at state lawmakers to have some kind of response?

Danielle, why don't you take that one? Yeah. So the problems of California insurance, the California insurance market were recognized a long time before these fires. And these fires have just put this issue on steroids. It is true that we have a highly regulated insurance system. And so and that has...

you could say artificially depressed prices here. I was looking up some stats and for a modest dwelling, you know, a Californian would pay an average of $1,300 a year for insurance, whereas a Floridian would pay, you know, more than almost $3,500. So, you know, our insurance costs are a lot less than Florida, but that has...

you know but that's because market forces haven't been allowed to totally be at work so we're in the process of majorly rehauling overhauling our regulations to be more pro-business and that process is still playing out you know those those just those regulations just went on the books um in the end of december and and they they're they're still playing out you know we haven't really seen exactly how this is going to all shake out yet and

And the expectation is what? That market forces would do what to insurance rates for that average California homeowner? Slow down the growth rate or actually bring it down?

People have different opinions on this. So I think broadly, the expectation is that costs need to go up to more accurately reflect the price of the risk. But some people tell me that they think prices may go down because because, you know, they're at a high right now because insurance companies are concerned that they won't be able to, you know, that just that.

The California market is too unfriendly. So we're going to have to see. But the hope is that rates will not continue to go up at the same pace that they have. We've actually got a caller, Scott, in Calistoga on this topic. Welcome, Scott. Thank you. Oh, go ahead. You're on.

Yes, I would agree with your expert saying that I really do believe we need market forces to prevail. I don't understand. I mean, it's hard for me.

to accept that the insurance companies should take on all the risk. I also believe that within our communities, there are programs like Firewise USA where whole communities are taking more responsibility for hardening their homes and their neighborhoods. And I think that has to happen too. We all have to join in and address the issue. Well,

Well, if I could say, I think, Scott, you just got right to the punchline, which is that these costs are going up because risk is going up and damage is going up. And we know that there are many things we can do to make our communities and our homes more safe from fire. And that's the only way we're going to get out of this doom spiral of, you know, less availability and increase in costs is by making communities safer.

Yeah, and Florida has had a similar response of hardening homes and providing subsidies. Of course, for hurricanes, right?

And there have been state programs and our state programs that the legislature has expanded dollars toward to help Florida homeowners harden their homes. And then, of course, you know, after a home perhaps is severely damaged or destroyed after a storm.

trying to hold the homeowner or perhaps the builder to a new level of structural safety, but yet still rebuilding in the places where these storms sometimes come. Margaret is listening here in Palatka in north central Florida. Margaret, you're on the radio. Go ahead.

Yes. As I was telling the young lady that answered my call, my concern is, like, I'm a senior citizen. My husband and I are retired on a fixed income. And we have a small home in Palatka. I'd say it's probably 1,300 square feet, something like that. And our homeowner's premium is now over $4,000 a year.

If it keeps going like this, we may not be able to afford to insure our home. And I know, you know, you look at the opposite. People say, well, if you don't have insurance, it's going to cost you so much to replace it. But if you don't have it every month, you can't do it. Yeah. Margaret, thanks for calling. And I'll note that Palatka is not on the coastline, right? It's not on sand and beach land.

here in Florida. And what Margaret talks about, we've heard this a lot in Florida, at least, about some folks who are in a position who own their homes, they don't have a mortgage, who will self-insure, right? Going bare, right? Isn't that the- Going bare, exactly right. That's right. And say, instead of the $4,000 a year, maybe try to stick some of that into a savings account should and if they need to do significant repairs after some kind of insurable event. Yeah.

I mean, Danielle, I'm curious what we have seen, at least, you know, on the show and what we've heard from folks is people don't want to go bare, but they're being dropped by their insurance company. So reset us for that in California. Well, we are seeing that more and more in California. Absolutely. I mean, if you're if you're not renewed, absolutely.

And you have a mortgage, you have to have home insurance for that mortgage to be honored, right? Which is why people go to our insurer of last resort, the Fair Plan. But this summer, I spoke with many people whose homes had been burned in a fire near Chico who were retired, who were on a fixed income, who owned their homes outright, didn't

didn't technically need insurance and just felt they couldn't afford it. And when the fire took their home, they're now pushed into much more vulnerable housing. They're, you know...

living in a trailer or living with family. And so when we talk about the importance of a robust, affordable, available insurance market, it's really because insurance is kind of the first line of rescue for people to get their lives back and to not fall into poverty when something bad happens to them. It could not be more important for this system to work well.

A lot of times we get federal emergency folks after a storm here make exactly that point that, you know, FEMA assistance and other assistance is not a replacement for insurance, the private market or the last insurer of last resort insurance.

in the state of Florida called Citizens. But to this point, we got an email from Natalie in Lake County, which is near Orlando. She writes, we are on one of the two remaining homeowners insurance policies to cover our home. We have been bounced from company to company as they all stop covering homes in Florida. With each bounce, our rates have increased significantly.

And then Natalie says, for all of the Californians out there, be aware of the home insurance market as it is now and what's going on. I wouldn't be surprised if something like this happened in California. And clearly, it's already happening from your experience. Oh, yeah, definitely. We've actually, you know, we've got a caller, James, who's actually his father's experiencing almost exactly the situation. James, welcome. I think we we might have lost him there. Sorry about that, James.

Well, you know, one of the things that I'm really curious about is, you know, we have these two states that do the, quote, insurer of last resort in kind of two different ways. Right. We've got California, which, Daniel, please correct me if I say this incorrectly, but this is a it is a.

Private insurers kind of fund it, but it's run by the state. And then in... I'm sorry. Go ahead. Yes, go ahead. You do it. You tell us. I mean, so it is set up by the state and regulated by the state. But it is in effect a private insurer, and it is mostly supported by policyholders, by the fees. So it's very expensive insurance. It's not excellent insurance, but it's a little bit of coverage. And then the backup...

If it runs out of money, is other insurers in the admitted market. It's a similar kind of situation here in Florida. It's called Citizens Property Insurance. It's been around for a number of decades, and the need for it really was seen after the 1992 storm, Andrew.

And right, it's mostly supported by policyholders paying premiums. But oftentimes, those premiums are less than what a private insurer would offer on the same property. And so that kind of difference, that subsidy, as some would call it, you know, suppresses the market and has had a number of homes

And homeowners wind up, you know, looking to the state to get their coverage when they get either dropped by their insurer or the price just skyrockets. And Citizens Meantime is concentrated in the areas in Florida that you would expect it to be tough to get reasonably priced insurance, right, along coastlines.

And in major metropolitan areas. And if I'm correct, is Citizens is the number one insurance provider in Florida. Is that right? Oh, yes. Yes, by far. Yes. Yes. And it also is backed by a number of layers of financial protection. Right. So it's first the premium and then it can put a essentially put a tax on all other types of insurance in Florida if it runs out of money because of some multiple catastrophic events. So ultimately, it puts the entire tax.

Entire state of Florida and Floridians at risk of having to provide the financial backstop that's necessary for this. Yeah. In California, the fair plan is not even in the top 10 insurance providers. But for the first time in recent memory, we are seeing a fee being charged to other insurance companies and to policyholders to prop it up.

And that's to make up, I think, for the Los Angeles wildfires and the exposure there. That's correct. Yeah. Yeah. Yeah. OK, I think we've got a caller here in Florida. Franklin has been patient in Orlando. Go ahead, Franklin. You're on the radio. Hi there. I was wondering if you would address the recent investigative report that showed the state farm does not have money because their

that pass the premium funds on to their local station, and therefore they appear to be broke, when in fact, if you consider where they've taken in, they are not. Is the legislature going to look into this? Franklin, great question. So for context here, there was a great report from some colleagues at the Tampa Bay Times that found a report from 2022 from the state Florida insurance regulator saying

finding that insurers in Florida were diverting loans

millions of dollars into what are called affiliate companies. So these are companies that couldn't provide call service or policy approvals and processing. And those dollars that would wind up oftentimes in executive pay or even investor payments. At the same time, the insurance companies guys were kind of pleading poverty or talking about being broke and not able to cover some of their claims or losses.

So a bit of a scandal here. There was a hearing in the Florida legislature, but there really hasn't been much movement on any legislation to look at this or to regulate it more. It has gone quiet here as we already are almost to the end of our regular law writing session here in Florida. And Daniel, we've got some of our own issues with the insurance commissioner right now. Yeah. In California.

Yeah, these issues sort of seem to pop up perennially. Accusations that he's too cozy with the insurance industry. Some people make more of that or less than others. But it's a criticism that is lobbied at him, it seems like, every couple of years. Mm-hmm.

Yeah, our criticism in Florida here is not so much the commissioner, but rather the legislature. There's a lot of lobbying money. There's a lot of campaign cash that floats around, especially during election time. And on one hand, you have a lot for the insurance company because, let's face it, the dollars that are at stake are enormous now.

And then on the other hand, you also have lawyers, plaintiff lawyers that also want the ability to go after some of these insurance companies that they contend are acting in bad faith in some cases. Well, listen, this has been a terrific conversation. I hope we can do it again. Oh, my gosh. It's so it's always so interesting to hear these Florida voices. I love it.

Yeah, and California as well. You know, so much, right, between Florida and California is seen kind of through this partisan lens, as if these were the two states on some, you know, political spectrum extreme. But...

You know, I've lived in both states. I got to tell you, there's a lot in common. I mean, a lot more elevation in California than there is in Florida. But nonetheless, though, we tend to have a lot more in common, I think, sometimes, guys, than we think we do. It just seems like so much we can learn from each other as well. You know, even just being able to see that another insurer of last resort might work in a different way maybe gives us some of these ideas about what we're able to do here in California as well.

Yeah. Well, Alexis, Danielle, thanks so much for joining us here in Florida. We really appreciate it. Thanks for joining us. Tom Hudson, thank you so much.

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Welcome back to Forum. I'm Alexis Madrigal. We have left our partners there, the Florida Public Radio Station, WLRN. Thanks so much to them. Earlier, you might have also heard David Brancaccio from Marketplace. We are still joined by Danielle Vinton, science reporter at KQED News, who is covering these issues around climate change, home insurance, etc.,

We would love to hear more from you. Have you had to fight to keep your home insured? The number is 866-733-6786. How do you think overall the home insurance market is working? You can email your questions to forum at kqed.org. Let's bring, we're going to go back to James in Santa Clara County. Welcome.

Hey, how you doing today? So yeah, for the last four or five months, I've had to fight to keep my dad's homeowners insurance. He's an elderly man, 85 years old, AAA, a homeowner for 50 years. And they just up and decided that they were going to cancel him. And reason being was they sent a drone over, did a roof inspection, and gave us a list of things that we needed to mitigate, spent thousands of dollars

you know, with inspectors and repairs and, you know, putting together, you know, giving them all of the repair work for them to come back, you know, every single time with something different, something new, you know, and here we are a month away from their insurance cancellation. It says, well, you know, it's going to look like you're going to need a new roof.

you know, after all of the roof repairs had been done and reports given and, you know, to hear from the inspectors saying, yeah, you know, this is, you know,

they buy their playbook they're just looking to cancel and get you out um and so we've had to go on to get you know insurance for a three-month period from costco you know after 50 years of being a customer and it's really frustrating they just don't care they'll give you a list of things and then continue to give you list after list after list so i mean and no inspector from triple a ever came out it was you know aerial footage

This is so interesting. James, you know, I want to actually add a comment from Jelani, who's actually talking about a lot of similar things. And then, Danielle, I'd love you to respond to this. You know, Jelani writes, I grew up in Miami where my parents still live. Insurance costs there are very high. People need multiple policies to cover wind, flood, and fire. I live in the East Bay now, and when we bought our house last summer, we had a very hard time getting insurance during the closing process. It was very difficult because so many companies have pulled out, but we were fortunate to find a policy. Some of our neighbors—and this is where it ties in—

have been getting dropped for questionable reasons. Insurance companies are using drones or satellite images and sending letters for things like, quote, visible roof damage from fungus telling homeowners to make repairs whether they are needed or not. Definitely feels like companies are looking for any excuse to flee. I'm not sure where the state goes from here.

Is this something that is kind of a known thing, Danielle, that these companies are kind of just using satellite images or I would guess some sort of machine learning system to start spitting out these reasons for or these requests for homeowners? It's kind of a new problem, but it's increasingly being recognized as a problem. Aerial imagery by drone, satellite being used to evaluate a home that, you know, may not be

be accurate or certainly would not be as accurate as a human inspector taking a look, but it's much cheaper than sending somebody out, right? There is some legislation now going through the current legislative session that would increase transparency around whether a company was planning to use aerial imagery. They'd have to let you know. And more transparency around things that you can do to...

not be not renewed or canceled. But my heart goes out to, you know, to these instances. I mean, it's just, it's very, it's very frustrating. But I also want to add steps to steps to make our homes safer, you know, really are going to be something that I think all of us are dealing, are going to have to deal with so much more in the coming years, way more maybe than we realize right now. Yeah. Yeah.

Gosh, another one of these coming in too. Lawrence writes, "State Farm demanded I fix my roof because they didn't like my patch job. I did it for $6,000. Then they didn't like the state of my yard and staircase, and while I was in the process of addressing those things, they canceled me. After paying $750 to the Fair Plan, State Farm took me back because they said I showed 'pride of ownership.' I've yet to see a refund for the Fair Plan."

This is a very simple question, Danielle, but probably one that has quite a complicated answer. Carol asks, Liberty Mutual just dropped us. We're in Santa Rosa. What should I do next?

Okay, so it depends. So being so there's two, there's two types of things, right? Being dropped, that sometimes people say that, and what it means is that they're not renewed. So at the end of their, you know, annual policy, their company is not offering to do it for another year, or sometimes there can be a cancellation. So you can appeal.

You can ask for why. And you can also start searching, you know, today for other policies. To help guide you through that, I would recommend the work of a nonprofit called United Policyholders. They do really, really good work. And they're all about helping people navigate these tricky situations. So United Policyholders, they have a good, robust website. They're very helpful people. I would recommend seeking their assistance.

Cool. Let's bring in Sanjay. Welcome, Sanjay.

Yes, I had a comment. One of the options they should offer is just like for flood that if you don't have flood insurance, your flood is not covered. They should offer that for wildfires. Like, for example, if my insurance company turns me down, I wouldn't mind going for an insurance that says, give me home insurance, cover me for a fire that happens because of a kitchen fire or something. But I'm okay if you don't cover me for wildfire because I think the risk is lower.

If I have no option, I'd rather go for that than have zero insurance. Sanjay, such a great point. Danielle? Well, so if the risk is truly lower, then you shouldn't be paying very much for that wildfire risk, right? And, I mean, we have seen...

different types of insurance get sliced and diced. And what it often leads to is people being much more exposed and much, much less covered. So, you know, insurance companies have actuary models that are supposed to charge you for what your individual risk truly is. And I would just worry... Is it wrong people don't totally trust those? Well...

People may not trust them, but I mean, I kind of trust them. I think that, you know, insurance companies really are trying to charge you for like, I'm not going to be paying. I don't pay very much for my wildfire risk because I'm not, I don't live in a very wildfire risky area. And I would pay a lot more if I lived, you know, in the foothills around canyons with lush vegetation. So, you know, we saw that, yeah.

insurance got split out from California homeowners insurance. And now no one has it. And we are at risk of that. So I hear your point. And it could be something that we attempt to do. But I would be concerned about the unintended consequences of that. I mean, it's interesting to me because some of it goes to how the

the market itself works, right? I mean, I think what Sanjay is suggesting is a more open and variable market. Of course, there are, you can imagine markets that didn't work this way at all that had, you know, standard insurance, even socialized insurance or something like that. And then there's just kind of all these insurance providers are kind of all in this gray area, kind of in between like a

totally or at least mostly unregulated market and something that's like fully socialized. Yeah, I mean the risk of going down towards you know, going towards a more socialized system is that that buffers us from the effects of you know, what the actual risk is. Um,

We are, you know, insurance is being felt as one of the sticks as climate change impacts our lives in more real ways. And it's painful and it is lousy, but it is it's one of the things that is nudging us. And like I said before.

the better future that could be out there is to really drive risk down. And I want to, and I want to make a point, you know, we talk about. Hold that thought only because Sandy and El Cerrito, I think it's going to lead you right into it. Sandy, welcome. Hi, I was just, I was just listening to the show and I was seeing some parallels like with the medical industry, as far as all this money going into insurance. And I was wondering what is going into prevention? Yeah.

for wildfires? Like, what can be done? How can we support that? What's the walking and eating healthy of the fire? Yeah. Yeah. Well, I love this question because talking about wildfire resilience and prevention is my favorite thing. Yeah. So the work that we do to prevent wildfires saves, you know, saves dollars for every penny. It's

The state is engaged in a variety of things from improving fire breaks to increasing more prescribed fire measures.

I want to talk about zone zero because that's something that is going to be really important. Scientists are increasingly recognizing that one of the strongest tools for preventing homes from burning and from stopping house-to-house spread is having a border around the apartment.

the perimeter of the house where for five feet, nothing is flammable. And that if we all did that, and that means like no wood decks,

No plants, no overhanging trees that we would see. We would see so many more houses saved. There was a law passed in 2020 that that zone zero requirements had to start coming down for, you know, really wildfire risky areas.

And CAL FIRE let its deadline come and go in 2023 for this because state officials hated the idea of it. And they said it's going to cost people too much and people won't want to do it. And, you know, Governor Newsom is trying to rekindle that initiative. And we have seen places like Berkeley already go out and be pioneers in this in some areas.

homeowners are going to have to clear within five feet of their home. So that would be a thing that we could do that would

make the existing housing stock more safe. New homes are built to a pretty high fire specification, but the real risk is the homes that are already built and how we improve safety there. Got to say, if we can't clear out five feet around our homes, by and large, it feels like we're not really ready to deal with a lot of the other impacts of climate change coming down the line, you know? Well, Alexis, you know that people use...

vegetation for privacy. They love a tree. And I understand all of that. But I think that this will be just something that is going to be a real seismic shift in how people view their homes. All right, everyone, take a look at that zone zero. We have been talking about the growing home insurance crisis in California and making some comparisons with Florida with Danielle Vinton, science reporter at KQED News. Thank you so much. Thanks, Alexis.

Earlier, we spoke with David Brancaccio, host and senior editor at Marketplace, and we were also joined in a simulcast by WLRN in Florida. The 9 o'clock hour forum is produced by Grace Wan and Blanca Torres. Our interns are Brian Vo and Jesse Fisher. Jennifer Eng is our engagement producer. Francesca Fenzi is our digital community producer. Judy Campbell, lead producer. Danny Bringer is our engineer.

Katie Springer is the operations manager of KQED Podcast. VP of News is Ethan Tov and Lindsay. Chief Content Officer is Holly Kernan. And thanks so much to Tom Hudson and Bridget O'Brien and everyone at WLRN who helped make this happen. I'm Alexis Madrigal. Stay tuned for another hour of Forum Ahead with guest host Leslie McClurg. Funds for the production of Forum are provided by the John S. and James L. Knight Foundation, the Generosity Foundation, and the Corporation for Public Broadcasting.

Support for KQED podcasts come from Berkeley Rep, presenting Aves, an intriguing new play about memory, forgiveness, and unexpected transformation. Playing May 2nd through June 8th. More info at berkeleyrep.org.