Wildfires & the Escalation of Climate Risks
California’s vulnerability to natural disasters, particularly wildfires, has exacerbated the insurance crisis. Between 2020 and 2022, over 2.8 million homeowners faced non-renewals of their policies, with destructive wildfires wiping out decades of profits for insurers. Events such as the 2018 Camp Fire alone caused damages exceeding $16.5 billion, forcing companies to question their capacity to absorb future losses. Climate change has made wildfires more frequent and intense, with hotter, drier conditions creating a perfect storm for disasters.
However, as former State Insurance Commissioner Dave Jones emphasized, the crisis cannot be entirely attributed to climate change. Instead, it reveals a more pressing issue—insurance pricing does not adequately reflect today’s risk landscape. California’s outdated insurance regulations have made it nearly impossible for insurers to adapt to the rapidly escalating costs of disasters.
