The Wildland Fire Mitigation and Management Commission released its report outlining a comprehensive, consensus-based set of recommendations to Congress to address the nation’s wildfire crisis. But will it make a difference?

Supes, state, locals explore Lassen County’s fire insurance nightmare

In case you haven’t noticed, some Lassen County residents are experiencing a fire insurance crisis that could eventually touch every property owner in Northeastern California. Rumors and grumbles have resounded across Lassen County in recent weeks regarding fire insurance — rising rates, cancellations and even an outright abandonment of our region by some insurance companies.

The Lassen County Board of Supervisors and residents now have more information and some perspective regarding this issue thanks to Lassen County District 5 Supervisor Jason Ingram and the board that invited the California Department of Insurance to attend the board’s Tuesday, July 18 meeting to answer and perhaps address local questions and concerns.

And during the lengthy discussions, the board also heard from local insurance agents who offered their unique perspective.

Two terms that frequently arise when discussing this fire issue are “risk” and “hazard” and a June 15, 2023 State Responsibility Area Fire Hazard Severity Zone map created by CalFire’s Fire and Resource Assessment Program.

According to the program’s website, “The Fire and Resource Assessment Program of CalFire conducts periodic assessments to align the state mandates for natural resource inventories and strategies with the federal government’s objective to increase reliance on state programs for determining funding priorities. These assessments provide critical data that is used to inform decision-making at both the state and federal levels and ensure that resources are allocated to the areas that need them most.”

Many Lassen County residents have recently been visited by CalFire inspectors who left recommendations for homeowners to help make their residences more fire safe. And while the information on CalFire’s State Responsibility Area Fire Hazard Severity Zones map was never designed for use by insurance companies, some insiders say the insurance companies use that information anyway.

All this firefighter can do is watch this home in Doyle go up in flames. File photo

Michelle Hunter, an agent with Farmer’s Insurance, one of the only carriers still writing policies in California, said, “What I witnessed today, and what I heard — there is so much misinformation being stated (by the state insurance representatives and the board of supervisors) that it’s actually embarrassing.”

She said the California Fair Plan is not backed by the state of California, but rather by the insurance companies that remain in business in California and putting California in the name makes people think it’s a state agency when it is not.

She said while it seems residents might be able to change their risk score by making improvements to their property, they cannot.  That determination is made by the ISO number, which has nothing to do with the CalFire map.

“If they’re saying there’s a probability there’s going to be a fire coming down the mountain, that’s what they’re using,” Hunter said. “Now we can argue with them all day long, but we don’t know how to change that. You can’t get ahold of ISO …It’s ISO that comes up with these maps.”

She said her company is not writing fire insurance any more, so homeowners are going to have to have two polices, and the premium on her policy will decrease because the company is no longer liable for fire and related damages.

According to Hunter, the California Fair Plan is unsustainable, and the California Fair Plan policies cost consumers the most money. She said a client in Janesville paid $1,700 for insurance through her company, and the California Fair Plan fire insurance premium is $5,000. She said his insurance burden alone — is now half the cost of a mortgage.

Another home in Doyle, lost to fire. NorCalFireWeather

She said the insurance companies are in this spot because of the rising cost of inflation, the rising cost of goods coming off six catastrophic fire losses and not some fire risk map.

“You guys are telling them here’s all these preventive measures that they can do to save money,” Hunter said, “but the insurance companies weren’t taking the right rate increases. We weren’t keeping up with the rising cost of inflation. Now you throw COVID into it and you throw all the back log in manufacturing and all of these things that have happened in six or seven straight years, and the insurance companies aren’t prepared. Their risk pool no longer matches what they have in premiums. They don’t have enough money to pay out in claims. So how do we make that money up? We raise the rates.”

She said in a period of just six months, her company plans to hike rates by triple digits just to keep up.

And she said the department of insurance needs to recognize this and she advised, “Don’t blame them (residents) because they don’t have fire breaks around their house. That’s not what it is … We don’t look at homes individually. We look at an area.”

And Brian Wilson, also an insurance agent, noted insurance companies do not pay off claims with the money they collect in premiums. Instead, they invest the money they collect in premiums and use the profits from those investments to pay claims. Why the investment market is not good, the insurance companies do not earn those profits to pay claims.

“Where are we?” Wilson asked. “We have people being cancelled. Insurance companies are leaving. Rates are going up. Rates are going up regardless, but they’re going to go up even more if we don’t get this mess cleaned up. We cannot rely on the Fair Plan. The Fair Plan is a band aid. That is supposed to be the insurance plan of last resort, not the only resort. And that’s where we are right now in Lassen County.”

But according to the program’s website, “Safer from Wildfires is a ground-up approach to wildfire resilience with three layers of protection — for the structure, the immediate surroundings and the community. Following these achievable steps can help you save money on your insurance. Safer from Wildfires was created by an interagency partnership between Insurance Commissioner Ricardo Lara and the emergency response and readiness agencies in Governor Gavin Newsom’s administration.”

Still, the supervisors bristled.

“It’s not the citizen’s fault,” Neely said of the wildfire devastation in Northeastern California, “it’s the government’s fault. It’s the Forest Service’s fault because they let stuff burn. It was no fault of the homeowners — they were wanting to put out the fire. There were several opportunities for them to do it. You need to hold CalFire and the Forest Service responsible because we are having to pay the price for it now.”

District 1 Supervisor Chris Gallagher followed up on Neely’s comments and pointed out that while the region suffered the largest wildfire in state history, only 100 homes were lost in Lassen County, largely due to the efforts of the Fire Safe Council and homeowners to protect their property.

He said American Modern Insurance, the company that insures a cinder block building with a metal roof he owns in Spalding, just informed him they were leaving California and cancelling his policy.

District 5 Supervisor Jason Ingram said he lives in the South County that has been devastated by the fire, and there’s nothing left there to burn.

“If I had the capital to start a private insurance company, that’s where I would start because there’s no way we’re going to lose any homes there,” Ingram said.

He also encouraged the state insurance leaders to come to Lassen County to see the conditions and the efforts by homeowners to protect their property that are not reflected in what’s happening here in terms of insurance rates. And he added, with experience as a firefighter that 99 percent of the homes in his district are “completely defensible.”

“There’s nothing left to burn, literally,” Ingram said. “If you come up the Highway 395 corridor from Highway 70 clear to Milford, the trees are gone. We won’t have any devastating incidents like this for decades. And I agree the mismanagement by the Plumas National Forest played a huge role in how many acres burned. I was on these fires as a volunteer in Doyle and watching (fire leadership) say, ‘We’re just going to let the Dixie Fire burn into the Beckwith Fire scar.’ That’s not fair to us when the plan for the national forest is to let one fire burn into the other instead of fighting it. These are some of the frustrations I hear up here.”

He added on one of his rentals he just had to pay more than 12 percent of the purchase price just for insurance.

“I’m not going to have Fair Plan this year because I simply can’t afford it,” Ingram said.

But Ingram’s concern wasn’t for himself, it’s for his elderly constituents.

“It kills me hearing from seniors on fixed incomes saying, ‘I gotta go back to work, and I can’t afford to sell my house, and I’m going to have to work until I die to pay my fire insurance,’ Ingram said, “and other seniors are rolling the dice, pulling out their retirement and paying off their homes so they could opt to not have fire insurance.”

“I come from a timber falling background,” Chair Gary Bridges said. “I worked in the woods all my life. That fire was mismanaged. The forest itself is mismanaged. And now the citizens of Lassen County are paying the price for our government’s mismanagement, and that’s really unfair … I think the commissioner is fighting in the wrong direction for the citizens he’s in office to protect. He should be fighting the Forest Service. He should be fighting the insurance companies … Our homes are already hardened, but you haven’t seen that yet, and you won’t unless you show up in person.”

And he said the mismanagement continues because the forest has not been cleaned up after the fire — posing a new risk.

State Insurance Commissioner’s report
Durriya Syed, the department’s Northern California outreach analysist, said she was “happy to be with you all to share with you an overview of our department and to give you an update on the National Forest wildfire safety regulations which are intended to drive down costs of insurance.”

After Syed’s 20-minute or so presentation, she took questions from the board and the public and Syed and Lisa Strange, Northern California Outreach manager, got an earful of ire and then some from Lassen County.

Ingram relayed the horror stories facing his constituents who tell him they never would have retired had they known they were going to have to keep working until they die to be able to afford fire insurance. As a volunteer firefighter, Ingram said he and others are proud of the great work they’ve done over the years to obtain favorable ISO ratings in Lassen County.

“Our greatest fear up here,” Ingram said, “is we have people on fixed incomes, and they want to sell their homes, and now they can’t because we now have fire insurance premiums that are well beyond their principal payment on a home loan.”

According to Ingram, Firewise Communities only receive a 5 to 10 percent savings on their premiums.

“So far in Lassen County we have 10 recognized Firewise communities and three that are working on their recognitions as we speak,” Ingram said. He also mentioned a possible 300-foot-wide fire break along Highway 395 that would reduce the risk of a wildfire jumping the highway.

“I’m just wondering, in total, what exactly is Mr. Lara is doing to help with raising the caps for private insurers so they can afford to stay in business,” Ingram said. “If we keep going down this path, I think rural America night turn into a ghost town because people can’t afford to live here.”

Strange responded insurers submitted rates to the state by April 12 and those were still under review, and any changes should be in effect by the fourth quarter of the year. She said if homeowners have followed the state’s recommendations, they should qualify for a fire insurance discount.

“I’ve heard a whole lot of words without meaning a whole lot of information,” said District 4 Supervisor Aaron Albaugh. “One of things you talked about was getting out of the office and coming to meet with folks. I don’t see you here in person so you can look me in the eye and tell me these things. You guys need to get out of the office, and that doesn’t mean just get on a computer screen and hide behind it where you can’t see the people in person, you can’t see the pain and the suffering and the emotions these people have … Get out of the poison toxic place in Sacramento and get out in the real world. The other thing you said is you’re supposed to protect us from fraud and abuse. I don’t see a whole lot of protection. We’re being abused. We’re being sold a fake bill of goods.”

He said homeowners are asked to harden their property, but state regulations ban many tools that could be used in that regard.

“You guys have got to be smarter than your boss,” Albaugh said. “If you guys want to help out, go advocate for us.”

He said the insurance companies are not supposed to use the CalFire map, but they do.

“I hear all these words today,” Albaugh said, “but what are you guys doing to actually help us? It’s just fluff, so shame on you guys — one for not being here, two for not advocating for us and three for not doing what you can to help us out.”

“I want to tell you I’m one of the persons in California who has been canceled four times already,” said District 1 Supervisor Chris Gallagher. “In fact, I just got another cancellation last week from American Modern Insurance. Not once have I seen a wildfire risk score on any cancellation. They just tell you you’re cancelled, we’re not doing business in your state any longer, and find a new insurance company.”

He said the fire insurance companies’ decision to pull out Lassen County is ridiculous because such a large percentage of the county has already been destroyed by wildfire.

“There’s no forest left,” Gallagher said. “So, the wildfire risk for our county is very, very low.”

He said one of his properties that has been cancelled is on a golf course.

“The grass is green,” Gallagher said. “There are hardly any trees there. Why are they able to cancel you on a golf course where the risk of burning is next to none.”

And Gallagher had another thought.

“If insurance companies in California want to insure people for their autos, they should be forced to insure people for their homes as well, so you could buy one policy for all of these things in California and not be cancelled,” Gallagher said. “There should be wrap around programs, and that ought to be a law in California.”

Neely thanked Syed and Strange for attending remotely, “but I wish you guys were here to actually see what happens to our community, and it just baffles me to no end that you guys can say you want to help the citizens. We had one of the largest, the biggest fire in California’s history, you would think the insurance commissioner would want to come to Lassen County and actually see and witness what that wildfire did to this community and have a first-hand experience … I encourage you guys to come up here and see the devastation. Yesterday, two more insurance companies — AAA and AllState — said they were leaving California. What are we going to do? It doesn’t look like the insurance companies want to work with the state insurance commissioner unless we hold their feet to the fire. We are a Firewise county.”

Neeley said homeowners follow the insurance companies’ direction to harden their homes against wildfire, but then the companies change the items they want the homeowners to accomplish, and he said some retired seniors have gone back to work just to pay their fire insurance premiums.

He said his property is surrounded by green pastures, but his insurance company just raised his premium by $3,000, “So, I didn’t see any discount.”

“If you want to listen to the people and actually get out of the office, if your boss will let you, and come here and see the largest fire in California history,” Neeley said. “You folks can witness it.”

Lassen County Administrative Officer Richard Egan joined the fray. He said while most of the state’s presentation centered upon hardening property and taking fire safe steps, Lassen County residents already have been very good in that regard.

“But that doesn’t go far enough to mitigate the real threat that’s out there which is the mismanagement of the public land and the failure to actively suppress fires when they start,” Egan said. “It makes me curious that isn’t mentioned or even recognized in your presentation. And I wonder if the insurance commissioner recognizes those threats that we see in Lassen County and if you’re making those same kind of encouragements to those sister agencies and federal agencies to change their meaning of what seems to be the overriding risk factor that probably insurance companies are looking at.”

Strange said, “yes,” and these regulations are the result of the fire insurance commissioner’s discussions with many other agencies — “You’re going to do something, you’re going to do something, and you’re going to. Let’s all get together and do one thing.”

Here’s most of the information from the state’s Department of Insurance PowerPoint presentation
The presentation highlighted the state’s Safer from Wildfire program. Here’s some information from the state Department of Insurance presentation.

The role of the state insurance commissioner is to:

  • Protect consumers from fraud and abuse;
  • Regulate most lines of insurance and maintain insurer insolvency;
  • Set standards for agents and broker licensing;
  • Perform market conduct reviews of insurance companies;
  • Resolve consumer complaints;
  • Investigate and prosecute insurance fraud; and
  • Cannot require or compel insurance companies sell insurance.

According to that presentation, “Every action under Safer from Wildfires will qualify you for an insurance discount. By doing more, you can save more.

Here are the state recommendations

  • Class A fire-rated roof;
  • Five-foot ember-resistant zone around your structure;
  • Noncombustable six inches for the bottom of the walls;
  • Ember- and fire-resistant vents;
  • Double pane windows or added shutters;
  • Enclosed eaves;
  • Cleared vegetation and debris under decks;
  • Move sheds and outbuildings at least 30 feet away;
  • Trim trees and removed brush in compliance with state and local defensible space laws;
  • Neighborhoods can form a Firewise USA community; and
  • Cities, counties and local districts can become certified as a Fire Risk Reduction Community.

Regulations the state says will lower costs and transparency

  • Regulate insurance companies to provide discounts to homeowners and businesses by hardening their homes;
  • Provide consumers with transparency about their “wildfire risk score” that insurance companies assign to properties;
  • Give consumers the right to appeal their risk determination; and
  • Insurance companies have submitted their plans for implementing the requirements of this regulation and CDI is reviewing those.

Regulations — Homeowners Association, availability and FAIR Plan

  • If a HOA located within one of the listed community-level designation areas, the HOA may also qualify for community level discounts;
  • HOASs may also qualify for other optional wildfire mitigation effort discounts;
  • With accurate pricing of insurance, we expect to see more insurance options for people through a more competitive market; and
  • The Department of Insurance expects the FAIR Plan to comply with new regulation and offer discounts for wildfire risk mitigation and structure hardening.

For more information from the state, call (800) 927-4357 or go to insurance.ca.gov.