Who’s On the Hook for California’s Uninsurable Homes?
January 16, 2025
The Indicator from Planet Money and More
Meredith Fowlie, Energy Institute Faculty Director, discusses the pressures and challenges around the FAIR plan when it comes to home insurances and wildfire risks.
“The whole goal is to get people back into the larger market, but if it’s hard for people to find insurance they’re going to have to stay in the FAIR plan, and the FAIR plan just wasn’t designed to be a permanent solution for a large swap at the market…If you think about the standard risks that insurances have been managing (like dog bites and broken pipes), they can look at their data, they can just estimate that in this zip code we can expect to pay this…Climate change risks and these catastrophic events, because they’re so rare, they don’t have lots and lots of experience to draw on. Are the FAIR plan rates adequate? It is a real challenge to understand what even is an adequate premium to charge.”
Photo: npr.org
Read more about home insurance and wildfires in The Financial Times