Nevada County supervisors pen letter to state insurance commission, ask for help
California homeowners have paid significantly less for fire insurance than their counterparts in other states, the Nevada County official said.
The average premium for a California home worth $500,000 or more was $1,662. Compare that to $3,612 for similarly priced homes in Texas and $4,686 for Louisiana, according to the National Association of Insurance Commissioners.
However, those numbers are from 2016, said Jeffrey Thorsby, senior administrative analyst with Nevada County.
Many county residents have said their insurance rates are skyrocketing, doubling or tripling in price. Some insurance companies no longer write policies here.
It’s the different methods insurance companies use to calculate rates in areas like Nevada County, stemming from the increased threat of wildfire, that led the Nevada County Board of Supervisors on Tuesday to send a letter to the state’s insurance commissioner.
“Insurance companies are very concerned that they cannot cover the loses,” Thorsby told supervisors.
In their letter to Insurance Commissioner Ricardo Lara, supervisors point to their concern over the affordability and availability of fire insurance. People who live in areas designated with elevated or extreme fire danger — about 75% of Nevada County’s improved parcels — face losing their insurance, or of facing premium increases of up to almost 70%.
Supervisors say heightened transparency and uniformity is needed in the insurance industry’s method of determining risk. Insurance providers should consider a homeowner’s vegetation maintenance and programs like Firewise Communities when making their rates.
“County and local governments stand to bear serious costs associated with any crisis recovery and need to be at the table to help avert exacerbated recovery costs compounded by a lack of insurance coverage,” the letter states.
Michael Soller, deputy insurance commissioner, said in an email that his office is looking for methods to lessen wildfire risk in areas like Nevada County. Possible solutions include requiring insurers provide discounts to those who mitigate their properties against fire.
“With local governments making decisions about development in environmentally sensitive areas, the state must engage with those like Nevada County who want to be proactive in managing the risks of catastrophic events,” Soller said.
Supervisor Dan Miller said Tuesday he believes the letter will raise awareness about the issue. Supervisor Heidi Hall expressed surprise over a lack of a group letter sent by rural counties.
“This is going to be at the top of the list for a long time,” Supervisor Sue Hoek said.
To contact Staff Writer Alan Riquelmy, email firstname.lastname@example.org or call 530-477-4239.
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