The "new normal" of California's fire season -- year-round threats to homes all over the state -- could alter the marketplace for fire insurance, according to California Insurance Commissioner Dave Jones.
Multiple major wildfires have destroyed at least 800 structures in Southern California this week, just months after deadly fires in the northern part of the state led to a record $9 billion in insurance claims. Jones says insurers could respond by being more selective about where they issue policies.
"It’s possible in the wake of these disasters that we’ll see some insurance companies, in some homes, begin to decide that they don’t want to write new policies," Jones said.
Any change in coverage won't immediately affect victims of this year's fires as state law gives them the right to renew their policy. But Jones said that insurers are increasingly relying on sophisticated risk models to pinpoint houses that are at risk of wildfire.
"Even if a homeowner has fortified their home with fire prevention methods, cleared brush, the insurer may still decide that because of the location of the home, the topography, the wind direction, its proximity to large forests, that the particular home is one they don’t want to write," he added.