CNN
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When Chad Comey heard sirens outside the Palisades apartment where he lived with his parents last Tuesday, he didn’t think much of it. Then the fire alarms went off.
“I’m holding out hope, I’m rationalizing things, like, we’re in the heart of the village, this is the last place to stand, because if this burns, the whole village will burn,” he recalls he thought as he watched the approaching fire. “You’d never expect that everything you’ve known could disappear.”
Comey, a caregiver for his disabled parents, delayed the evacuation as long as he could, ultimately enlisting a neighbor to help carry his mother in her wheelchair down five flights of stairs. When he was able to return to the rubble of his neighborhood several days later, he found his house destroyed, one of more than 12,000 structures lost in the Los Angeles fires.
“We all cried,” he said. “We were worried.”
Now he and his family face the daunting task of figuring out what lies ahead – made all the more difficult by the fact that they have no safety net.
“My family and I don’t have any insurance,” he said. His parents had lived there long enough to pay off their mortgage and were no longer obligated to carry a policy, so they left because it was too expensive. “They are both disabled. They can’t afford it. What they have goes to medical equipment, food and paying HOA fees, which are pushing a thousand dollars a month.”
The building they lived in had also just been stripped of its insurance in the last year – it was considered too much of a fire risk.
It’s a situation many California homeowners are finding themselves in, as insurers have dropped millions of policies in the state since 2020.
“They stopped renewing what they thought was sh*risk,” Los Angeles insurance agent Carla Ramirez said of the big carriers, which have refused to renew homeowner policies or stopped writing new policies in the state. “In the last year they reassessed the whole fire risk. Palisades and Malibu were not previously a fire hazard and they reassessed; they said, we think it’s a looming, huge risk and it’s going to bankrupt us.”
Shya Mousavipour’s parents were stripped of their insurance less than a year before their Malibu home burned to the ground in wildfires.
“They got this notice that even though you paid this policy for 18 years, we’re no longer insuring people in that area, so good luck,” he said. “They were forced to switch to the California FAIR plan. Even though they are insured, like many victims of this tragedy, they are underinsured.”
The FAIR plan is supposed to function as an insurer of last resort. Set by the state, policies typically have higher premiums and more bare-bones coverage than private carriers. Residents often have to bundle together the FAIR plan’s fire cover with policies from other carriers to match their previous benefits, which can end up being a much more expensive package.
“It doesn’t cover the cost of what it will take to rebuild, what they lost, housing — they have to live somewhere for the next two years, maybe more,” Mousavipour said, predicting his parents, who are at the bottom of life. 60s, will receive a “share” of the cost of rebuilding their home.
“They’ve been paying for this all their lives. Their net worth is very much tied to that house,” he said. “Our life was in that house. It was my mom’s dream house. They worked their whole lives for that house.”
Jamie Lite, who lives about an hour outside of LA in Acton, got word that her home insurance would be dropped on the same day that her husband and son, both firefighters, were on the front lines battling the blaze.
“It was like adding insult to injury,” she said. “Things are burning and knowing that my insurance is going to run out as of April 15th, it just makes me feel like what am I supposed to do? These are our homes, these are our lives. Here my family is out there helping the situation and these companies are preying on everyone.”
In the three years before she left, Lite says her premiums went from $1,750 to $7,000 a year, costs she expects to increase even more with a new carrier. She feels trapped. “I can’t sell my house anyway; someone who comes in to buy probably can’t get insurance,” she said. “Who will buy it? It’s a catch-22. You are stuck.”
The insurance crisis is squeezing homeowners across the state.
Celeste Vander Ham, who lives further south in Rancho Capistrano, paid $1,000 a year for insurance for the first 15 years on her home, but, after the 2018 Holy Fire, she says she was told by her realtor that insurance that her area was rated a “10” for fire danger and that “no one will insure you”. She and her husband were dropped from their fire insurance and had to go to the FAIR plan for coverage. They now pay a total of $10,000 a year for the policies needed to insure their home.
The costs are crippling on their limited income — he lives on Social Security benefits and she is his caregiver. With only eight years left on their mortgage, they had to refinance their home, taking out another 30-year loan to cover the insurance. She now expects they will have to sell their home and move out of state.
“It’s really heartbreaking,” she said. “We’re going to have to leave because of homeowner’s insurance.”
Ramirez, the insurance agent, said the state’s fire risks justify the higher premiums and suggested homeowners aren’t accepting the “true costs” of living in these areas. “If your area historically wasn’t a high fire risk but is becoming one, that’s the cost of living there,” she said. “If the cost of living there is beyond your means, then I believe you should move.”
Homeowners in California traditionally had the option of accepted or non-accepted carriers. Accepted carriers, such as State Farm, Allstate and Farmers, are licensed by the state and must follow regulations around pricing, which they argued made it impossible for them to insure high-risk areas. Nonadmitted carriers are usually smaller insurers that operate without the same regulations, so the state doesn’t have to approve their rates or policies. As a result, they often charge higher premiums, but may offer coverage in riskier areas.
Accepted carriers have been out of California for two years. Allstate stopped accepting new policies in the state in 2022, Farmers put a cap on California policies it would write in July 2023, and State Farm stopped writing new policies in the state in May 2023, followed by an announcement in 2024 that it would not renew about 72,000 policies.
Farmers and State Farm did not immediately respond to a request for comment.
In a statement, Allstate said the company “ceased selling homeowners insurance policies to new customers in 2022. We continue to offer coverage to most existing homeowners insurance customers. . . . As it relates to wildfires , we have moved to California with claims staff and multiple mobile claim centers to give our customers one-on-one support and help them file a claim, in addition to donations to help in case of disaster.
Ramirez said homeowners discounted by these and other carriers were shocked by the FAIR plan’s prices or non-accepted carriers, which it can cost between $20,000 and $30,000 a year in fire areas.
“Most people chose to keep their coverage low because of the sticker shock,” she said. “Your price just tripled and we’re telling you to double it, and people said, ‘Ehhh not that much, I’m fine here.'” That approach, she said, has left many Californians uninsured or underinsured. .uninsured while dealing with the aftermath of the destruction.
“That’s the way we have to price now,” she said. “And look, they all just got burned, didn’t they? The insurance company lost, big time. He was assessed accordingly.”
Residents like Comey and Mousavipour say they understand that insurance companies are businesses that operate with profits in mind, but that the current model is unsustainable.
“We need a solution where people are fully insured in these areas, and since they are private companies, they should be encouraged to want to work here,” Mousavipour said. “I don’t think the answer is that people shouldn’t live there, but it needs to be addressed and there needs to be a real investment in fire prevention measures so when that happens, we’re prepared.”
Comey pointed the finger at insurance companies.
“We’re highlighting the wrong things here where we put corporate profits over people, and these are people’s lives that have been lost and everything they’ve ever known,” he said.
GoFundMe is overflowing with fundraisers for area homeowners who said they either didn’t have insurance or weren’t recently renewed by their plans. A fundraiser for Comey’s family has already raised over $130,000.
“I feel blessed by the generosity that people have expressed,” he said. “I also think it’s a sad state of capitalism and the free market that everyone has to rely on GoFundMes to stay afloat or get back on their feet.”
