Free market fire insurance would remedy CA’s wildfire woes
Alex Epstein at Energy Talking Points pins California’s disastrous wildfire strategy on resilience failures, not climate, and urges free market insurance to spur smarter prevention. This would prevent premium hikes from strangling homeowners in Silicon Valley cities like San Jose and Los Gatos on the edge of flammable hillsides.
January’s devastating LA fires were the biggest wakeup call yet that California has become significantly more endangered by out-of-control wildfires.
Fortunately, more and more Californians are starting to understand the root cause: a failure to practice climate resilience.
As a longtime resident of Southern California, I have long been frustrated that our leading politicians blame our fire problems on rising CO2 levels, a minor fire factor they have no real ability to affect—while ignoring the major factor they can directly affect: resilience.
The last 100 years show that increasing resilience can more than offset any new dangers from rising CO2 levels. As evidence, the death rate from climate-related disasters has fallen 98%—and damages adjusted for GDP growth have not increased.
Regardless of climate changes, we could radically reduce wildfire danger through 5 forms of resilience:
Crack down on human ignition
Reduce fuel load
Reduce proximity of homes to fuel
Increase fire-resistance
Build robust response capacities
We’ve failed at all 5.
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Why is California so bad at wildfire resilience? One major reason is “green” policies that prevent the major human impact needed to manage our naturally fire-prone forests and shrublands—such as reducing fuel load. “Green” fire management prohibitions are deadly.
An overlooked cause of California’s fire problems is a lack of free-market fire insurance. In a free market, fire insurance premiums would have risen dramatically in response to California’s failure to practice wildfire resilience—sending a crucial message.
But California shot the messenger.
Many Californians have experienced the situation my wife and I did when, in preparation for the birth of our first child, we bought our first home in Southern California. No private company would sell us fire insurance at any price; we could only get the government’s FAIR plan.
While climate catastrophists pretend that insurers’ withdrawal from California is due to overwhelming climate risk, this is absurd—not just because the major risk is lack of resilience, but because regardless of a risk’s cause, insurers can always profitably insure at some price.
There are many forms of insurance for things far riskier than fires in California—which, in high-risk areas, might be 1% of a home’s cost annually. Other forms of insurance often exceed 5%: athlete disability insurance, high-risk occupational insurance, even AppleCare!
As California’s failure to practice wildfire resilience was rising, we needed insurers to jack up premiums in proportion to the risk—especially for homes in fire-prone areas and/or homes with low fire-resistance. But our government prevented this, covering up its own failures.
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Post-LA fires, California needs to embrace a free market in disaster insurance that will encourage us to increase resilience.
Instead, we have imposed even more restrictions on insurers, dictating which policies they can cancel and forcing them to fund government insurance.
I will try to convince my government in California that the key to radically reducing wildfire danger—like all climate danger—is increasing resilience, including the free-market disaster insurance that incentivizes it.
Editor’s Note:
Silicon Valley faces wildfire threats, too; Santa Clara County’s 2024 blazes scorched nearly 100 acres and prompted potential insurance pullouts in Los Gatos.
Read the whole thing here.
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