Wine Country fire threat spreads to insurance coverage

Two North Bay congressmen said Thursday they don’t want homeowners and renters coping with the concern of wildfires and balking insurance companies to get burned twice.

That’s why U.S. Reps. Mike Thompson, D-St. Helena, and Jared Huffman, D-San Rafael, held a press conference Thursday, using Coffey Park as a symbolic backdrop to discuss disaster resilience legislation introduced at the end of last month.

The lawmakers gathered with a group that included local government officials and real estate and construction industry experts to take on “one of the single biggest issues” Thompson said he hears about in his Northern California district.

“I don’t think a day goes by that people don’t talk to me about the impacts they’re experiencing,” Thompson said, while referring to the surge of insurance companies pulling out of the California market.

California’s largest insurer, State Farm, chose to not renew 72,000 home and apartment insurance policies. More than 2,300 of these policies cover properties in the North Bay.

State Farm wasn’t the only insurer to pull back coverage. Allstate, Farmers and USAA have also decided to either limit the business or leave the state altogether.

“This is really a state issue,” Thompson said.

Thompson introduced legislation with Rep. Doug LaMalfa, R-Chico, on March 29 that would offer broad incentives in home hardening for homeowners in fire prone areas. In representing Butte County, LaMalfa’s district experienced the deadliest wildfire in California history. Following the Tubbs Fire by a year, the Camp Fire leveled the town of Paradise and killed 85 people. The two blazes rank in the top 5 deadliest for the state.

If passed, HR 7849, the Disaster Resiliency and Coverage Act of 2024, will provide a program through state governments that offers $10,000 in grants for home hardening improvements. Along with agricultural tax benefits on emergency assistance, businesses and individuals would also gain a 30% tax credit to mitigate risk.

“The insurance crisis in California is a very big ship. The state needs to step up and start doing the right thing,” said Rohnert Park Mayor Susan Hollingsworth-Adams, who works in insurance operations herself.

She estimated her town may potentially lose $800 million as a result of a lack of insurance, calculating a 12% property value on 9,100 homes.

“Homeownership is a vital cornerstone to our economy,” North Bay Association of Realtors CEO Lisa Badenfort said, adding the concern that home buyers will get pushed into more expensive policies such as surplus plans that offer less for more money. The alternatives make signing onto the American dream more “cost prohibitive.”

The looming collapse has sent the state into overdrive to come up with a plan called the Sustainability Initiative that will entice insurance companies to rejoin the market. The Insurance Commissioner’s office discussed the proposal in a meeting earlier this week.

These efforts were met with optimism by Allstate, which provided a statement on its level of support.

“Once home insurance rates fully reflect the cost of providing protection to consumers, we’ll be able to offer home insurance policies to more Californians with timely rate approvals, the use of advanced wildfire modeling and reinsurance costs,” Allstate spokeswoman Teny Josephbek said in a company statement Thursday morning.

To Huffman, it’s both an access and affordability issue.

“We’re running the risk of private insurance going away. We call on the state of California to tell these companies to consider these (federal) efforts,” Huffman said.

The situation may also cause builders to hesitate to provide housing at a time when the region needs it, North Coast Builders Exchange CEO Lisa Hittke Schaffner.

“If they can’t get insurance, they’re not going to build,” she said. “And the numbers are dismal of how much housing we need.”

“Living in California means living with wildfire,” Cal Fire Deputy Director Nick Schuler said over the phone. “This is why defensible space, home hardening and evacuation plans are so critically important.”

Even in areas where the terrain has already burned as in the case of several North Bay wildfires, the threat remains, he pointed out. Schuler also said the situation worsens when the winter provides abundant growth of grass and ladder fuels followed by high heat.

The National Oceanic and Atmospheric Administration predicts this summer has the potential of delivering record hot temperatures that often result in bad wildfire years.

“When we get those offshore winds, the topography channels those winds, creating risk,” said Ben Nicholls, operations chief for Cal Fire’s Napa-Sonoma unit.

That’s why Nicholls stressed the fire agency is trying to beat the clock with thinning to reduce the risk. The Cal Fire unit is out working at Shiloh Regional Park, Pepperwood Preserve and Saddle Mountain to reduce the threat.

“There’s always the potential. So, our goal is to do more to mitigate the risk,” Santa Rosa Fire Marshal Paul Lowenthal said during a phone call. “It’s hard to say if a fire like Tubbs would happen here again. When you look at Fountaingrove, the footprints in construction have improved. But the vegetation can still burn.”