Catastrophic wildfires and other disasters fueled by climate change are raising serious doubts about the future of insurance. But a former California insurance commissioner has some ideas about what could be done.
Dave Jones is now the director of the UC Berkeley School of Law’s Climate Risk Initiative, but he served as commissioner from 2011 to 2018, when some of California’s most devastating wildfires took place. Over the last year, major California insurers have paused issuing new homeowner policies.
“Climate change is causing more frequent and severe weather related events,” he explained. “Those in turn are killing people, injuring people, destroying property and causing major insurance losses.
“And in certain parts of the United States, based on how climate change is landing, I believe that we are marching steadily towards an uninsurable future because the risk of loss and the magnitude of loss is growing so much that insurers can't cover those properties and still make a reasonable profit.”
Due to insufficient action to combat climate change, he said much of the West faces that prospect.
However, there are things that can be done. Most important, he said, is reducing greenhouse gas emissions.
In a 2021 report, he and his coauthors also found that it was possible for insurance models to take prescribed fires and other wildfire mitigation efforts into account, which could ultimately lower prices.
“The bad news is that so far…the insurers have not taken this up into their models, and it’s very frustrating,” Jones said. “And it's frustrating for those communities and taxpayers that are paying for forest treatment.”
He added, “Because the insurance carriers are not taking it up voluntarily. I think state governments are going to have to say, ‘Look, this needs to happen.’”
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, KUNC in Colorado and KANW in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
