Napa, CA – Two homeowners in northwest Altadena, Louise Hamlin and Chris Wilson, found themselves on opposite ends of California’s growing home insurance crisis after losing their homes to the devastating Eaton wildfire. Despite living next door to each other in nearly identical homes, the insurance paths they navigated in the aftermath of the disaster couldn’t have been more different.
Hamlin, a 51-year-old single mother, had been living in her 1,500-square-foot home for a decade when the fire ravaged the area. She had purchased private insurance with Mercury Insurance, which provided her with nearly a million dollars in coverage. The support from her insurance company was swift, with funds wired to her account almost immediately to begin rebuilding efforts. For Hamlin, the process, though emotionally taxing, felt manageable due to the financial support and guidance she received.
Wilson, on the other hand, faced a far more complicated and frustrating journey. The 44-year-old father-to-be had been unable to renew his policy with SafeCo last May, and after his insurer declined to offer coverage, he was forced into the California FAIR Plan, the state’s basic and much less comprehensive insurance program designed for those who cannot get private coverage. His premiums for the FAIR Plan were nearly 60% higher than Hamlin’s, but his coverage was less than half the value of what Hamlin had. Despite this, he was also required to purchase additional “wrap-around” insurance at his own expense to cover risks that the FAIR Plan didn’t protect against.
For Wilson, the recovery process has been mired in frustration. He faced months of delays, limited communication, and a lack of support from the FAIR Plan, which was overwhelmed by the rising number of claims after the wildfire season. The situation led to Wilson considering loans, potential lawsuits, and even a move out of California, all while trying to come to terms with the financial and emotional toll of the loss.
The stark contrast in the experiences of Hamlin and Wilson illustrates the growing problem facing homeowners in California as they attempt to navigate the ever-evolving landscape of home insurance. As wildfires, hurricanes, and other natural disasters become more frequent and severe due to climate change, many property owners are finding themselves either unable to afford or find private insurance.
The California FAIR Plan, intended as a temporary stopgap, has seen its numbers skyrocket in recent years. Between 2020 and 2024, the number of residential policies in the FAIR Plan more than doubled, reaching nearly 452,000 in 2024. While state officials have introduced new regulations to try and stabilize the market and encourage insurers to stay in California, the rise of the FAIR Plan highlights a growing gap between the haves and have-nots of home insurance coverage.
State regulators have acknowledged the issue, with Insurance Commissioner Ricardo Lara promising efforts to transition homeowners off the FAIR Plan and back to more robust, private insurance policies. However, with insurers pulling back from high-risk areas like California due to concerns over wildfire damage, the future remains uncertain for many homeowners, especially those like Wilson, who have found themselves caught in a system that offers little in the way of comprehensive protection.
For Wilson, the choice to buy in a supposedly low-risk neighborhood did not shield him from the uncertainty of living in an area increasingly at risk of catastrophic wildfires. Meanwhile, Hamlin, who was aware of the fire risks when she moved in, found herself luckier than many in her situation. Her decision to secure private coverage has afforded her a far more stable position in the aftermath of the fire, highlighting the unequal nature of recovery in a system where access to adequate insurance often hinges on luck rather than careful planning.
This disparity points to a larger issue at the heart of the insurance crisis in California: insurers’ complex risk models and the rising unpredictability of natural disasters. Experts warn that without swift, comprehensive changes to both the insurance market and mitigation strategies for climate change, the state could face an uninsurable future, leaving many homeowners to bear the brunt of rising premiums and limited coverage.
As Wilson contemplates a lawsuit against Southern California Edison, whose equipment is believed to have sparked the fire, he is also grappling with the idea of leaving California altogether. With a baby on the way, the stress of living in a region where insurance premiums are skyrocketing and coverage is inadequate has left him questioning whether staying in California is worth the risk.
For many Californians, the growing insurance crisis serves as a reminder that the security of homeownership no longer comes with the same sense of safety. With climate change exacerbating the risk of natural disasters and insurance companies adjusting to these realities, the path to recovery for homeowners like Wilson and Hamlin remains fraught with challenges—ones that will likely shape the future of homeownership in the state for years to come.