Napa, CA – Louise Hamlin and Chris Wilson were once neighbors in a charming, historic neighborhood in northwest Altadena. Both owned nearly identical English-style cottages, built in 1925, complete with welcoming porches and Palladian windows. But when the Eaton wildfire ravaged the area, both their homes were reduced to rubble and ash. The community they once knew is now gone.
The wildfire forced both homeowners to confront not only the devastation of losing their homes but also the stark contrast in their insurance recoveries. Hamlin, a 51-year-old single mother, was covered by a private policy with Mercury Insurance. She has already received nearly $1 million in payouts and is in the process of searching for contractors to begin rebuilding.
On the other hand, Wilson, a 44-year-old who had purchased his home just five years ago, was left to rely on the California Fair Access to Insurance Requirements (FAIR) Plan, a state-run program designed for homeowners who cannot get private insurance. After his insurer, SafeCo, declined to renew his policy last May, Wilson was forced into the FAIR Plan, which offers minimal coverage at much higher premiums. For him, the path to recovery is clouded by the looming threat of loans, lawsuits, and even the possibility of relocating his family out of California altogether.
As California grapples with an increasing number of wildfires, hurricanes, and other natural disasters, the struggle for homeowners to secure adequate insurance coverage has intensified. The issue is particularly critical in California, where some of the state’s major insurance companies have ceased writing new policies or are refusing to renew existing ones. According to state officials, the number of residential policies under the FAIR Plan has more than doubled from 2020 to 2024, reaching nearly 452,000 policies by last year.
The stark differences in how Hamlin and Wilson are navigating their rebuilding journeys underscore the growing inequality in insurance coverage, with devastating consequences for those affected by wildfires. While Hamlin’s private insurance policy has offered a cushion in the form of a substantial payout, Wilson is left with only a fraction of that coverage through the state’s bare-bones program.
For Wilson, the financial strain of the higher premiums and limited coverage has created an uncertain future. He paid nearly 60% more in premiums related to the fire compared to Hamlin but is receiving less than half the coverage.
“The difference in coverage is night and day,” said Amy Bach, executive director of United Policyholders, a consumer advocacy group. “That’s why people call it ‘The Unfair Plan.’”
The FAIR Plan was originally designed as a temporary safety net for homeowners who couldn’t access private insurance, but with the increasing frequency of wildfires, it has become a more permanent fixture for many. The state-run program’s higher premiums and basic coverage are ill-equipped to meet the needs of homeowners trying to rebuild in the wake of catastrophic events like wildfires.
In a statement, SafeCo’s parent company, Liberty Mutual, acknowledged “difficult but purposeful business decisions” made in California but declined to comment further on individual policies. Mercury Insurance also did not respond to requests for comment.
Janet Ruiz, spokesperson for the Insurance Information Institute, defended the FAIR Plan, stating that California is fortunate to have such a program in place, particularly when compared to the risk of homeowners having no insurance at all.
State Insurance Commissioner Ricardo Lara emphasized that the California Department of Insurance is working to ensure claims are paid out and to help homeowners transition from the FAIR Plan to more comprehensive private policies. Despite these efforts, the increasing reliance on the state-run plan has raised questions about its long-term sustainability.
For homeowners like Wilson, the situation is dire. With a pregnant wife and a family to support, the uncertainty surrounding his insurance situation has left him questioning whether he can remain in California. The financial burden of rebuilding without adequate insurance coverage, combined with the prospect of lawsuits and potential debt, has cast a shadow over his family’s future.
Meanwhile, Hamlin, who has already received her payout, is cautiously optimistic about rebuilding, despite the emotional toll the fire has taken. She remains focused on finding the right contractors and navigating the process of restoring her historic home.
However, the future remains uncertain for many California homeowners as wildfires, hurricanes, and other climate-driven disasters continue to increase in frequency. The state’s insurance crisis presents a growing challenge for both residents and lawmakers, who must balance the need for comprehensive coverage with the reality of increasingly volatile weather patterns and a rapidly changing climate.
As the rebuilding efforts continue in Altadena and across the state, the stories of Hamlin and Wilson serve as a powerful reminder of the deepening divide in access to insurance and the growing struggle faced by homeowners in fire-prone regions. The need for reform in California’s insurance market has never been more urgent.