California Squeezes Private Money Out of Wildfire Rebuilding Efforts
California Democrats are incensed at Congressional Republicans’ musings that they might condition federal aid to Los Angeles fire victims on the state making policy changes relating to forest management and water infrastructure.
Yet many of California’s own policies, both those on the books pre-disaster and those adopted after the fire, are already at work limiting the amount of private money that could be flowing to rebuilding efforts—leaving homeowners more dependent on those potentially politicized federal funds.
This is most obviously the case with the state’s decades-old, voter-approved insurance regulations.
As Reason covered last week, these have prevented insurers from accurately pricing the risk of wildfires into the premiums they charge homeowners. More recent regulations also require insurers to issue and renew policies in wildfire-affected areas.
The result is that the state’s largest insurers have scaled back their business in the state, including by canceling thousands of policies in communities that have since been devastated by this year’s fires.
That means at least some homeowners will be left trying to find the funds to rebuild their destroyed homes without any hope of an insurance check coming their way. Others on the state-managed, privately funded FAIR plans—which caps coverage at $3 million—may well receive payouts that don’t cover the full cost of rebuilding their homes.
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