Newsome’s Fire Insurance Crisis Is a Terrible Thing To Not Exploit
Prefatory Questions
- Why did California insurance commissioners levy no assessments on carriers since 1995 to cover firestorm property losses resulting in a financially broke FAIR Plan by the 2025 Palisades Fire? Was this insurance crisis planned and allowed to simmer until the Palisades Fire and Trump’s second presidency?
- Why was an influx of homeless allowed in late 2024 in Palisades High Fire Zones?
- Why did Gov. Newsome block a California National Gud Firefighters Fast Response Team until 10 days after the fires broke out?
- Why did Gov. Newsome call a special session of the legislature purportedly to “Trump proof” the state’s global warming programs from federal DOGE (Dept. of Government Efficiency) cutbacks that would entail California suing the federal government while perplexingly asking Trump for $2.5 billion in FEMA funds in part to fund those lawsuits?
- Why did David Jones, California’s past insurance commissioner for two prior terms, and now pro-global warming director of UC Berkeley’s Center for Law, Energy and the Environment, refuse to impose assessments on insurers, and now in double-dealing fashion say: “insurers can’t increase their way out of the insurance crisis” that he created?
Interviewer Question: “(Is the California property insurance crisis) going to get worse before it gets better?
Answer: (Worse). Especially if you’re anywhere near trees (a forest). Everybody thinks of the wildfire area as the place where they see trees everywhere around mountains. But the concern is not the wildlife areas that don’t have a lot of properties in them. That is not a real concern in the great scheme of things. It is not that bad. The real risk area is the WUI (‘woo-eee’). That stands for Wilderness Urban Interface where the forest ends and then there is this collar around it where you’re abutting up against. It’s the transition zone where the wildfire starts out, where wildfire embers blow into the “Woo-eee.” That’s what Pacific Palisades is – a Woo-eee. It’s a transition zone to wildfire. So, a fire starts out in the forested area and the embers blow into the Woo-eee, and you get this house-to-house spread. So, if your property is in the Woo-eee you can sort of look at the greenspace on a map and imagine being within a mile and a half of a densely forested area; that’s the Woo-eee– those properties are going to have a very difficult time getting coverage”.
— Darren Nix, CEO, Steadily Insurance Company
If you made a bad satirical joke that California’s plan to bail out its underfunded high risk fire insurance plan by starting more fires to enlarge its existing 330,000 pool of high fire risk policy holders to spread the burden, it might be difficult to separate the joke from reality. This is because no one would laugh and upon second thought might believe it is credible.
Nonetheless, compound negligent government policies and decisions over decades have resulted in homes in Wilderness-Urban Interface WUI zones (defined above) becoming rows of tinderboxes when wildfire ignites. The tendency of such ember-driven fires to hop from house to house in a precise pattern evokes suspicions that some microwave beam is surgically striking fires. But there is no need for such high tech as wildfires are pulled like magnets to fuel sources such as stick built homes with shingle roofs, and “firenados” rush in to fill low air pressure areas. The one thing in common with the Palisades, Eaton Canyon and Lahaina fires is high density substandard wood framed structures that are not hardened against combustibility with almost no defensible space between structures and the raging fire. Albeit even concrete homes can be destroyed by 1,000-degree F heat generated in a fire vortex. But firefighters can stand near the vortex without being harmed.
To compound the riskiness of insuring a home in a WUI, a fire protection engineer inspected burned out structures at the Palisades and found them all to be stick-built houses that were non-code compliant with respect to vegetation abutting structures and combustible wood decks and fences. Vented attics that airborne fire embers can penetrate are also a contributory factor to loss by a convection fire. Most burned out homes should not have been able to buy fire insurance due to their massive non-compliance with building and fire codes. Conversely, structures that withstood the fire had concrete construction and had clear cut buffer areas around the house and no combustibles. Will insurance companies deny coverage to those homes which fail a post-fire audit of code compliance?
California’s public/private FAIR (Fair Access to Insurance Requirements) Plan had a total $449 billion net fire insurance liability exposure as of September 30, 2024. This does not even include the $35 to $45 billions of estimated property losses incurred by the infamous Pacific Palisades and the Eaton Canyon Fires that ignited on January 7, 2025.
The FAIR Plan and Newsome’s Re-Build Plan
What is the FAIR Plan? Thirty-five other states also have a FAIR Plan. It is not a taxpayer funded state agency. It is a mandated organization regulated by statute, with involuntary participants, of around 100 private property casualty insurers. It is regulated by an elected state insurance commissioner. Some of the major carriers have left California due to the high risk of insuring Wilderness-Urban Interface zone homes and its FAIR Plan being only 2 percent funded. FAIR writes policies for risks the private insurers will not write. So, if where you live is in an Urban Wilderness Urban Interface zone
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.
