Thoughts from the Editor’s keyboard;
There’s a perfect storm of risks in California and a fundamental societal reset is required before property owners in California can insure their homes against wildfires. Even the super rich are being refused insurance, at any price, on their luxury houses. But it doesn’t have to be this way.
For decades wooden framed houses have been constructed across the USA and Canada. Once the rebuild costs were modest, the timber was relatively cheap. Those days are gone however, plus people have a higher expectation of what a wooden house can be, in terms of modern gadgets, aircon, quartz worktops, steel RSJ supported extensions, vast entertainment areas, impress-your-friends glass stairways, huge garages, rental unit basements etc.
As L.A. and other California cities have expanded in population, crime levels etc wealthier homeowners have headed for the hills. Obviously the risks are higher when it comes to landslides, floods or fires in canyon areas. So too are rebuild costs, it takes far longer to get materials to the site, building code regs are tighter too.
In a time when real estate values in California have soared to over $1 million for a modest apartment, the insured risk itself has soared, plus the associated risks to vehicles, human life and customer relocation for up to one year whilst rebuilds take place has also risen exponentially.
The “head for the hills” property development trend is a riddle that politicans in Democrat run California have failed to solve and show no signs of doing so. Call it white flight, call it WFH or eco living if you stick a wind turbine on your garage to heat your pool – the result is the same: Expensive homes in remote areas, surrounded by trees, with roads so narrow a fire truck takes 90 minutes to get there.
THE RISK TO LIFE FROM DEI POLICIES
Let’s not waste words; DEI hiring costs lives. The moment you recruit dozens of senior level people whose primary objective is to change the behaviours, speech and thoughts of others, then the job takes a back seat. Trans Pride parades replace forensic accounting on public sector budgets and supplier contracts. Overweight, unfit firefighters or soldiers don’t perform well in emergency situations. But that’s OK, because we don’t want to offend anyone by testing their ability to carry 60lbs of weight over a measured distance in hot weather.
There isn’t space here to get into the internecine battles for control of California’s water supply over the last century or so. Suffice to say that business usage tends to supercede any notions of holding reservoirs or underground cisterns of public drinking – or firefighting – water on standby. Seems the Roman engineers were smarter in Constantinople AD100 than the Ivy League educated CEOs and politicians in AD2000.
Add on a little `rewilding’ agenda when it comes to forest brush management and you have the perfect firestorm, just waiting to happen. In some cases controlled burning of overgrown forest brushwood, fallen branches, trees etc can help, but it’s a double-edged sword in valleys and canyons where sudden winds can effectively act as a funnel, fanning any flames.
Then there’s the problem of human arson. It appears that several dozen angry/mentally ill people are wandering around with lighters and bottles of petrol. It isn’t a new problem, some people love to see things burn. What has changed is the revolving door of justice in California, as “community sentences” or almost immediate parole replaces prison terms. You cannot keep educating criminals that arson effectively goes unpunished. Repeat offenders need to be held in secure units for years, not months, and opportunists who delight in exploiting any wildfire by making things worse during an emergency need to face sentences of 5 years minimum. No parole.
Until California learns lessons from Argentina and El Salvador in terms of jailing violent criminals, nothing will change.
PASSING THE COST ON TO OTHER POLICYHOLDERS WILL NOT WORK
The insurance companies in the US Property sector have been walking away from California for a few years now. Who can blame them? It’s the same story every few months; fires simultaneously break out, an underfunded fire service tries to fight them, climate change is blamed and then the arrests for arson begin a few days later as the video footage and witness reports are collated.
The temporary solution seems to be the change the rules on reinsurance, so that other insurers – presumably from out of State – can assume some risk, thus relieving pressure on the few insurers still in the California property sector. But why should policyholders living in Vermont or Illinois pay more to insure their houses, so that Californians can get some type of cover for fires? This is socialism basically; general taxation is applied and it inevitably increases to pay for services and subsidies elsewhere.
California is by GDP a country within a country. It needs to put its own house in order on homelessness, crime, mental health, water infrastructure and much more. The United States is unique in that each State can decide on many laws and regulations by itself, overriding the Federal government in some respects. It has the power – and budget – to organise a well funded fire service, with its own aircraft, independent water supply, and staffed by physically fit, well trained people who have experience in the armed forces, oil and gas industry etc.
The State of California can choose to deport non-US citizens found starting fires or recklessly endangering life, forests, or damaging infrastructure. It chooses not to, identifying as a “Sanctuary State.” That will cost more lives in future.
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