By Jessica Shona-Stewart

Diana Still had faithfully paid her home insurance for years. But recently, the Placerville resident received notice that her insurer was dropping her. She soon learned that new coverage from a different provider would cost $20,000 a year, more than triple her prior annual payment.

“I literally just put my head in my hands and cried,” said Still.

Insurance companies are exiting California after taking a devastating hit from several wildfires throughout the past seven years, leaving homeowners in El Dorado County concerned for the future.

El Dorado County is known for its lush forests and wildlife – and as one of the most fire-prone counties in California. The Caldor Fire in 2021, one of the most recent wildfires in the area, blazed for 60 days and burned over 219,000 acres.

The fire affected several El Dorado County communities including Grizzly Flats, Strawberry, Sly Park, South Lake Tahoe, Pollock Pines and many more.

The Caldor Fire was just one of the many instances where insurance companies took tremendous financial hits, leading to the personal disasters that many El Dorado County homeowners are dealing with today regarding their policies.

Farmers Insurance agent Sean Smith said that insurers are looking at different qualifying factors today when issuing policies.

Agents used to insure homes largely based on factors like distance from fire stations but now homes are being qualified based on the materials used to build the house, such as wood, according to Smith.

“I mean, if you take a look at the old story of the three pigs … we are in a wooded area that burns and fires,” Smith said. “So why are we building homes out of wood? The big bad wolf is the fire here and brick certainly is set to survive in a scenario like that.”

Wood roofs were very common even 20 years ago throughout California but are rare today, according to Smith.

As insurers raise standards for the composition of homes, Smith hopes that there will be restrictions on the materials used to build homes. There are already some counties that have put these rules into place.

Tougher qualifying factors are one of the main reasons homeowners like Diana Still are struggling to find a reasonable insurance quote.

Still considered trying insurers under the California FAIR Plan. As the plan’s website puts it: “For most homeowners, the FAIR Plan is a temporary safety net – here to support them until coverage offered by a traditional carrier becomes available.”

Still was unable to find a reasonable quote and has since given up on her search.

Still recently canceled her existing insurance and decided to go through her mortgage company’s insurance for only $2,200 per month but that only covers the remaining balance she owes on the house.

“If it burns, it burns,” Still acknowledged. “It’s just stuff and I lose all the equity in my house but it’s a chance I have to take. You have to make decisions on if you can feed your family.”

Other residents in the county are experiencing a similar nightmare. Mark Martinez, a long-time El Dorado Hills resident, previously only had to pay $2,512 annually for insurance until he received the unfortunate news that his insurers were also leaving the state.

“They just walked away from the entire state because they were clearly losing so much money having policy owners that they can’t make it work,” Martinez pointed out.

His insurance agent suggested Farmers Insurance, which quoted him a price of $11,000 to obtain the same coverage as before, almost quadrupling his original insurance rate.

“I just happened to be caught in a crossfire, as are all these other people…and it’s extremely disappointing,” said Martinez.

Deputy Insurance Commissioner Michael Soller said making insurance widely available to all residents in the state is one of the top priorities for the department.

Soller noted that California Insurance Commissioner Ricardo Lara has continued to work on making insurance accessible and affordable for residents in high-risk fire zones such as El Dorado County.

Last September, Commissioner Lara came up with a Sustainable Insurance Strategy that would benefit all California residents and still direct attention to the ever-increasing climate issues, Soller said. The Commissioner hopes that this strategy will bring insurers back to fire-prone areas and give better options for insurance, according to Soller.

“Our goal is to create a modern, sustainable insurance market that incentivizes safety and reduces risks,” Soller explained. “It does not retreat from high-risk areas but instead utilizes a long-term strategy to continue providing coverage to consumers.”