Residents in Washington state are facing a murky future after home insurance companies dropped homeowners en masse due to uncontrollable risks of wildfires.
What's happening?
Local NBC affiliate KING 5 reported that state records showed "the Washington State Office of the Insurance Commissioner has received more wildfire-related policy complaints of people being dropped in the first half of 2024 than the last two years combined."
These developments have left homeowners struggling to find new coverage and have increased concerns over whether they can keep their mortgages or if they will be able to sell their homes.
To make matters worse, homeowners are being dropped without much warning or consideration for how these instances can create harrowing situations.
"No effort was made to contact me or to work with me," a man in rural Eastern Washington told KING 5 of how suddenly his insurer dropped him.
Insurance Commissioner Mike Kreidler told KING 5 that the state isn't tracking how many homeowners are being dropped, so his office isn't sure whether insurance companies are dropping clients at record rates for financial gain or due to wildfire risk.
"I'm not saying that we don't have issues out there, but how much is driven because of wildfire exposure and how much is driven by economic issues?" Kreidler said.
Why is this important?
Wildfires have increasingly become a concern across the United States, as human-caused rising global temperatures and changing weather patterns have made wildfires more severe and frequent across many regions.
The wildfire-reporting social media account for Washington's Department of Natural Resources noted earlier this month that the city of Spokane was forecast to tie for the fifth-most 90-degree days in its history this summer. It showed the unprecedented nature of the fire season the state is facing this year.
While insurance companies do face risks of financial loss due to wildfires, these actions are becoming far too common. Major insurance companies like Allstate, Nationwide, and State Farm are pulling coverage from high-risk areas, leaving many homeowners scrambling for alternatives. To compound the problem, finding a new insurer has proved to be difficult.
"I'm not the only one. I hope more people will yell and holler and say, 'This is wrong,'" Regge Egger, a homeowner in Plain, Washington, who was dropped by Farmers Insurance in May, told KING 5.
What's being done about this?
Washington has a last-resort insurance program known as the FAIR Plan, which is reserved for homeowners who are unable to receive insurance from any other companies. According to KING 5, "the number of homeowners on Washington's FAIR Plan has gone up in the last five years, jumping more than 200%."
The Insurance Commissioner also plans to start collecting data in the fall in an effort to address the increase in complaints.
Homeowners like Egger, who received homeowners insurance from USAA, have had to shell out mountains of cash to make their homes more fire-resistant. He told KING 5 that he believes these situations are an indictment of the insurance industry as a whole.
"If they only want to insure the sure things, that's not insurance. To me, if they want to insure in Washington, they should insure everyone," Egger said.
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