How California’s growing wildfires will affect homeowner’s insurance in Santa Cruz

SANTA CRUZ, Calif. (KION-TV) -- The wildfires in Los Angeles have sparked many questions for homeowners living in fire prone areas like Santa Cruz County. 

With many insurance companies already pulling out of the state, people are concerned about rising premiums and the threat of losing coverage altogether. 

In areas like Santa Cruz, rising insurance premiums are pushing homeowners to the edge. Some are forced to rely on California’s Fair Plan, while others fear their policies could be entirely canceled.

"My insurance, in the past year and a half has gone up 500%, went from about $1,200, annually to, $7,000 annually," Don Baker lives in Boulder Creek said.

As premiums rise, many homeowners worry they’ll be priced out of their homes.

"Taxes and home insurance is 50% of my mortgage, and people aren't going to be able to afford when their insurance exceeds the cost of their mortgage," Baker said. "People are going to have to sell and move."

While the crisis continues, insurance experts are hopeful that recent reforms will provide some relief. However, it is still unclear when those changes will take place.

"With the insurance reform, we hope that it stabilizes. that's what we're hoping to get back to a more traditional policy," Ted Herzon Farmers Insurance Agent and owner said.

These reforms include risk-based modeling and new technologies to better assess premiums.

"A lot of companies use what we call a fire line score or a protection class, which, a protection class should be, closest responding fire station is their fire hydrant," Herzon said.

Experts are urging homeowners to take proactive steps to reduce their risk and protect their properties. 

"Minimize the risk at the property, like, wildfire mitigation as far as keeping your property, clear of, you know, fuel or dry debris, keeping trees, trimmed in away from the property," Herzon said.

The thought of losing coverage is prompting many to sell and move out of the area.

"My neighbor, he hasn't lost his insurance yet," Baker said. "But he's worried and he did say he's going to sell his house and move if he gets dropped from his current carrier and he's not going to do the California Fair Plan, he'll sell and move, Baker said.

Baker lost his insurance about a year and a half ago, and seeing the wildfires in Los Angeles has left him scared.

"I can't have my double again or triple, as it's said, as it's done over the last year," Baker said.

Insurance agents are adapting to new requirements after the recent wildfires in Los Angeles.

"In the past, we would technically we would quote a policy based on the address you'll pull out of that information and now the, carriers are asking for images and, you know, up to date of any safety features of the house," Herzon said.

"It’s unclear whether Santa Cruz homeowners will face a rate hike following the Los Angeles wildfires. 

Statement from Assemblymember Pellerin regarding insurance coverage in California:

“I am truly saddened by the tragic events taking place in Southern California, and my heart goes out to all the victims of the fires. That fear of wildfire devastation is still very much on the minds of my constituents in the Santa Cruz Mountains and communities in Assembly District 28,” Assemblymember Gail Pellerin said. “We have made great strides to modernize California’s insurance market, recognizing climate change with intentions of increasing insurance availability in 2025. It is truly tragic that these horrific fires are devastating our state at the same time that we are so close to getting insurance companies back to California writing policies. It is uncertain what impact this catastrophic event will have on these efforts. I plan on being fully engaged in the recovery work necessary to restore our insurance markets.”