By Alana Semuels
Insurance companies were worried about many of the homes in the Pacific Palisades neighborhood of Los Angeles long before this week’s devastating wildfire burned through the area, ravaging homes and forcing evacuations. The Palisades, because of its location next to the brush-heavy Santa Monica Mountains and the high value of its homes, was too vulnerable to fires to insure at permissible rates without the companies losing money. Insurers including State Farm, which dropped nearly 70% of policyholders in Pacific Palisades in July 2024, refused to offer new insurance plans or renew old ones.
As a result, many homeowners were forced to obtain coverage from the state’s insurer of last resort, the California Fair Access to Insurance Requirements (CA FAIR) Plan, which covered 1,430 homeowners in the Pacific Palisades zip code of 90272 in September 2024, an 85% increase from 2023. The FAIR plan insures homes against fire but has higher premiums than traditional home insurance and only covers up to $3 million in damages for residential properties.
Like many other insurers o…