{"id":10435,"date":"2025-01-21T09:59:58","date_gmt":"2025-01-21T16:59:58","guid":{"rendered":"https:\/\/jasonsblog.ddns.net\/?p=10435"},"modified":"2025-01-21T09:59:58","modified_gmt":"2025-01-21T16:59:58","slug":"why-california-wildfires-could-spike-already-high-wyoming-insurance-rates","status":"publish","type":"post","link":"https:\/\/jasonsblog.ddns.net\/index.php\/2025\/01\/21\/why-california-wildfires-could-spike-already-high-wyoming-insurance-rates\/","title":{"rendered":"Why California Wildfires Could Spike Already-High Wyoming Insurance Rates"},"content":{"rendered":"\n

What they’re doing in California is going to hit all of us. And my home insurance company American National has left Wyoming, and our broker has teamed with several insurers so we wait to see how this affects us. And it is a shame, as American National had a policy of giving a big rebate in the $300 range every year when you didn’t file a home or automobile claim. Consequently, I was looking into insurance companies related to the California fires, and there might be a play against State Farm<\/a> as they’re not publicly traded, and the OCGFC might be angling to get their hands on their profits.<\/p>\n\n\n\n

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\u201cThey\u2019ve spread the costs of these fires across the country,\u201d he said. \u201cAnd so, it does impact other states and other people in those states.\u201d<\/p>\n\n\n\n

Part of the reason for that is a cost that\u2019s likely to hit insurers fairly soon, and that\u2019s for what\u2019s known as reinsurance. <\/p>\n\n\n\n

\u201cReinsurance is what the insurance companies purchase to protect themselves from catastrophic events and going bankrupt,\u201d Rocky Mountain Insurers Association Executive Director Carole Walker explained. \u201cAnd we\u2019ve seen reinsurance rates go up at unprecedented levels.\u201d<\/p>\n<\/blockquote>\n\n\n\n

https:\/\/cowboystatedaily.com\/2025\/01\/18\/why-california-wildfires-could-spike-already-high-wyoming-insurance-rates\/<\/a><\/p>\n\n\n

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The wildfires devastating residential areas of Southern California aren\u2019t only going to impact those homeowners. Wyoming residents also can expect to see a spike in their already-high insurance rates.<\/h5>\n\n\n\n

By Ren\u00e9e Jean<\/p>\n\n\n\n

\"Fire
Fire air operations drop fire retardant on flames from the Palisades Fire along Mandeville Canyon in the Brentwood community of Los Angeles, Calif. (Photo by Jay L. Clendenin, Getty Images)<\/figcaption><\/figure>\n\n\n\n

Wyoming wallets have been on fire when it comes to homeowner\u2019s Insurance rates, with customers reporting their rates doubling and tripling in the Cowboy State<\/a>, even for longtime customers.<\/a><\/p>\n\n\n\n

Devastating wildfires this past season that burned more than 850,000 acres in Wyoming didn\u2019t help, either.<\/p>\n\n\n\n

The problem is not likely to be quenched by what\u2019s happening now in California, industry experts say. In fact, the destruction there is so large, some believe it could even have broader impacts on the nation\u2019s economy as a whole.<\/p>\n\n\n\n

\u201cI think it\u2019s going to affect the whole country,\u201d Ron Pinther told Cowboy State Daily.<\/p>\n\n\n\n

Pinther has been selling insurance for the past 17 years and recently retired from the industry.<\/p>\n\n\n\n

\u201cIt\u2019s my understanding that some of the big insurance providers in the state moved out of California, and some didn\u2019t renew a lot of those policies,\u201d Pinther said. \u201cSo, I don\u2019t know if people hopefully found insurance someplace else, but I think there\u2019s going to be a ripple effect. <\/p>\n\n\n\n

\u201cIf people have lost their house, and they didn\u2019t have insurance, they\u2019re not going to pay their mortgages.\u201d<\/p>\n\n\n\n

Those failed mortgages will travel upstream, Pinther suggested, affecting not just the companies that made those loans, but other investors as well. That could trigger a huge correction to the stock market.<\/p>\n\n\n\n

\u201cThe stock market has been over-inflated for years and it should have made a huge adjustment a long time ago,\u201d he said, adding that the kind of losses he\u2019s seeing on television are what makes him believe this could reach as far as the stock market.<\/p>\n\n\n\n

\u201cI\u2019ve heard the losses were as high as $135 billion,\u201d he said. \u201cAnd now, I\u2019ve just heard recently $250 billion. And I see it on television, neighborhood after neighborhood. Thousands of acres that have been devastated.\u201d<\/p>\n\n\n\n

Why Rates Are Likely To Rise<\/strong><\/h2>\n\n\n\n

Insurance regulations are meant to ensure a company\u2019s rates reflect the costs of doing business in a particular state. <\/p>\n\n\n\n

But the reality is a lot more complicated. <\/p>\n\n\n\n

A recent Harvard study<\/a> found that when huge natural catastrophes happen, annual premium increases seem to follow, particularly in states that have looser regulations, even if their risks might be comparable to states with lower premiums.<\/p>\n\n\n\n

Wyoming Department of Insurance Commissioner Jeff Rude told Cowboy State Daily that he thinks the ripple effects from the recent California fires herald price increases ahead.<\/p>\n\n\n\n

\u201cThey\u2019ve spread the costs of these fires across the country,\u201d he said. \u201cAnd so, it does impact other states and other people in those states.\u201d<\/p>\n\n\n\n

Part of the reason for that is a cost that\u2019s likely to hit insurers fairly soon, and that\u2019s for what\u2019s known as reinsurance. <\/p>\n\n\n\n

\u201cReinsurance is what the insurance companies purchase to protect themselves from catastrophic events and going bankrupt,\u201d Rocky Mountain Insurers Association Executive Director Carole Walker explained. \u201cAnd we\u2019ve seen reinsurance rates go up at unprecedented levels.\u201d<\/p>\n\n\n\n

Walker said she, too, expects ripple effects that will lead to higher premiums in other states, including Wyoming. <\/p>\n\n\n\n

\u201cThere\u2019s going to be that huge reinsurance bill,\u201d she said. \u201cAnd, I know it\u2019s a tough pill to swallow, but, as homeowners, we\u2019re just going to have to adjust to what it really costs to replace and rebuild your home at a time when the chance of having damage to your home is exponentially higher.\u201d <\/p>\n\n\n\n

Replacement costs have been affected by inflation, Walker added, which is ratcheting them up to new levels. They are among variables that insurance companies use to calculate rates.<\/p>\n\n\n\n

Rude added that Wyoming does have insurers with direct exposure to the California market as well. <\/p>\n\n\n\n

\u201cAllstate writes just over 4% of our homeowners coverage,\u201d he said. \u201cI thought that would be a little bit more than that, but it\u2019s 4%. Our biggest writers are State Farm and then Mountain West, and then Farmers and a couple others ahead of them.\u201d<\/p>\n\n\n\n

Farmers Insurance is Wyoming\u2019s third largest writer for homeowners insurance and has almost 10% of Wyoming market.<\/p>\n\n\n\n

Insurance Deserts<\/strong><\/h2>\n\n\n\n

Insurance providers hard hit in one state are likely to look more closely at risks in their other markets, Rude suggested, to make sure they are setting appropriate rates elsewhere.<\/p>\n\n\n\n

\u201cInsurers assess their risk every year,\u201d he said. \u201cAnd they may look at some areas and say, \u2018We want to write less business here. We\u2019re willing to take on more business there. They all have their own individual company modeling. It\u2019s an algorithm that they rely on to say, \u2018Where\u2019s the risk, and what risk can they afford.\u2019\u201d<\/p>\n\n\n\n

That kind of assessment isn\u2019t limited to fires. It also applies to risks from flooding, hail, and other problems. <\/p>\n\n\n\n

\u201cThey don\u2019t want to be too concentrated in any one area,\u201d Rude said.<\/p>\n\n\n\n

Wyoming, with more than 800,000 acres going up in smoke this past summer in various wild<\/strong>fires, including the Elk fire<\/a> and the Fish Creek<\/a> and Pack Trail<\/a> fires will likely be under that algorithm microscope.<\/p>\n\n\n\n

That\u2019s something Rude said Wyoming and other states are working to get a handle on.<\/p>\n\n\n\n

\u201cThey don\u2019t allow us or anyone to look at their algorithms, it\u2019s all proprietary,\u201d Rude said. \u201cOne insurer doesn\u2019t want the other insurer to know what they\u2019re doing. But we know it\u2019s happening out there.\u201d<\/p>\n\n\n\n

Rude said Wyoming was fortunate in that, even though a lot of acres did burn, very few structures were lost.<\/p>\n\n\n\n

\u201cWe are trying to do a data call nationwide, all states are trying to do a data call, to get some granularity on some of this information,\u201d he said. \u201cIt\u2019s not perfected yet. But we\u2019re hoping to get more data that would show what ZIP Codes are affected, to see if there are areas that are truly insurance deserts.\u201d<\/p>\n\n\n\n

\"\"
A neighborhood is reduced to rubble after burning in the Eaton Fire on Jan. 16, 2025 in Altadena, California. (Getty Images)<\/figcaption><\/figure>\n\n\n\n
\"\"
A Firefighter looks at a burned car while his college inspects a burned house from the Palisades Fire in the Pacific Palisades neighborhood on Jan. 15, 2025, in Los Angeles, Calif. Multiple wildfires fueled by intense Santa Ana winds continue to burn across Los Angeles County, with some containment achieved. At least 25 people have died, more than 12,000 structures have been destroyed or damaged and 40,000 acres burned. More than 88,000 people remain under evacuation orders. (Photo by Apu Gomes, Getty Images)<\/figcaption><\/figure>\n\n\n\n

Community-Wide Mitigation Efforts Can Help<\/strong><\/h2>\n\n\n\n

Preventing insurance deserts is something that communities as a whole can take a hand in, Walker suggested. <\/p>\n\n\n\n

Places like Story, Wyoming,<\/strong> where residents have reported difficulties obtaining affordable homeowners insurance<\/a>, for example, might want to consider a community-wide effort at improving fire safety.<\/p>\n\n\n\n

\u201cWe need to bring down the risk,\u201d Walker said. \u201cAnd that\u2019s not an insurance solution. That\u2019s a how do we follow the science, which shows us that if we do the right things, not just on our own property, but at a community level, that we\u2019re able to bring down the risk of someone losing their home.\u201d<\/p>\n\n\n\n

If those efforts can take place at a community level, it improves the chances that the overall risk scales go down enough for insurance companies to take those areas on. <\/p>\n\n\n\n

\u201cI think that\u2019s what we really need to be focus on long term is how do we bring down the risk, especially in states like Wyoming,\u201d she said. \u201cI mean, if you look at Pacific Palisades, that sagebrush, that slope, those homes packed tightly together \u2014 we could do very impactful mitigation steps.\u201d<\/p>\n\n\n\n

Avoiding California Mistakes<\/strong><\/h2>\n\n\n\n

The other key, Walker added, is to avoid making some of the mistakes California has made.<\/p>\n\n\n\n

\u201cIn California, they suppressed insurance companies\u2019 ability to price for the marketplace,\u201d she said. \u201cSo that led to large insurance carriers leaving that market.\u201d<\/p>\n\n\n\n

California has been working on reforms, Walker added, but those have not come along in time for the current conflagration.<\/p>\n\n\n\n

\u201cSo, for the rest of my states in the Rocky Mountain region, let\u2019s not get ourselves into that problem in the first place,\u201d she said. \u201cWe still have insurance companies willing to insure, because they can price for the increased costs to cover clients in a property insurance market where the chances for having a large catastrophic event are more.\u201d<\/p>\n\n\n\n

Rude echoed Walker\u2019s sentiment and said state-level solutions from the legislature are not something he\u2019s really looking at yet.<\/p>\n\n\n\n

\u201cThe commissioner in California had the authority, without the legislature,\u201d he said. \u201cHe had the authority already given to him to say, we are going to require insurers to renew in these areas. And the insurance company said, \u2018Well, we\u2019re no longer going to write fire insurance in your state.\u2019 So, you have to be really careful what you ask for, because I\u2019m not going to repeat their mistake. I\u2019m not going to ask for that authority. This is sort of a free market issue, where companies decide where to sell their products.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

What they’re doing in California is going to hit all of us. And my home insurance company American National has left Wyoming, and our broker has teamed with several insurers so we wait to see how this affects us. And it is a shame, as American National had a policy of giving a big rebate […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,31],"tags":[],"class_list":["post-10435","post","type-post","status-publish","format-standard","hentry","category-world","category-wyoming"],"blocksy_meta":[],"featured_image_src":null,"author_info":{"display_name":"Jason","author_link":"https:\/\/jasonsblog.ddns.net\/index.php\/author\/jturning\/"},"_links":{"self":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/10435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/comments?post=10435"}],"version-history":[{"count":1,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/10435\/revisions"}],"predecessor-version":[{"id":10438,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/10435\/revisions\/10438"}],"wp:attachment":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/media?parent=10435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/categories?post=10435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/tags?post=10435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}