INSURANCE EMERGENCY - California homeowners are struggling to find affordable coverage while Sacramento explores a new frontier in climate policy: insuring urban forests. The question is not whether trees matter. It is whether California has its priorities straight.
California has an insurance emergency. Homeowners are losing coverage, premiums are climbing, and families in wildfire-prone communities are increasingly confronting limited insurance choices. After devastating fires, some homeowners have discovered that surviving the flames was only the beginning of their battle. Sacramento's priority should be obvious: fix the homeowners insurance market.
Instead, California regulators are exploring something remarkable insurance for urban forests.
Yes, trees.
The California Department of Insurance, working with UC Santa Cruz's Center for Coastal Climate Resilience, has explored whether insurance products could protect urban forests and other forms of “green infrastructure” against threats including extreme heat, drought, storms and pests. There may be legitimate reasons to study innovative ways of protecting public infrastructure and natural resources, but California has a much more urgent insurance problem: people are struggling to insure their homes. That should come first.
When Homeowners Can't Find Insurance
California does not suffer from a shortage of climate programs, task forces, studies, regulations or ambitious policy experiments. It suffers from a shortage of affordable and dependable homeowners insurance. For too many Californians, the insurance market has become another source of anxiety as homeowners worry about whether their policies will be renewed, how much premiums will increase and whether adequate coverage will even be available.
The California FAIR Plan was created as insurance of last resort. It should not become California's insurance model of the future. The Department of Insurance has undertaken reforms intended to bring insurers back into wildfire-distressed communities, and state officials say insurers have made commitments to expand coverage. Those reforms should be judged by results, not announcements.
Can homeowners obtain policies? Are more companies competing for their business? Are families able to move from the FAIR Plan back into the traditional market? And when disaster strikes, are legitimate claims being handled fairly and promptly? Those are the measurements Californians should care about.
Fix the Insurance Market We Already Have
California government has a familiar habit: when an existing system isn't working, policymakers announce another initiative. But homeowners don't need another initiative. They need insurance.
A family receiving a nonrenewal notice does not need another symposium about climate finance. A homeowner forced onto the FAIR Plan does not need another government report. A wildfire survivor trying to rebuild does not need another acronym. They need a functioning insurance market.
California should concentrate its political and regulatory power on making homeowners insurance more widely available, strengthening consumer protections, improving wildfire mitigation, rewarding home hardening and ensuring insurers fulfill their obligations to policyholders. The state should also confront the underlying problems that make recovering from disasters increasingly difficult — slow permitting, expensive construction, infrastructure vulnerabilities and bureaucratic delays. These aren't futuristic ideas. They are basic responsibilities of government.
When Climate Policy Becomes Mission Creep
California should study climate risk. Insurers should account for genuine risks when determining exposure. Government should prepare communities for increasingly destructive disasters. But climate policy cannot become an unlimited license for bureaucratic expansion.
Today policymakers are studying insurance for urban forests. Tomorrow it may be additional categories of “green infrastructure,” “natural capital” or environmental assets incorporated into increasingly complex insurance and financial systems. Before California travels further down that road, taxpayers and policyholders deserve answers: Who pays? Who benefits? Who receives the money when a triggering event occurs? How are premiums determined? Who decides what constitutes a covered event?
And most importantly, why should expanding experimental insurance concepts be a priority when Californians are still struggling to insure their homes? Innovation is not automatically progress. A new insurance product is not automatically consumer protection. And putting the words “climate resilience” on a government initiative does not exempt it from scrutiny.
Wildfire Victims Need Results
Consider the families devastated by the Palisades, Eaton, Camp and other catastrophic California fires. For them, insurance isn't an academic debate. It can determine whether they rebuild or walk away, whether they recover financially or spend years fighting, and whether a home representing decades of work can ever be replaced. These families should be at the center of California's insurance policy.
Sacramento should be asking how to prevent another homeowner from discovering after catastrophe strikes that coverage is inadequate, rebuilding costs are overwhelming or the claims process has become another ordeal. That means confronting difficult questions about wildfire mitigation, vegetation management, water infrastructure, building costs, permitting, catastrophe modeling, insurer solvency and regulatory policy.
Climate change can affect wildfire risk, but acknowledging climate risk cannot become a substitute for addressing the decisions government actually controls. California cannot regulate the world's climate from Sacramento, but it can improve vegetation management, strengthen water and emergency infrastructure, encourage homeowners to harden their properties, create defensible-space incentives, accelerate rebuilding permits, scrutinize insurance rates and hold insurers accountable when they fail policyholders. That's where government accountability begins.
California Must Decide What Comes First
This isn't an argument against protecting trees, environmental stewardship or studying climate risk. It is an argument about priorities. California's government has limited attention, limited resources and limited credibility. Before Sacramento builds new insurance concepts around trees and environmental assets, it should demonstrate that the insurance system protecting people's homes actually works.
That should also be a basic test for California's next Insurance Commissioner. Will homeowners come first? Will the next commissioner work to restore competition, expand private coverage, reduce dependence on the FAIR Plan and aggressively protect consumers? Or will California continue producing increasingly ambitious climate-insurance initiatives while homeowners wonder whether anyone will insure the house they spent their lives paying for?
California can debate climate finance, natural capital and insurance for urban forests later. First, Sacramento has a more fundamental obligation: make sure California families can insure their homes, survive a catastrophe and rebuild without facing financial ruin.
California's insurance policy should begin with one simple principle:
Protect the homeowner before insuring the tree.
That shouldn't be controversial. It should be common sense.
(Yonthan Mendal writes on Jewish community issues, antisemitism, Israel, and public policy. His articles focus on civic engagement, education, and issues affecting Jewish communities.)
