- I'd like to stay here, I love this place.
To be forced out because I can't be insured
is not a happy prospect at all.
- [Narrator] Wildfires are changing California.
Last year alone, almost two million acres burned.
California wildfires cost insurance companies
more than $24 billion over the past two years
with the worst of the damage
linked to PG&E's electrical network,
and now, homeowners are paying the price.
Insurers are hiking up their premiums
or, in many cases, not renewing customers altogether.
That's leaving homeowners with little choice
but to pay triple or more their expected costs
for replacement policies,
and in some areas with no options at all,
many homeowners are making the choice
to simply not have insurance, and, instead,
are grappling with whether they can stay in their homes
and live with the risk of wildfires.
Christy Hubbard and her husband
moved to Grass Valley in 2017.
They bought a home,
expecting to live in a comfortable community.
Then, they got bad news.
- About six weeks ago, we got the notice
that said our insurance was gonna be dropped,
and that was quite the eye-opener for us.
There was no choice, it was simply, you know,
we're dropping your insurance,
and so, just literally, just about a week and a half ago,
we finally got new quotes or got quotes,
one of which was at 10,000, the other was at $13,000,
which was, holy cow!
- [Narrator] Hubbard is not alone.
Since 2015, insurers refused to renew
almost 350,000 homeowners
living in high-risk fire areas in California.
Kimberly Martinez is an insurance broker in Grass Valley
who's had first-hand experience
with the drastic industry changes.
She says the Camp Fire that destroyed Paradise last year,
just an hour from Grass Valley,
changed the way insurers view wildfire risk.
- Now, there's a lot of just judging it
based on the ZIP Code, and it's a blanket,
we're just not doing that ZIP Code anymore
because we can't make up for the level of risk.
We're getting close to 80, 90% of people
looking for a new policy.
- [Narrator] Of course, this isn't a totally new phenomenon.
Insuring areas prone to natural disasters
has always been complicated.
Florida's insurance market nearly collapsed in 2006
after some of the costliest storms in U.S. history.
Today, many of the big national home insurers
have fled the state.
It's not hard to see why insurers are nervous in California.
Last year, small carrier Merced Property & Casualty
went out of business under the weight of claims
from the Paradise Fire.
While a number of factors
contribute to California's fire risk,
one constant is PG&E.
The utility's equipment has started at least 1500 fires,
averaging more than one a day in recent years.
PG&E, which filed for bankruptcy protection in January,
recently took the unprecedented step
of shutting off power to more than 750,000
homes and businesses because of the wildfire risk.
- PG&E started shutting off the power last night
in more than half of California's 58 counties
because of what the company calls
an unprecedented wildfire danger.
- Well, this is day two of our power outage.
This is our generator, and, basically,
we come in, we have to turn the fuel valve on.
We start it up. (generator humming)
At this point now, our kitchen, our family room,
and our well will have power.
- [Narrator] The power stayed off
for more than two full days,
but PG&E defended its decision.
When inspecting their lines that were turned off,
they said they found more than 100 confirmed cases
of wind-related damage, and that this type of damage
could have sparked a fire.
For homeowners who, through all this,
still need insurance, they have a few options.
They can go with a surplus company,
like a Lloyd's of London insurer
or they can use the California FAIR Plan,
an option known as the insurer of last resort,
but that plan covers less
and costs more than a traditional policy.
In either case, annual premiums would likely go
from around $1000 to over 3000,
and for homeowners paying mortgages,
banks and lenders require insurance.
- It's got this ripple effect
down through real estate and new purchases
and people now leaving town,
and you can't get a rental
because nobody wants to insure the rental,
so yeah, I would definitely say
it's a crisis level in this community.
- [Narrator] Homeowners like Hubbard
are frustrated that insurers aren't taking into account
all of the fire prevention improvement
she's done on her house.
- What we are trying to do, of course,
is manage the defensible space.
Near to the house, you know, you're really keeping
your vegetation to an absolute minimum
and the other thing you're doing
is what they call limbing up,
which is, you can see here.
The very bottom of this tree,
we're cleared all the limbs.
- [Narrator] This is similar to the work
that PG&E is attempting around the state.
A spokesperson said the company has been meeting
and exceeding new state vegetation
and fire safety standards among other measures.
- It has nothing to do with the work that we've done.
It's not specific to my property, it's my ZIP Code
or, you know, the fire zone that we're in.
Yeah, that's a little frustrating, right?
It's just sort of like your best efforts aren't good enough.
It's tough beans, you know?
You're canceled because we can't take the risk.
- [Narrator] Hubbard's former insurance company,
Spinnaker, declined to comment.
- Now we have a new reality that we have to deal with,
with higher fire risk, with higher costs.
If it becomes so extraordinarily expensive to live up here,
how many people will move out?
And that very infrastructure and community
that I hoped to join and make part of my life,
will it have to dissipate?
It's only really a question of time.
(dramatic orchestral music)