California’s former insurance commissioner has some ideas about how other states in the West can avoid what he calls the “uninsurable future.”
Dave Jones is no stranger to devastating wildfire. He was the Golden State’s insurance commissioner from 2011 to 2018, a tenure that included the Camp Fire, which was the state’s deadliest blaze and destroyed the northern California town of Paradise.
He called the L.A. Fires a “heartbreaking,” “terrible disaster” – but not a risk unique to California.
“I think the entire West is facing these risks,” he said. “I think It would be a mistake for any part of this country to view this as a California-only problem.”
To stave off the serious insurance problems his state has seen, he had several recommendations for other Western states. For one, they should establish so-called FAIR (Fair Access to Insurance Requirements) plans, insurance of last resort for those who are kicked off their insurance or can’t find anyone to issue a policy.
California has one, and enrollment in recent years has been growing quickly – with total insured exposure jumping over 60% in a single year to $458 billion in September 2024.
But such plans aren’t a solution on their own. Jones thinks the federal government should establish its own program of reinsurance – insurance for insurers to protect against massive claims – for state FAIR plans, as well as provide subsidies to policyholders in a way akin to the Affordable Care Act’s premium subsidies.
“Some people can't afford the FAIR plan insurance, because, again, it's the riskiest of the risk that it's covering,” he said.
He also said that states need to require insurers to take mitigation measures like home hardening and prescribed fires into account in their underwriting models, which Colorado is pursuing. In a recent op-ed for the New York Times, he argued that insurance companies should not be allowed to invest in or cover fossil fuel companies.
“That makes no sense because it's the fossil fuel industry whose emissions are driving the climate change that's making it impossible for insurance companies to write insurance in many places,” he said.
But ultimately he sees the insurance crisis as just a symptom of the larger climate crisis.
“We're not doing enough fast enough to transition from fossil fuels and greenhouse gas-emitting industries,” he said. “Those are driving higher temperatures. Those are driving more extreme severe weather events, whether it's hurricanes, tornadoes, floods, extreme heat, severe convective storms, wildfires, drought. Pick your peril.”
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, KUNC in Colorado and KANW in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.