Homeowners in Santa Cruz, California, are stunned after learning that their insurance rates may be skyrocketing.
What's happening?
Five years after the devastating CZU fires, homeowners have struggled to insure their homes, according to Lookout Santa Cruz. Numerous families had their homes burned down in the blazes, and their insurers dropped them after paying out their claims.
Many enrolled in the FAIR Plan, which is California's last-resort fire insurance policy funded by a pool of private insurers. However, the plan is less comprehensive and more expensive than typical commercial insurance policies. Now, the FAIR Plan has proposed new premiums, with an average increase of 35.8%.
One couple, Tony and Mary Madden, told Lookout that their old policy with Farmers was $2,000 per month. After getting dropped, they switched to the FAIR Plan with additional insurance and paid $14,900 monthly.
"I was sick to my stomach," Madden told the outlet.
With the potential rate hikes, the couple is looking at a new monthly cost of $21,000.
Why is insurance important?
Human activity has led to the overproduction of heat-trapping gases in our atmosphere. Our reliance on dirty energy sources like gas and coal has especially driven temperatures up. As a result, extreme weather events have been devastating communities across the world, including Santa Cruz.
Wildfires, floods, and droughts threaten our homes, our food supply, and our health. Experts say that the issue of extreme weather will only get worse if we don't take action.
As natural disasters become supercharged, many insurance companies have been deserting customers or charging them eye-watering premiums.
Some Santa Cruz residents have had to move away from their longtime homes. It is too risky to live in the area without insurance, but many people can't afford the prices they're being charged.
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Under $1K 😎 And it's not just in California; other cities across the country have been experiencing an exodus because of extreme weather.
What's being done about insurance?
As the issue of rising insurance rates persists, people have become wary of big corporations. Some homeowners have had to take measures to protect their homes from fire damage since many insurance companies drag their feet on claims.
For example, one California homeowner created an underground dome house using an old method that makes the shelter fire-resistant.
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