California fires highlight insurance issues across nation, including in New Jersey
MANVILLE, N.J. — The California fires are highlighting a serious issue across the nation as insurance carriers drop coverage or decide not to renew policies based on risk.
New data indicates non-renewal rates are being driven by an increase in climate-related weather disasters, and some say that could have a ripple effect in the Tri-State Area.
Ida survivor still fighting for insurance money nearly 3 years later
Across Manville, there are empty lots. Homes ravaged by Hurricane Ida have been torn down, and others still being rebuilt.
Ida survivors in the area say their hearts break for the California fire victims.
"I feel bad for the people based on my experience through natural disasters," Ida survivor Eric Vaughn said.
Vaughn says nearly three years after Ida destroyed his home, he's still fighting for federal and insurance money.
"It took forever. One-third is what they offered me at my original go-around of what I needed to rebuild, and it wasn't until I threatened to report them to the Department of Banking and Insurance that they finally gave me what I needed to rebuild my house properly," he said.
It's not just Vaughn still struggling and rebuilding in Manville.
"It's going to be a nightmare"
Experts say as disasters increase across the country, prepare yourself in changes in your insurance policies.
"Based on climate change and based on the insurance market now – think about this, every time there's a disaster in California, those same companies are doing business in New Jersey. They spread the loss," New Jersey Sen. Jon Bramnick said.
Bramnick sits on the state commerce committee dealing with insurance law. He says that loss will more than likely be passed down to policy holders.
"It's going to be a nightmare for a lot of reasons. First, either you won't be able to get coverage or you'll have to go to the coverage of last resort, which is a state-sponsored type program," he said. "Or you'll get coverage with a high deductible, a high what we call co-pay, and a low cap."
Gary La Spisa with the Insurance Council of New Jersey, a nonprofit trade association for carriers, says, "As the pattern of severe weather events continues to grow and replacement costs continue to climb, property insurance premiums will have to keep up in order to adequately protect consumers when disaster strikes."
While Bramnick says he hasn't seen carriers fleeing New Jersey, he says they are asking for rate increases.
Insurance for California fire victims
Long before Tuesday, California's insurance market was troubled. While the magnitude of the loss from the wildfires isn't known, industry experts say insurers are likely on the hook for billions, deepening the crisis.
"My primary concern at this very moment is to ensure that wildfire survivors receive the insurance benefits to which they are entitled to," Insurance Commissioner Ricardo Lara said.
Another concern is that insurers will drop homeowners.
Lara issued an order Friday preventing that for fire survivors. For one year, insurers can't cancel or refuse to renew policies for homes in a zip code in or adjacent to the fire perimeter.
"The last thing you should be worrying about is your insurance," Lara said.
State Farm told CBS News New York in a statement, "Our hearts and thoughts go out to the people and communities affected by these fires, as well as the firefighters, first responders, and volunteers who are working tirelessly to contain the fires. State Farm is here for our customers and our focus is on helping people."
More information can be found on State Farm's website.
