California Insurers Reduce Policies Amid Wildfire Crisis

California's worsening wildfire crisis has prompted several major insurance companies, including State Farm, Allstate, USAA, and Farmers Insurance, to either cancel or significantly reduce homeowners' insurance policies in the state. These decisions are driven by the increasing frequency and severity of wildfires, along with regulatory constraints that hinder premium adjustments for heightened risks. Consequently, California's FAIR Plan, the state-run insurer of last resort, has seen a significant rise in market share as homeowners search for coverage. The current wildfires in Southern California, including the Palisades, Hurst, and Eaton fires, have destroyed thousands of homes and led to mandatory evacuations, exacerbating the insurance crisis. This situation underscores the need for improved wildfire management and regulatory changes to ensure adequate coverage for residents. Legislative action is underway, with new rules requiring insurers to offer more coverage in high-risk areas by 2025.