In a concerning development highlighting California’s ongoing wildfire insurance crisis, it has come to light that even the state’s own firefighting facilities are unable to secure fire insurance. The revelation emerged during a state Senate budget subcommittee hearing in Sacramento, where the administration of Governor Gavin Newsom sought approval for $11 million to replace a kitchen at Ishi Conservation Camp. This camp, located in the remote Sierra Nevada foothills of Tehama County, serves as a training ground for inmate firefighters.
Typically, the California Department of Forestry and Fire Protection (Cal Fire) funds building maintenance through bonds based on property value. However, in the case of the Ishi project, this funding mechanism was not feasible due to the inability to secure insurance coverage for the facility. Victor Lopez, an analyst from the Finance Department, informed lawmakers that insurance underwriters were uninterested in offering policies for the region due to perceived fire risks. Even the insurer of last resort, FAIR Plan, failed to meet the requirements of bond underwriters.
State senators from both parties expressed incredulity at the situation. Republican State Senator Brian Dahle remarked, “We can’t get fire insurance at a fire station that’s going to be manned by firefighters. That’s where we are in California. That, to me, is crazy.”
Cal Fire’s insurance troubles add to the mounting pressure on lawmakers to address the exodus of property insurers from the state, a trend that regularly makes headlines with announcements of policy non-renewals or moratoriums on new coverage. Insurance Commissioner Ricardo Lara permitted insurers to raise rates based on future projections of fire damages last year, but despite these measures, companies continue to exit the market.
Democratic State Senator Josh Becker emphasized the need for recognition of direct fire mitigation efforts, pointing to his bill aimed at incentivizing property owners to implement measures such as installing fire-resistant roofs and building fire breaks.
The issue at Ishi Conservation Camp may only be the beginning. While only one other Cal Fire facility has reported similar insurance problems so far, the Department of General Services has identified 16 projects statewide, 11 of which belong to Cal Fire, that may face difficulties in obtaining fire insurance.
As a response, Cal Fire and the Department of Finance are conducting a review of all maintenance and upgrade projects seeking funding this year to assess potential insurance challenges. Mike McGinness, Deputy Director responsible for Cal Fire, highlighted the importance of proactive measures given recent trends in the insurance industry.
Despite the strain on state finances, lawmakers have largely supported Cal Fire’s increasing demand for funds, particularly amid efforts to bolster firefighting capabilities to combat intensifying wildfires. However, with Cal Fire facing a substantial and growing maintenance backlog, questions have arisen regarding the urgency of all proposed projects, especially considering the state’s significant budget deficit.
Helen Kerstein, Principal Fiscal and Policy Analyst with the Legislative Analyst’s Office, urged lawmakers to carefully evaluate the necessity of all new projects proposed by Cal Fire, given the potential strain on the general fund amidst a challenging fiscal landscape.
