State Farm quits another 72,000 California homes

State Farm Insurance will discontinue coverage for 72,000 houses and apartments in California this summer. California’s largest insurer, which is based in Illinois, cites soaring costs, the increasing risk of wildfires and other catastrophes, and outdated regulations for its refusal to renew  policies on 30,000 houses and 42,000 apartments, according to CBS News.

“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws,” the company announced. “It is necessary to take these actions now.” California’s insurance commissioner has undertaken a yearlong overhaul of home insurance regulations aimed at calming the state’s imploding market by giving insurers more latitude to raise premiums while extracting commitments from them to extend coverage in fire-risk areas.  The California Department of Insurance said State Farm will have to answer questions from regulators about this decision.

2018 Carr Fire -- USFS photo by Brenna Jones
2018 Carr Fire — USFS photo by Brenna Jones

MyMotherlode reported that State Farm said it will work with Governor Gavin Newsom and Insurance Commissioner Ricardo Lara to develop reforms that better align insurance rates with risk. Levi Sumagaysay with explains that many California homeowners are just now  discovering that their policies are being canceled — and hundreds of thousands of others are stuck with a pricey option of last resort — and for them Commissioner Lara’s efforts to fix the market can’t come soon enough.

Lara has introduced two main regulations, with more to follow. The first, unveiled last month, will streamline rate reviews. State law gives the Insurance Department the power to approve or deny insurers’ requests to raise premiums. Insurance companies complain the process holds up requested increases caused by rising climate-change risks and inflation.

The second regulation will let insurers use catastrophe modeling — which combines historical data with projected risk and losses — along with other factors when setting their premiums. California is the last state to allow this catastrophe modeling.

“We’re undertaking the state’s largest insurance reform,” Lara said earlier this month. “We can no longer look solely to the past to guide us to the future.”

This new round of cancellations accounts for just 2 percent of State Farm’s policies in the state, and the company did not indicate which regions are hit hardest, nor its criteria for selecting non-renewals.

We reported last August that several major insurance companies had stopped accepting California homeowners for new policies because of growing wildfire risks. As the number of fires in the state increases and other factors escalate, insurance companies worry about the risk — and the expense.

Residents in high-risk fire areas or hurricane regions need homeowners’ insurance — and lenders require it. No insurance, no home loan. More people are moving into the interface, costing insurance companies too much to repair and replace houses while battling inflation, said Janet Ruiz with the Insurance Information Institute. Two insurance giants withdrew from California’s home insurance marketplace, explaining that increasing wildfire risk and soaring construction costs have resulted in their decisions to stop writing new policies in the state. “We take seriously our responsibility to manage risk,” State Farm said. “It’s necessary to take these actions now to improve the company’s financial strength.”

Will fire be the death of California’s wine industry?

The “beating heart of the American wine industry” has had to reckon with this question since 2017 when numerous wildfires spread across northern California’s famed wine country. The Tubbs, Atlas, and Nuns fires burned hundreds of thousands of acres, caused numerous deaths, and destroyed multiple wineries and vineyards in Napa and Sonoma counties.

The total acreage burned and widespread property damage caused the 2017 wildfire season to be the most destructive in California’s history. That record-breaking year was quickly surpassed by the 2018 and 2020 fire seasons. The 2020 season, in particular, also broke burn records in the other top American wine-producing states of Oregon and Washington, and even Canada in 2021. Wildfires in the years following impacted international wine markets as well, including Italy, France, and Australia.

University California Division of Agriculture and Natural Resources

Intense flames aren’t the only threat wildfires bring to vineyards; it’s also the smoke they produce. A condition called “smoke taint” causes wine grapes exposed to smoke to acquire “unmarketable smoky, burnt, ashy, or medicinal sensory characteristics,” according to the Australian Wine Research Institute (AWRI).

The international wine industry has made it clear that it views wildfires and smoke as existential threats, along with increasing water shortages and climate change as a whole. The industry has poured billions of dollars into research on ways to stave off the industry’s wildfire-caused death rattle. Examples of recent smoke-related wine research in the U.S. include a protective spray coating for grapes, detecting the compounds responsible for the undesirable taste, and using smoke sensors in vineyards for risk assessment.

Oregon State University smoke research
Oregon State University smoke research

Agriculture-based technological developments, however, can only do so much to keep a fire-sensitive crop alive after it’s planted on fire-dependent lands. Grapes, while not technically invasive, have invaded portions of the Western United States’ lands and have largely usurped once highly forested regions where fire played an important ecological role. As prescribed fire establishes a larger role in modern Western land management practices, how long can an industry based on fruit that needs a smokeless environment survive and thrive?

The birth of California’s wine industry is well-recorded: Spanish missionaries planted the state’s first sustained vineyards in southern California during the late 1700s using grapes native to Europe — to make sacramental wine. Wine production then exploded in the northern and central parts of the state during the Gold Rush, paving the way for California’s current top grape-producing counties of Fresno, San Joaquin, and Kern.

What’s not well-recorded is how agricultural land conversions cleared millions of acres of conifer and oak forests throughout the state to make way for vineyards and other crop fields. In Napa and Sonoma counties specifically, areas now known as the pinnacle of “wine country,” modern vineyards sit on land that once supported massive oak forests culturally maintained by the area’s various Indigenous tribes.

“While almost all of the valley oaks are gone from Napa — the savannas were largely cleared to make way for intensive agriculture in the late 19th century — a few pockets remain,” a New York Times article on the Napa Valley Historical Ecology Atlas said. “The oldest trees, dating back more than 300 years, were alive when the Caymus, Napa, Canijolmano and Mayacma tribes managed the valley to produce abundant acorns, deer, salmon, and other staples.”

The clearing of these woodlands was coupled with a government-mandated suppression of cultural burning, a kind of prescribed burning Native Americans used to promote culturally significant foods and resources within a landscape. After a century of fire suppression, the USFS has begun to understand how significant cultural fire is to promoting biodiversity and creating healthy landscapes.

“Colonization and subsequent governmental fire policy mandates have disrupted the cultural use of fire, which in turn has disrupted ecological functions where those fires are absent,” USFS research said. “As society grapples with the devastating impacts of wildfires and the loss of biological diversity, many Indigenous people see traditional fire use as a key to mitigation of devastating losses while retaining traditional livelihoods associated with burning.”

In hopes of preventing future megafires, California increases prescribed burns throughout the state, including wine country. Even though research shows smoke from prescribed burns tends to be less harmful and toxic compared with smoke from wildfires, the grapes themselves don’t seem to care.

“Studies have shown that grapes need to be exposed to only a single smoke event, irrespective of the source, to become ‘tainted,’” AWRI said. “Bushfires, forest fires, planned burns, grassfires, and agricultural burns can all cause smoke taint if smoke from those fires is present in a vineyard at a high enough level for a period of time. Current research suggests fresh smoke presents the greatest risk for smoke taint, but smoke that has drifted hundreds of kilometers has also resulted in smoke taint.”

Efforts have been made for fire planners and wine producers to work together to minimize smoke’s negative effects on wine grapes, but thus far have mostly been in vain. AWRI and other wine industry researchers recommend the best time to conduct prescribed burns to limit smoke taint  is during the height of wildfire season between May and October; before grapevine flowering and after grape harvest. The “usual” best times to set prescribed burns, mid-spring or in the fall, are the most at-risk times for smoke taint in grapes.

The contradiction is clear: Grapes, at least those that winemakers don’t want smoke-tainted, can’t exist in an area with regularly prescribed burns, e.g. California.

Grapes themselves are partly to blame for this. A concept called “terroir” has been used for centuries to describe the deep ecology behind why grapes grown in different places and in different ways acquire different qualities. Everything including temperature, soil, geology, elevation, water quality, wind direction, farming practices, and the winemaking process influences grapes and, by extension, the wine made from them. Even if researchers could 100 percent prevent smoke-taint issues in wine grapes, the grapes themselves would still be affected by the inevitable changes the fire-dependent landscape will experience in years to come.

The irony is that California does have native grapes, which thrived in the state’s pre-colonized and fire-dependent forests. In fact, the global wine industry wouldn’t exist today without California Wild Grapevines, as the species was used to save the European wine industry between 1870 and 1900 when most wine grapes were killed by leaf- and root-attacking aphids. Winemakers, in a last-resort desperate bid, used Califonia Wild Grapevine roots and grafted them onto European grape varieties. The result was a plant with the root resilience of a wild grape and the desirable taste of a European grape.

California wild grapes themselves, however, were originally discredited by European colonists for being too “foxy” and not containing enough sugar. But in a state destined to have more smoke, the more fire-resilient California Wild Grape, whose burnt vines can resprout, may soon be the California wine industry’s only option. One farmer in Sonoma County agrees and is experimenting with more than 30 different native grape hybrids in response to climate change.

The global wine industry is one of stubborn tradition. The industry’s desire to find easy “solutions” to existential problems without systemic change paints a worrying picture of the role California’s vineyards play in the state’s fight against future wildfires. Winemakers can only hide behind the industry’s $70 billion price tag for so long.

There comes a point at which economic benefit is outweighed by potential ecological destruction, and the industry will soon have to decide whether it will play a role in California’s solutions to megafires or actively hamper efforts to help make the state’s landscape healthy. Winemakers in California may soon have to answer the question of “when should this industry die?”

After 150 years, wolves back in southern California — thanks to wildfire

Wildfires don’t “destroy” the landscapes they burn through.

Wildfires can kill trees, vegetation, and occasionally wildlife. Flames can burn down homes and businesses in towns and neighborhoods. They can even level entire city blocks.

But wildfires don’t “destroy” acres of land. More often than not, fire paves the way for something new to take root; to grow back.

A new thing has taken root in the burn scar of southern California’s 2021 Windy Fire. The lightning-caused wildfire, which burned just north of the 2016 Cedar Fire east of Porterville, burned nearly 100,000 acres of the Tule River Indian Reservation and the Sequoia National Forest, killing an estimated 3 to 5 percent of the world’s giant sequoia population.

Windy Fire burn scar, NPS photo
Windy Fire burn scar, NPS photo

A keystone species — an organism that helps define an entire ecosystem — is calling the fire area home again, 150 years after being hunted and driven out. A pack of gray wolves, one adult female and four cubs, has been seen in the area, according to the California Department of Fish and Wildlife (CDFW). The pack is officially the state’s southernmost wolf pack and is more than 200 miles from the nearest separate wolf pack.

“CDFW investigated the reported location, found wolf tracks and other signs of wolf presence, and collected 12 scat and hair samples from the immediate area for genetic testing,” according to the agency. “The new pack consists of at least one adult female, who is a direct descendant of California’s first documented wolf in the state in recent history.”

This image is the first photo of the pack’s adult female:

Southern California wolf
Southern California wolf photo by Michelle Harris, Colibri Ecological Consulting

While the wolves’ return to the area is historically and ecologically significant, wolves finding home in a burn scar is reportedly a common occurrence, according to an article from Scientific American.

A lack of trees allows more sunlight to hit the soil and causes plants to sprout. The plants attract deer and other species, offering wolves ample eating opportunities. Burn scars can also act as prime den sites for wolves, with clear forests offering less obstructed views of their surroundings, intruders, and predators. And wolves aren’t the only animals to take advantage of a post-wildfire landscape.

“Other animals, such as wild turkeys, are attracted to areas soon after fire because they forage on seeds and invertebrates on the ground in the blackened areas,” said Chris Moorman, a professor of fisheries, wildlife and conservation biology at NC State University. Low-intensity prescribed fires can also increase abundance and diversity of certain plant species in forest understories.

west of Kernville

California this year got off easy — SO FAR

The acreage burned to date in California is less than a third of the state’s 5-year average, according to Cal Fire, and experts attribute the lower numbers to the historic winter storms and a record snowpack in the Pacific Southwest. But those “atmospheric river” storms resulted in huge fuels growth that could, with gusty autumn winds, mean wildfires into November or even December.

“Now is not the time for people to let their guard down,” said Brian Newman, assistant chief of Cal Fire’s Amador-El Dorado Unit. “We still have fire season ahead of us before we get into winter rains that would finally end it.”

Rim Fire, 2013. Inciweb photo
2013 Rim Fire, inciweb photo.

California’s dry, windy, and hot weather conditions from spring through late autumn can produce moderate to severe wildfires. Pre-1800, when the area was much more forested and the ecology also much more resilient, 4.4 million acres of forest and shrubland burned each year. California land area totals about 100 million acres; since 2000 annual burned acreage has ranged between 90,000 acres (0.09 percent of the state), and 1,590,000 acres (1.59 percent).  During the 2020 wildfire season alone, over 8,100 fires contributed to the burning of nearly 4.5 million acres of land.

According to the Sacramento Bee, with 317,191 acres burned so far this year, that’s under 30 percent of the 5-year average of 1.2 million acres for the same year-to-date period. Even though this season’s totaled a “normal” number of new fires, the extra precipitation and cool nights kept the acreage down. Without a dramatic weather change in the next couple of months, California will be experiencing its second straight year of mild wildfire season.

Smith River Complex
Nighttime on the Smith River Complex, inciweb photo by Adan Castillo Uribe.

Last year, fewer than 363,000 acres burned. This year’s largest fire, the Smith River Complex near the Oregon border, totaled 95,017 — under 100,000 acres. In 2020 approximately 4.3 million acres burned, and in 2021, 2.6 million acres. Climate scientists are confident that warming temperatures have increased the severity and length of fire seasons, but many hesitate to actually attribute California’s mild 2023 wildfire season to climate change. “I tend not to give much credence to the idea that single events and single summers or winters can be ascribed to climate change,” said Hugh Safford, chief scientist of Vibrant Planet and faculty at the UC Davis Department of Environmental Science and Policy.

“There’s no question that climate warming is having a major impact on expanding the fire season and increasing severity,” he said. “But California has the highest inter-annual variability and precipitation of any state in the United States. It is normal to go from a record wet year to a record — or nearly record — dry year, and that’s just the way it is.”

Mosquito Fire Sept. 2022According to the Daily MailPatrick T. Brown, a lecturer at Johns Hopkins University, says he deliberately omitted a key fact in a climate change piece recently published to ensure that editors would run it — the fact that 80 percent of wildfires are human-caused. Brown gave as an example a Nature paper he recently authored, “Climate warming increases extreme daily wildfire growth risk in California.” Brown said the paper focuses exclusively on how climate change has affected extreme wildfire behavior — but ignores other key factors.

He said academic journals now reject papers that don’t “support certain narratives” and said the media focus on climate change as the root cause of wildfires — including the recent devastating fires in Hawaii. Brown wrote in a piece for The Free Press that this distorts a great deal of climate science research.

But the climate models seen by Erwan Monier, associate professor of climate change impacts at UC Davis Department of Land, Air and Water Resources, make him predict that this upcoming year’s combination of a strong El Niño and warmer ocean temperatures could mean another wet year. “This is most likely the configuration that will control California’s climate this winter,” he said, “and will have implications for the next wildfire season. Because if we have another very wet winter, that means we’ll have even more moisture that could again lead to mild fires next year.”

Scientists predict global temperature increases from human-made greenhouse gases will continue. Severe weather damage will also increase and intensify.
What leading researchers in climate change effects (wildfire et al.) have found, though, lines up with what firefighters observe in the field:
      • We already see effects that scientists predicted, such as the loss of sea ice, melting glaciers and ice sheets, sea level rise, and more intense heat waves.
      • Scientists predict global temperature increases from human-made greenhouse gases will continue. Severe weather damage will also increase and intensify.

Global climate change is not a future problem. Changes to Earth’s climate, driven by increased human emissions of heat-trapping greenhouse gases, are already creating widespread effects on the environment: glaciers and ice sheets are shrinking, river and lake ice is breaking up earlier, plant and animal geographic ranges are shifting, and plants and trees are blooming sooner. Wildfires and fire seasons are just a piece of the many changes that are coming — changes that are here now.

California insurance rules change

California Insurance Commissioner Ricardo Lara said this week that insurance companies in the state will soon be allowed to factor in climate risks including wildfires in their insurance rates — if they increase their underwriting in at-risk areas to wean consumers off state-funded coverage.

Reuters reported that in the last year or two, seven of the state’s top 12 insurers have paused or restricted new business, including State Farm and Liberty Mutual, and the government’s Fair Access to Insurance Requirements (FAIR) Plan, intended as an insurer of last resort, has grown to a 3 percent share of California’s market.

Dixie Fire at Greenville, CA, 2021
Firefighters on the Dixie Fire at Greenville, CA, 2021. Jay Walter.

“We are at a major crossroads on insurance after multiple years of wildfires and storms intensified by the threat of climate change,” Lara said.

Unlike other states, according to an ABC News report, California does not allow insurance companies to consider current or future risks when setting the rate for an insurance policy. Companies can consider only what’s happened on a property in the past to set the price.

And insurers say that restriction makes it difficult to accurately price the risk.

On Thursday, Lara said California will write new rules to let insurers look to the future when setting their rates. “Modernizing our insurance market is not going to be easy or happen overnight,” he said. “We are in really unchartered territory and we must make difficult choices when the world is changing rapidly.”

The rule change is not all good news — it could mean higher rates for homeowners who have already seen dramatic increases. Eight insurance companies in California have requested increases of at least 20 percent this year, according to the California Department of Insurance.

Harvey Rosenfield, the author of a 1988 ballot proposition that regulates insurance rates, said Lara’s announcement “will dramatically increase homeowner and renter insurance bills by hundreds or even thousands of dollars.”

El comisionado de Seguros de California, Ricardo Lara, dijo esta semana que a las compañías de seguros del estado pronto se les permitirá tener en cuenta los riesgos climáticos, incluidos los incendios forestales, en sus tarifas de seguro, si aumentan su suscripción en áreas de riesgo para que los consumidores dejen de recibir cobertura financiada por el estado.

Reuters informó que en el último año o dos, siete de las 12 principales aseguradoras del estado han detenido o restringido nuevos negocios, incluyendo State Farm y Liberty Mutual, y el Plan de Acceso Justo a los Requisitos de Seguro (FAIR, por sus siglas en inglés) del gobierno, pensado como una aseguradora del último año. resort, ha crecido hasta alcanzar una cuota del 3 por ciento del mercado de California.

California’s becoming uninsurable

Several major insurance companies have stopped accepting California homeowners for new policies because of growing wildfire risks. As the number of fires in the state increases and other factors escalate, insurance companies worry about the risk — and the expense.

In 2022 there were over 5,000 wildfires, according to Cal Fire, that burned about 118,000 acres. Already this year 4,337 fires have burned over 114,560 acres.

Residents in high-risk fire areas or hurricane regions need homeowners’ insurance — and lenders require it. No insurance, no home loan. More people are moving into the interface, costing insurance companies too much to repair and replace houses while battling inflation, said Janet Ruiz with the Insurance Information Institute. Two insurance giants withdrew from California’s home insurance marketplace, explaining that increasing wildfire risk and soaring construction costs have resulted in their decisions to stop writing new policies in the state. State Farm announced last week it would stop accepting applications for all business and personal lines of property and casualty insurance, according to the Associated Press. The company cited inflation, a challenging reinsurance market, and rapidly growing catastrophe exposure.

“We take seriously our responsibility to manage risk,” State Farm said. “It’s necessary to take these actions now to improve the company’s financial strength.”

Unlike heavyweights State Farm and Allstate, which declined to sign new homeowners in the state, AmGUARD and Falls Lake will also drop their existing policyholders.

Allstate, another insurance powerhouse, announced in November it would pause new policies for homeowners, condos and commercial properties in California to protect current customers.

Homeowners may have to turn to the California FAIR Plan, which provides basic fire coverage, if they aren’t able to find an insurer that will cover fire expenses. The high-risk pool known as the FAIR Plan is not a government entity or a state program. Taxpayers do not fund the FAIR Plan — it’s supported by all carriers licensed to do business in California, which spreads the risk among all the insurance carriers. Because the FAIR Plan is a high-risk policy, people should expect to pay more than they would for a standard homeowner policy.

The San Francisco Standard reported last week that two more companies quietly left the California market, further narrowing options for those trying to insure their home or purchase one with a mortgage.

AmGUARD Insurance — a subsidiary of Berkshire Hathaway GUARD Insurance Companies — will withdraw its homeowners and personal umbrella programs, and Falls Lake Insurance will also end its homeowners program. Both companies made the announcements July 21 in little-noticed filings submitted to the state regulator. AmGUARD and Falls Lake are the latest insurers to end or limit their business in the state during the past year.

Unlike heavyweights State Farm and Allstate, which declined to sign new homeowners in the state, AmGUARD and Falls Lake will also drop their existing policyholders. Safeco plans to drop 950 policies in October in San Francisco and the East Bay.

An SFGATE report noted that State Farm held the most policies in the California property market in 2021, and the company experienced about a 60 percent loss that year.