SACRAMENTO, California \u2014 How bad is California\u2019s wildfire insurance crisis? So bad that the state can\u2019t get coverage for its own firehouses.<\/p>\n\n\n\n
The irony emerged at a state Senate budget subcommittee hearing Thursday in Sacramento, where Gov. Gavin Newsom\u2019s administration defended the California Department of Forestry and Fire Protection\u2019s request for $11 million to replace a kitchen at Ishi Conservation Camp<\/a>, which houses and trains inmate firefighters in the remote Sierra Nevada foothills of Tehama County.<\/p>\n\n\n\n Cal Fire usually pays for building maintenance with bonds based on<\/a> the value of its property, but it couldn\u2019t for the Ishi project because it couldn\u2019t insure the facility to underwriters\u2019 satisfaction, Finance Department analyst Victor Lopez told lawmakers.<\/p>\n\n\n\n \u201cThe insurance industry, they weren\u2019t interested in selling insurance policies in the region due to the perceived fire risk in the area,\u201d Lopez said. And the insurer of last resort, FAIR Plan, doesn\u2019t meet the bond underwriters\u2019 requirements, either, he added.<\/p>\n\n\n\n State senators from both parties were incredulous.<\/p>\n\n\n\n \u201cWe can\u2019t get fire insurance at a fire station that\u2019s going to be manned by firefighters,\u201d said state Sen. Brian Dahle, a Republican from Lassen County, in the northeast corner of the state. \u201cThat\u2019s where we are in California. That to me is crazy.\u201d<\/p>\n\n\n\n Add Cal Fire to the growing list of constituents putting pressure on lawmakers to do something to stop property insurers\u2019 exodus, which makes headlines<\/a> daily as companies announce policy non-renewals<\/a> or moratoriums on new coverage<\/a>.<\/p>\n\n\n\n California Insurance Commissioner Ricardo Lara agreed last year to let insurers raise rates and base them on future projections of fire damages, after lawmakers punted the decision<\/a> to his office. Lara has been duly handing out rate increases, but insurers are still leaving: In the past two months alone, American National announced it would leave the state<\/a> and State Farm said it would drop tens of thousands of homeowners.<\/p>\n\n\n\n State Sen. Josh Becker, a Democrat from Silicon Valley, highlighted his bill to require insurance companies to give property owners more credit for things like installing fire-resistant roofs and building fire breaks. (Insurance companies oppose it<\/a>, saying it could force them to take on too much risk.)<\/p>\n\n\n\n \u201cIt\u2019s ironic and highlights the problem we\u2019re trying to solve,\u201d he said about Cal Fire\u2019s insurance woes. \u201cWe\u2019re just trying to get recognition for the direct fire mitigation on the ground.\u201d<\/p>\n\n\n\n Ishi might be the tip of an iceberg.<\/p>\n\n\n\n Mike McGinness, Department of Finance\u2019s deputy director responsible for Cal Fire, said he only knew of one other Cal Fire facility that has had a similar problem so far. But the Department of General Services, which oversees all state facilities, has identified 16 projects statewide \u2014 11 of which are Cal Fire\u2019s \u2014 that may have trouble getting fire insurance, spokesperson Monica Hassan said in an email.<\/p>\n\n\n\n Cal Fire and the Department of Finance are now reviewing all the maintenance and upgrade projects seeking funds this year to figure out if others might struggle to get fire insurance, too, McGinness said.<\/p>\n\n\n\n \u201cTypically, this hasn\u2019t been an issue and so we have waited until closer to the point of selling the bonds,\u201d he said. \u201cBut given recent trends in the insurance industry, it\u2019s been important to start looking.\u201d<\/p>\n\n\n\n So far, lawmakers have defended Cal Fire\u2019s increasing drain on state coffers, even in a down budget year, as Newsom adds firefighters to cut back flammable vegetation and protect communities from increasingly intense wildfires.<\/p>\n\n\n\n But Cal Fire has a huge and growing maintenance backlog. The agency is currently working on 43 upgrade projects that cost an estimated $1.6 billion, said Michelle Valenzuela, Cal Fire\u2019s assistant deputy director of capital finance and sustainability. Eighty percent of Cal Fire\u2019s 635 facilities are older than their designed 50-year lifespan.<\/p>\n\n\n\n Helen Kerstein, principal fiscal and policy analyst with the Legislative Analyst\u2019s Office, recommended lawmakers consider whether all ten new projects Cal Fire asked to fund this year need to happen immediately, given the state\u2019s deficit could reach $73 billion or more<\/a>.<\/p>\n\n\n\n \u201cWhen taken together, these projects would add some significant pressure to the general fund,\u201d she said.<\/p>\n\n\n\n