A recent San Francisco Chronicle report highlights a troubling trend: over 806,600 homeowners in California, roughly 10.5%, are significantly underinsured, particularly following catastrophic wildfires in Pacific Palisades and Altadena. Counties like Lake, Kings, and Humboldt exhibit even higher uninsured rates. Mercury Insurance’s Kelly Butler stresses the importance of annual policy reviews to align coverage with rising rebuilding costs and wildfire risks. As these threats intensify, more homeowners are opting for reduced coverage or letting policies lapse, resulting in a 300% surge in the California FAIR Plan since 2018. Proposition 103 complicates insurance rate adjustments, leaving many vulnerable in wildfire-prone areas.
