Who's on the hook for California's uninsurable homes?

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 16 January 2025

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

The Southern California wildfires are devastating large swathes of Los Angeles, destroying homes and businesses and displacing thousands. In the state's strained insurance system, homeowners who can't get fire coverage from traditional insurers are left with just one option—the FAIR Plan.

Today on the show, we explain how the FAIR Plan works and the existential problems it now faces as the wildfires put new pressure on California's insurance market.

Related episodes:
When insurers can't get insurance

For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org.

Fact-checking by Sierra Juarez. Music by Drop Electric. Find us: TikTok, Instagram, Facebook, Newsletter.

Learn more about sponsor message choices: podcastchoices.com/adchoices

NPR Privacy Policy

Transcript

Click on a timestamp to play from that location

0:00.0	NPR.
0:02.0	This is the indicator from Planet Money. I'm Waylon Wong.
0:14.6	And I'm Adrian Ma. Kale Beck has lived in California for most of his life, and that's meant living with fire risk.
0:21.8	He says he's had to evacuate three times, although currently he lives on the central coast, which is far from the
0:26.8	wildfires devastating Los Angeles. He and his wife bought a fixer-upper near Monterey in 2020.
0:32.9	It's a very small street. It's one way in and one way out. And that's one of the scary things as far as fire goes.
0:38.9	But it's just like, you know, we have room for all of our animals. We have five dogs and a mini horse.
0:43.9	Wow, you have a mini horse?
0:46.1	Yeah. His name is Willow. And he's raised with dogs. So he pretty much just sleeps on the porch. So life is pretty grand for Willow the mini horse,
0:55.4	but Kale had a pretty big snag about a year after buying the house.
0:59.5	His home insurance company said it would no longer cover him for fires.
1:03.2	His insurer said one problem was too many overgrown shrubs and trees on the property.
1:08.0	So Kail got a woodchipper and cleared the land himself.
1:12.1	But then he says his whole zip code was deemed too risky. Kail couldn't get fire coverage from any insurance company.
1:18.1	You don't have fire insurance, your mortgage will drop you. So we had to get on a fair plan.
1:23.5	The fair plan. It's a fire insurance program in California that's known as an insurer of last resort.
1:29.2	With traditional insurance companies quitting the state, a growing number of homeowners are turning to the Fair Plan.
1:34.7	And that's putting a strain on an insurance system that was already under pressure before the L.A. wildfires.
1:41.3	Today on the show, we explain how the fair plan works, the role it plays in California's stressed
1:46.9	insurance system, and the existential problems it now faces.
1:55.5	This message comes from Wise, the app for doing things in other currencies.
2:00.3	Sending or spending money abroad, hidden fees may be taking a cut. With Wise, the app for doing things in other currencies. Sending or spending money abroad, hidden fees may be taking a cut.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from NPR, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of NPR and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.