Wildfire with firefighter in the foreground

California’s fire insurance crisis could leave homeowners stranded

As Californians assess the damage from the state's latest devastating wildfires, the financial fallout is revealing cracks in the insurance system, leaving many wondering who will foot the bill.

Umair Irfan reports for Vox.


In short:

  • The 2025 Los Angeles wildfires killed 29 people, destroyed 16,000 structures and could cost up to $275 billion, making them the costliest natural disaster in U.S. history.
  • Private insurers are leaving California due to rising risks and state regulations limiting rate increases, forcing many homeowners onto the state's last-resort FAIR Plan, which is struggling to stay solvent.
  • As insurance costs rise, uninsured residents face severe financial strain, and low-income communities may never recover, reshaping the region's demographics.

Key quote:

“Right now, the state of California will not allow insurers to put the expense of the reinsurance into their rates. So that’s an inhibitor for insurers to buy reinsurance and increases the likelihood that an insurer could go bankrupt or insolvent.”

— Tom Larsen, catastrophe risk team lead at CoreLogic

Why this matters:

Wildfires are becoming more destructive, but California’s insurance system is ill-equipped to handle the rising costs. As private insurers pull out, more homeowners rely on an underfunded state-run plan, increasing financial risks for everyone. Without reform, more people may lose access to insurance, leaving them vulnerable to future disasters.

Related:

Multiple Houston-area oil and gas facilities that have violated pollution laws are seeking permit renewals

Multiple Houston-area oil and gas facilities that have violated pollution laws are seeking permit renewals

One facility has emitted cancer-causing chemicals into waterways at levels up to 520% higher than legal limits.

HOUSTON — Multiple Houston-area oil and gas facilities that have previously violated the pollution limits in their permits have recently applied for new federal operating permits or renewals.

These facilities include the Chevron Pasadena Refining facility, the LyondellBasell Houston refinery, and the Chevron Phillips Chemical Sweeny Complex in Brazoria County, all of which are seeking renewed Title V permits.

Keep reading...Show less
silhouette of wind turbines during sunset.

17 states sue Trump administration over blocked wind energy development

Seventeen Democratic-led states and Washington, D.C., are suing the Trump administration for halting wind energy projects on public lands and waters, citing harm to energy diversification efforts.

Rachel Frazin reports for The Hill.

Keep reading...Show less
Industrial buildings and smokestacks on the coast with mountains and sunset in the background.

EPA plans to dismantle key offices overseeing climate and air pollution regulation

The U.S. Environmental Protection Agency will dissolve two main offices responsible for regulating greenhouse gas emissions and air pollution, signaling a broad retreat from federal climate oversight.

Jean Chemnick reports for E&E News.

Keep reading...Show less
The dome of the U.S. senate building.

House Republicans push sweeping fossil fuel expansion in budget bill

Lawmakers are preparing to fast-track legislation that would expand mining and fossil fuel leasing while rolling back environmental reviews and clean energy incentives.

Garrett Downs reports for E&E News.

Keep reading...Show less
A graphic image of a brain with arms and legs walking out of a city pulling a suitcase.

Europe steps up funding to attract U.S. scientists facing cuts under Trump

As the Trump administration reduces research funding and tightens restrictions on universities, European leaders are offering financial incentives to lure American scientists.

Catherine Porter and Roger Cohen report for The New York Times.

Keep reading...Show less
white university building near trees with fall foliage during daytime.

Scientists worldwide pledge to support U.S. colleagues facing political attacks on climate research

More than 18,000 researchers gathered in Austria to discuss climate science and vow solidarity amid increasing political pressure and funding cuts in the U.S.

Bob Berwyn reports for Inside Climate News.

Keep reading...Show less
Australian suburban houses with solar panels on roofs

Analysis: Australia’s voters give Labor a mandate to speed up the renewable energy transition

Australia’s landslide election result signals public support for faster renewable energy growth and leaves the Labor government poised to make bigger climate policy moves.

Adam Morton writes for The Guardian.

Keep reading...Show less
From our Newsroom
Regulators are underestimating health impacts from air pollution: Study

Regulators are underestimating health impacts from air pollution: Study

"The reality is, we are not exposed to one chemical at a time.”

Pennsylvania governor Josh Shapiro speaks with the state flag and American flag behind him.

Two years into his term, has Gov. Shapiro kept his promises to regulate Pennsylvania’s fracking industry?

A new report assesses the administration’s progress and makes new recommendations

silhouette of people holding hands by a lake at sunset

An open letter from EPA staff to the American public

“We cannot stand by and allow this to happen. We need to hold this administration accountable.”

wildfire retardants being sprayed by plane

New evidence links heavy metal pollution with wildfire retardants

“The chemical black box” that blankets wildfire-impacted areas is increasingly under scrutiny.

People  sitting in an outdoors table working on a big sign.

Op-ed: Why funding for the environmental justice movement must be anti-racist

We must prioritize minority-serving institutions, BIPOC-led organizations and researchers to lead environmental justice efforts.

Stay informed: sign up for The Daily Climate newsletter
Top news on climate impacts, solutions, politics, drivers. Delivered to your inbox week days.