Special Episode: California Insurance Crisis – The Los Angeles Fires

CAPITOL WEEKLY PODCAST: This Special Episode of the Capitol Weekly Podcast was recorded live at the California Insurance Crisis, which was held in Sacramento on Wednesday, May 14, 2025

This is Panel 2: The Los Angeles Fires, featuring Sonoma County Supervisor James Gore; Steve Hawks, Insurance Institute for Business & Home Safety; Kelsey Szamet, Eaton Fire Survivors Network; Nancy Wallace, UC Berkeley

Moderated by journalist Dan Morain

This transcript has been edited for clarity.

DAN MORAIN: I’m certainly no expert on fires or wildfires, though I’ve covered them, but this panel is amazing for several reasons, but one is that they’ve all experienced fire in a very real way.

So the first speaker, County Supervisor [James Gore] – you can read their bios in the [program] -experienced the Tubbs Fire. You [Kelsey Szamet] experienced the Altadena Fire, and you’re still displaced. You [Nancy Wallace] were part of the Oakland Fire exodus, right… diaspora. And you [Steve Hawks] worked for Cal Fire. So we have a group who really understands this, and also from an academic and political side.

“The only thing that really pisses me off in this world is strongly held, lightly informed opinions” – James Gore

So I wanted to start with you, supervisor. We’re fortunate that that he is the president of the National Association of Counties, which is like CSAC only for counties and specifically is engaged in dealing with FEMA and, and how proposed cuts to that can affect recovery. So here we are a couple of months after this horrible fire. I read today at the LA County website that there have been eight permits approved so far. Eight permits. So, tell me, James, what what’s in store for Los Angeles as we watch it rebuild?

JAMES GORE: If you’ve been to any county, any one county, you’ve only been to one county. If you’ve been to one disaster, you’ve seen one disaster. And at the same time, the threads of the resonance of lessons learned or lost, and changing circumstances and yet pass forward are there is alignment. And so you can forecast.

I appreciate the opportunity to be here with the other panelists and for this forum. I oftentimes tell people that after ten years in office at the county and the president of the California Counties, now the president of the National Counties, the only thing that really pisses me off in this world is strongly held, lightly informed opinions. Strongly held, lightly informed opinions.

“Everybody thinks that because there’s firefighters that we can fight these kinds of wind fires. That would be the equivalent of having a hurricane fighter or a tornado fighter” – James Gore

And I want to thank you for diving deep here. Because there’s a there’s an absolute insatiable need to find villains and attack everybody. And if you’re really talking, what you saw recently with Amy Bach and United Policy Holders, with Rex Frazier with PIF and others, I mean, we have worked for a decade. We have had nine presidentially declared disasters in Sonoma County in the last ten years and then some. And so the Tubbs Fire in my district… you know, 5000 homes burned down creating block captain networks, PG&E settlements, FEMA reimbursements, public assistance, individual assistance, fly outs to figure out community development, block grants, disaster response recovery plans…. Da da da da. Right?

So I really appreciate to give a, you know, a macro perspective on some of these things and as deep as you want to go. But I’ll just say that the first thing is, is, is that there’s after this kind of an event, this kind of a catastrophic event, these wind driven events, these true disasters, not fires. I mean, just let’s remember, these are windstorms. And I think that’s a problem, because everybody thinks that because there’s firefighters that we can fight these kinds of wind fires. That would be the equivalent of having a hurricane fighter or a tornado fighter.

We don’t have those, because when it changes from a event, a natural, a natural event to a catastrophic event, it’s very different. Rex was mentioning in the Kincade Fire, we had modeling. We had other things. It’s a tale of two fires. We were able to evacuate 40% of our population. 40% of our population. Which created another disaster…but by doing that we lost hundreds as opposed to thousands, in 2019, after what we learned in 2017.

So just really specific to kind of the point you brought up, there are individuals who are fire survivors who really rush to get their permit. And I say that, I say “rush” because they are driven. Anybody who loses, what I’ve learned, with the family members who have lost homes with us being evacuated, but God bless my not losing my home, evacuated multiple times… is that everybody processes the seven stages of grief differently. This is what survivors have taught me. This is not just my observation.

California Insurance Crisis, Panel 2: The Los Angeles Fires. Journalist Dan Morain, Kelsey Szamet, Eaton Fire Survivors Network.
Photo by Ellie Appleby, Capitol Weekly.

And that some people find everybody finds something different to pivot and to anchor onto. So for some individuals, it’s I want to get my permit as quickly as possible. For others, it’s I’m going to spend hundreds of hours on learning insurance and becoming an expert on insurance. For others, it’s I’m going to really become the person who learns how to who get involved in a fire safe council so that my lessons are never … So everybody has a fire within themselves, pun intended, that gets driven.

So the early permits are really from those individuals who are going after it. After that, insurance starts to really take hold. The… some people start to settle early. Other people go into two plus years. They go into litigation, they work with United Policy Holders and others. They go through all kinds of different processes, but they have to really know what’s going on before they start to commit further funds. So you have this balloon of permits that come in.

When those come in, you have to be ready to process them, not as normal work. So what we did in Sonoma County is we created an outsourced permit resilience center. That was so… like, for instance, you and I said, there’s 10 million people in LA County, right? ,So 9,950,000 of them are not directly impacted. So, you keep that into a permit area and then you create a streamlined approach where people can… you’re not holding them back with normal operating.

“The average home is 47 years old… The average roof is 47 years too. A 47 year old roof will not live through one of these fires” – Nancy Wallace

So that is really what’s happening. So you will see this go through the process. But there’s still lots out there, most of the lots. When I toured it with Supervisor Kathryn Barger and the Eaton Fire, you have the sign off on the lots so that people can actually kind of foresee what they’re doing. But a lot of people, they get permits, but then they don’t want to build because they don’t want to live in a construction zone at the same time. I mean, think about that guy who was the first permit, and he was moved back into his home in Coffey Park before the one year mark of the fires hit, maybe even ten months. And then he moved back there and all. He was in a wasteland.

DM: So tell me, supervisor, what does it look like today for those of us who haven’t been out to Coffey Park?

JG: Well, I think firstly, if you look at Coffey Park, Coffey Park also was at a time, and Rex Frazier also talked about 2017, and then 2018 was when the Butte Fire hit right after us… You go back to Coffey Park and it’s hard to see that there was a fire there.

It’s much more eclectic than it ever was because everybody became a home builder. You know, these aren’t tract houses anymore, so they’re very different. And the other thing that you’ll see is, is that, like, as my cousin, who I’m very close to, who was a big leader in the Coffey Strong movement, is, is that there’s more heart in that area than there ever was before because they banded together and leaned on each other, which is beautiful.

But then also for the first time, he’s also saying, like when they hold community events, they finally don’t talk about the fire, which is cool. I will just say that I told you, and I won’t… I’ll just take 10 seconds to say it…. the other side of Highway 101, my district that is not within Santa Rosa, but is in the unincorporated. That’s Larkfield-Wikiup. That’s really cool because we have we have built back better there.

There’s sewers where there wasn’t sewer. There’s parks where there weren’t parks. We have two parks that we put in. Sidewalks where there weren’t sidewalks, because this was an area that developers, by and large, with a laissez faire county 20, 30, 40, 50 years ago, just kind of speckled development without a plan. And that’s been fun to do.

DM: All right. Well, very, very interesting. So, Nancy, professor, you lived through the Oakland Hills Fire. You evacuated. I am interested to know how long it took you to sort of gain equilibrium again. But then I’ve got a three part question. What’s the average age of a home in California? What would a conservative estimate be to mitigate for fire? And how would your average homeowner, your basic homeowner. How would I, is basically what I want to know, pay for that?

NANCY WALLACE: So those are hard questions and I will attempt to answer them. In terms of the 1991 fire and sort of where people choose to spend their time after the fires. My experience was very similar to what you’re talking about in Sonoma. In Oakland the effort was to solve problems. Like, what do we do to solve problems, so this does not happen again? And people became very creative. And my comments today are going to be along those lines, maybe broader …of how do we actually not have these devastating fires?

And in my fire, a battalion chief was literally killed ahead of my husband and I, we were in our car and these hurricane of fire when the utility pole came down on top of him. And then getting out of my fire, there was a police officer, [John William] Grubensky, who… you see the best and worst because you’re driving through a hurricane of fire in a mountain road that’s only a car and a half width because of how things were planted before the fire. And people do silly things, stupid things, or are very careful. And what he tried to do was to calm people down.

And unfortunately, people hit trees. People came off the roads. People were hysterical. And he tried to keep calm, but he too, unfortunately died. I mean, people die in these fires trying to save us. And I think the message here is that we need to take this seriously and be creative to solve problems. So I moved close out of the fire, and the first thing that we did, given what I saw in the Oakland Hills, I did not grow up in California, so I was not used to seeing houses burned to the ground… with people in them…

We organized 120 homes. We taxed ourselves to put in new water mains that actually had water pressure. This sounds very much like Pacific Palisades… We put in new water mains that were not totally invaded by trees, so that we could run the fire hoses and run the fire hydrants.

And the second thing we did is we undergrounded all the wooden telephone poles with the transformers that explode in these fires and come raining down on people’s heads and kill them. And we just paid off those bonds last month.

What was the price tag home by home in this area? It was less than $500 a year on our property tax. This is totally doable. And we now have policies in California under Mello-Roos that make this easier to do. And drive through your neighborhood….. so many of them are older neighborhoods.

“I think there are real solutions. We have a lot…. I mean, California has the advantage of a well-functioning Mello-Roos functionality and also a PACE market that actually works” – Nancy Wallace

Now answers to your questions. The average roof in California, the average home is 47 years old. I have these data. I run a research institute at Cal… and the average roof…. I also know when homes are remodeled. …The average roof is 47 years too. A 47 year old roof will not live through one of these fires.

So you we have a very old housing stock. I work primarily on the mortgage markets and bond markets, and those markets, as to Rex’s points, are all about probabilities… that’s their actuarial models. And this home insurance is really for the bank. Most people have mortgages. More than 60% of homeowners in California have a mortgage, and PNC insurance is required.

And that’s another opportunity that I think we really could focus on, is that much of this is for the banks, and we need to incentivize the banks to think more creatively about helping…. The answer to your second question, which is how much does it cost to do the retrofitting that Rex laid out?

So five items… sounds easy a new roof, double pane glass, defensible space, cutting your tree limbs up to eight feet…. I don’t know how many of you have tried to cut down a tree in California recently… It could be $1,00 – $2,000 depending on the size of the tree. You add up these costs and there’s a minimum and a maximum to the current building code. We’re talking about something between $30-$70,000. Most people do not have that kind of liquid capital to invest to do mitigation, even though it is probably what is required to really solve this… Not have every house burns to the ground en masse. So 3000, 5000, 7000 houses at a time.

“That wildland fire, once it enters into the built environment, it is no longer a wildland fire, it is an urban fire burning urban fuels” – Steve Hawks

What we can do though, and what we’re working on now, we have a big initiative right now, is develop a second loan market to help people do mitigation. And it can be designed in two ways. A) get the banks to work with us. We are actually finding the banks are quite open to this because we use machine learning. We scale this market. It’s a huge market. When you talk about California, and 47 age bracket, average home. There’s a huge need for new roofs in California.  And the banks are in this business. They provide loans.

And the second we can use is to exploit Mello-Roos again, either at the communal level, because this is going to require subsidies largely for low to moderate income groups or, say, the tribes or other vulnerable communities. It will require subsidies. But to use property assessed clean energy loans to put this as part of the tax bill. The advantage of that structure is that you’re basically putting a loan on the House rather than on a person. And again, you can stretch the payments into a really long period. My fire was 1991. As I said, we paid that bond off last month. We can make a 30 year payback period. Very slow, very low installment payments.

So I think there are real solutions. We have a lot…. I mean, California has the advantage of a well-functioning Mello-Roos functionality and also a PACE market that actually works. So I think between the private sector to deal with this problem or to layer it into the property tax, and I know you’ve had problems with Fannie and Freddie.  They’re the banking sector, that’s who we have to convince that they’re going to be better off if they do this, so will the banks. We’re actually finding that the big California lenders are quite interested in this, and maybe they’ll do it on their own as well.

DM: They should be, because they have a huge stake in it. So Steven, you know, we think about fire as being as the parts of California that are most vulnerable are the exurbs, the urban rural interface. Tubbs was in the city. Altadena is a city. Pacific Palisades is a city. So talk about that from a you know, your background in Cal Fire. You’ve seen this firsthand.

STEVE HAWKS: Yeah. Thanks, Dan. And good morning, everybody. Thanks for having me here today. So we really think of this issue as a wildland fire problem with homes that are located in your traditional wildland areas. And the term was mentioned during the first panel, the Wildland Urban Interface. And that really just describes a geographic area. It does not describe how homes are vulnerable or ignite from a fire.

And really we look at three factors that lead to how intense a fire can become. And that’s: drought conditions when the fuels are very volatile and very receptive to a fire; that’s a strong, very strong wind component that is able to push the fire and outpace firefighting efforts; and then that fire burns into a built environment.

And once it burns into a built environment, there’s three additional factors that we really look at as to how easy it is for that fire to develop within the community and burn through the community, igniting these vulnerable homes. And that fire, that wildland fire, once it enters into the built environment, it is no longer a wildland fire, it is an urban fire burning urban fuels: homes, accessory structures, fences, cars. Anything that’s combustible and that can ignite, can ignite and help spread the fire through direct flame contact, radiant heat and ember exposure.

So those three factors that we look at are, structure density… so how closely spaced are structures to each other? And when one ignites, can it through direct flame contact and radiant heat ignite the next structure, particularly when those structures are downwind?

“It was a hurricane of fire, and the embers were uncontrollable” – Kelsey Szamet

And then the connectivity of fuels. So how can a fire burn from one house that ignited when maybe the spacing between houses is greater distance, get from that house to, like, a shed, to a fence, and then that fence connects directly to the side of the house, igniting the next structure in line. So the connectivity of fuels or the pathways that the fire can take to spread.

And then the last component is the building materials that the home is made out of. And when you have homes made of very vulnerable or combustible materials, then they’re very easily ignited by these very high intensity fires. And so wildfire is also unlike the other perils where when it enters into the community and it ignites homes, it’s making the fire stronger. Unlike a hurricane, when a roof blows off of a home, it’s not making the hurricane stronger.

And also if I don’t do any mitigation action to my home, but my neighbor does do a lot of good things, in fact, maybe all the right things…. but we are closely spaced with each other… I can have my home ignite because I didn’t do anything, which then can in turn ignite my neighbor’s home and continue that process.

“I spent a long time on the phone with a really well respected public adjuster last week, and he said, ‘I’ve been working fires for 20 years, and I’ve never thought about lead. Never.'” – Kelsey Szamet

So when we have homes ignite, they are contributing to the spread of the fire within the community. Likewise, when a home does not ignite, it can act as somewhat of a barrier to help protect homes that are downwind from it, from the spread of the fire in that area.

DM: Well, I’m sure you’re a good neighbor, and I’m sure you will make sure that that Nancy’s home doesn’t burn. So, Kelsey you’re an attorney. You were displaced by the Altadena Fire. Tell me what you know from from the homeowner, from the victim’s standpoint in Altadena… What’s going on? What’s going. Do you see any kind of an end in sight?

KELSEY SZAMET: No I don’t.

So my name is Kelsey Szamet. Thank you for having me. I am born and raised in Altadena. My parents bought that home in 1980, and I moved in with my two young daughters and my husband in 2018. We knew that we lived in a moderate risk area, because we are in the foothills. And there was a fire in 1993… I remember my father with a garden hose helping neighbors fight, but it was not coupled with 80 mile an hour winds. And that’s what we dealt with that night. And it was exactly that. It was a hurricane of fire, and the embers were uncontrollable.

California Insurance Crisis, Panel 2: The Los Angeles Fires. Steve Hawks, Insurance Institute for Business & Home Safety, Sonoma County Supervisor James Gore.
Photo by Ellie Appleby, Capitol Weekly.

Did I ever in a million years, as a sophisticated consumer and lawyer, think my house was at risk. Never. I thought maybe homes a little bit further north, you know, needed to take some of these precautions with newer roofs, and be really careful about chaparral and foliage around their homes. And we all woke up the next day and the commercial corridor of Altadena had burned. Middle schools had burned. It was unimaginable. And I think, really, we’re all still in denial. The community is in total traumatic grief and PTSD. Actively still.

I, you know, my first response was to work. I just worked nonstop day in, day out. So I am a conflict litigator by trade, and I am going after Edison, and that’s what’s that’s part of my seven stages of grief.

But I think that the risks that we’re all talking about here, as someone from the community, we’re just not talking about these things or thinking about these things, or aware of these things at the level at which they really are present in our day to day.

And I think one of the struggles that many people are facing is why would I rebuild in a community that I don’t think will be insurable in the future? What will it look like? What will it cost? Can I afford a $10,000 a year premium? A $15,000 a year premium? A lot of folks feel like, no, I can’t.

And then the question is, do I even have the money to start the process? Why would I start the process now, not knowing if I have enough money to see me to the end of this journey? So the questions are real and palpable. I think we’re just still in it. Only a handful of permits have been issued in Altadena.

But I think one thing that’s really interesting, and I hope you’ll all consider as, as experts in this area, The smoke damage claims are really a new piece of this because Altadena and Pasadena abut this… this catastrophe. And I spent a long time on the phone with a really well respected public adjuster last week, and he said, “I’ve been working fires for 20 years, and I’ve never thought about lead. Never. I have never thought about toxic levels of lead in standing structures.”

“We collect all these data, satellite data, working with high level physicists at the labs, to project that onto this state. So that literally house by house we can model risk. This can be done” – Nancy Wallace

And so are we keeping pace with the environmental threats that are going to happen in these communities when these homes burn, that have electric vehicles parked out front? And Altadena was particularly bad because the housing stock is is older than the average, and so almost every home in Altadena had multiple layers of lead paint. And that all ignited, and then whirled around in the community. And so if you were lucky enough to have a standing structure like I am across the street is not standing, but my home is… I have eight and ten year old daughters that I am not moving back into a lead filled home. And State Farm does not view it the way that I view it. So these are what we’re dealing with day in and day out and people are just struggling.

DM: There is a defendant in Altadena, which is Edison, maybe others, I don’t know. Not the case in Pacific Palisades, though, right?

KS: It’s very interesting. I was talking about this on the flight up here with a seatmate, and not only is there no utility to go after for recovery in Palisades, as there is in Altadena, which I do think is giving people some sense of hope, though it’s going to be a long road to understand what that recovery is going to look like… financial recovery, and if it’s meaningful enough to rebuild. And you know this with PG&E really, really well, but in Palisades they have no utility to go after, and Palisades also is City of LA, whereas Altadena is the County of Los Angeles, which is going to be very dramatic in terms of what the rebuilding looks like in terms of permitting processes, timelines, all of those things.

So the folks in Palisades, unfortunately, because, you know, if you are underinsured and you need to try to make up a delta to rebuild, and there is no defendant to go after to help you do that, that’s going to be a really big challenge in that community.

DM: So this was all pretty predictable. Nancy. Nancy did a paper that showed that, well, the top 120 zip codes that are most vulnerable in California.. the top two were La Canada Flintridge and Santa Barbara…. But on down the list in the top 20 were Altadena and Pacific Palisades. So how did you know that? How were you able to show that?

NW: So again, it goes back to our universities. We’re in a university environment here. And what’s going on on the campuses and the kind of data we’re meticulously collecting.

Again, as I said, I work on the mortgage markets. We survived the 2008 crisis. How did we do that? We built risk models. So, I was part of the infrastructure that built the risk part of Dodd-Frank, the stress test. We built risk models so that we knew how the banks were risk managing. And that’s why when the repo markets failed in March of 2020, we didn’t have another 2008 – because we had models that anticipated what those risks would be.

So that was something that I found quite curious about the way insurance is regulated in the state of California. And because I’m used to banking regulation, there are some important similarities and some important differences. The use of models is everywhere in banking. I mean, that’s how we do risk. That’s why the US mortgage market is so strong. We sell our bonds internationally because they believe in our models, and not having models that are reliable, that are well vetted on both sides, both by the insurance companies and also the regulators, is quite startling. And that’s the situation in California.

And even though, as Rex said and Meredith discussed, elements of these models are used, there is no vetting process on the models and how the good they are. I was on a panel two weeks ago with people from Google. We’re developing these models we’re working with engineering schools. I work with physicists at the labs to develop these models, and we need all hands on deck developing these models because they are highly informative. We shouldn’t be afraid of these models. We should use them, and we should use them wisely to manage risk. And that’s where the university comes in.

The other thing we’re very focused on is the bond market, to the point where you have all this infrastructure burn, that’s all funded with bonds. UC systemwide… it came right up to the edge of UCLA. We were in a panic about shutting down a campus.

All of that risk needs to be anticipated so that we can protect against it in anticipation, not after the fact.

DM: Well, how did you know that La Canada would be number one?

NW: So because I measure things at a two kilometer… we have gridded out the state… we collect all these data, satellite data, working with high level physicists at the labs, to project that onto this state. So that literally house by house we can model risk. This can be done. It’s done in all kinds of other areas in the financial markets. And it can be done here.

“We are actively opposing the efforts on the executive orders to get out of the business of FEMA” – James Gore

And as Rex spoke about, the reinsurance markets have been doing this for a long time and we just need to up the game here. We have a lot of talent in this state, and we need all hands on deck and do this. So our models I first gave this paper at Stanford Engineering unfortunately the first week of December. And what we said is, “this is ripe for a devastating fire. Here are the areas that are most ripe for these fires.”

And the Google people are working on the same thing. But we need to convince the banks and the state Insurance Commissioner that these models are very, very useful not to punish people, but to help people manage risk. And it’s…. these are manageable phenomena. They’re scary, but they’re manageable and they’re priceable.

DM: So supervisor, we have a knuckleball coming at us in the form of claims that, you know, FEMA is just not going to come through, right? So from the National Association of Counties perspective, I mean, what are you doing about that? What could be done about that?

JG: So okay, let’s go into this a little bit. So the first thing is, is that let’s just realize that that if we’re really talking about insurance, we’re not just talking about homeowners insurance, we’re really talking about government subsidies. We’re talking about grants. We’re talking about FEMA programs divided into two areas, public assistance and individual assistance programs that last a certain amount of time. Whether or not the president and OMB allow a 95% fill back, and California Disaster Assistance Act covers a little portion of that, whether the state comes in and covers property tax losses in these areas. This is all about a system that has money attached to it that either empower or disempower communities to rebuild. Okay.

So the first thing is, is, is that let’s just realize that in effect, a lot of FEMA’s programs, they’re developed so that your community doesn’t buckle under a disaster. So, they refund on a public assistance side, they refund the local government for $30 or $50 million of unmet needs on technical assistance to help them on, like when they were responding to the disaster. So they don’t like, not be able to pave roads. There’s a lot of intention, good intention with these things insofar as they are all imperfect, overlapping and tripping up against each other.

So what is at risk right now with a FEMA pre-approval that is in place with the Biden administration for the coverage of public assistance, which includes taking out people’s foundations, clearing lots, all that stuff is in. But what you’re talking about is for something like this… is let me just put it in the sense of like Sonoma County, where we lost 5700 homes, 8000 structures. You know, you’re talking about above and beyond that amount.

Another for us, let’s say maybe that’s another $500 million on the table. And I could go through the math and that might be low and that might be high. But I’m just saying we recently got hazard mitigation grant HMVP program cut for 50 million. We recently got the BRIC program cut.

So what are we doing with National Counties? Well, I created a bipartisan task force that is seeded with people specifically who are in areas that can speak to people in Congress, not just Democrats, but Republicans, key Republicans, folks in Louisiana with Scalise and others. And we are actively opposing the efforts on the executive orders to get out of the business of FEMA.

“We don’t have a divine right to living in high risk areas and having cheap insurance” – James Gore

So that is what is at stake right now. So if if, if you look at the president’s executive orders that have come out on FEMA, it has a nice set of words that say ‘these should be the state and local responsibility.’ It is a cost shift and there is nobody else who will carry up that cost. So it is the federal government intending and intoning to get out of the disaster management game. And it is very dangerous. So we are actively politically identifying people in specific states, swing states, all these other things, to keep FEMA viable even as it needs to be reformed. Absolutely.

I was on the FEMA National Advisory Council. I was an appointee to it. I was on the Resilient America Roundtable with the National Academies of Science. We do all this work, all this modeling. But if you’re just if you’re choosing to get out of the game and not take modeling and not do science and not do all this other stuff, then you’re failing communities. So it’s a big deal. I mean, we have $70 million that has come off of the table that is identifiable, verifiable risk management grants for fires in Sonoma, and then also Napa, and then also Mendocino County. All of us lost $37 million BRIC grants that provide….

DM: What’s a BRIC grant?

JG: Building resilient infrastructure and communities. So what what FEMA does is they really come in and they parachute in. And the whole disaster industrial complex comes in. And you’ve got to find verifiable good people to work with, like United Policy Holders. You have to have conversations with PIF, with insurers, you need to create clarity.

But there’s a lot of people who come in who are also charlatans. They are predators are trying to buy up lots or trying to do all these other things. But by and large, after the event and the public assistance, FEMA throws a bunch of grant opportunities at impacted communities so that you don’t have another disaster. You don’t become a repeat community.

Then they also created a new program that we lobbied for that allows a pre-disaster program. So you’re supposed to be able to say, hey, let’s do $50 million into these areas and reduce risk. So those have been… we have received notices that those are not just frozen… they won’t write the checks. So even if we now have, with NACO and with others, we are challenging those in court. There’s the administration still saying, “I’m not going to write you a check. Wait four years.” So your program is dead. So those programs were set to fund our home hardening project. SOCO Adapts, $5,000 rebates for every single person connected to our PACE program. That would put the rest of it. If it’s 30,000 onto a lien.

We have spent hundreds of hours… full great partnership with the insurers to Rex out a table of all the insurers who said they would underwrite if we met mitigation standards, we were this close, but then also this catastrophe.

I want to say one other thing. This is that it’s really difficult on a granular level to say this, but you have to look at your constituents and say, me included, we don’t have a divine right to living in high risk areas and having cheap insurance.

Before 2017, I paid $2,000 for a premium. At this point, I still am blessed to have insurance and I pay $5 to $6000. My neighbors lost their insurance. They’re paying $15,000 for less coverage than I pay five for. I would rather pay five. This sucks because you have to say this is not about affordability. This is about availability. But I would way rather pay five and have a homeowner’s policy than pay $15,000 like my like my neighbors do, and have a hodgepodge of four policies that don’t cover what I have. That is what’s happening with this whole implementation of what’s going on.

DM: So I did want to ask the audience if….

JG: I don’t know if that’s helpful, FYI.

DM: Yeah. I mean, to me it sounds like a mess.

JG: We could go anywhere with this.

DM: But I wanted to see if anybody in the audience has a question.

AUDIENCE MEMBER: Thank you. I’m curious. Kelsey, really appreciate that you made the trip up, and we’ve been working with some of your other people in your network. There seems to be a bit of a push and pull going on with… you know, we we know it’s really important for people to rebuild resilient. But people feel like, well, I’m already underinsured. How do I pay for that? And then there’s a lot of pressure being put by some camps on the county to like, expedite permits. And you heard Supervisor Gore say, like, really don’t want people rushing in, making decisions. You want them to be thoughtful.

“The community thinks FEMA is going to be zero. Honestly, the community thinks FEMA is not coming through at all” – Kelsey Szamet

So what do you what do you see as coming out of this sort of this, this conflict between people who say, get out of the way so I can rebuild, versus like the the county saying, sorry, we have to have these building codes. We’re going to enforce them and that’s how it’s going to be.

KS: I think that we we kind of have to honor both voices, right there. We want to rebuild this community so that people have a healthy place to live. And we need the housing stock. Right? It’s a vulnerable area, but we are adjacent to LA. And all of these folks work in the greater Southern California market. So we can’t just say that’s a dangerous area. We’re not going to rebuild. We have to be able to rebuild there.

California Insurance Crisis, Panel 2: The Los Angeles Fires. Journalist Dan Morain, Kelsey Szamet, Eaton Fire Survivors Network, Nancy Wallace, UC Berkeley, Steve Hawks, Insurance Institute for Business & Home Safety, Sonoma County Supervisor James Gore.
Photo by Ellie Appleby, Capitol Weekly.

There are people that want to rebuild and get back in right away. There are many who are saying, I’m going to sit back, sit tight and wait. I’m going to wait two years. I’m going to wait three years. I’m going to see what the infrastructure reimagining looks like. Will we really be able to underground lines and make it safer? What will all of this look like?

But I think that the real problem right now is that there are so many in our community that had no insurance at all because it was multigenerational living situations and homes, so they weren’t required to have it. There are so many in our community that are dramatically underinsured, me included.

I’m a sophisticated consumer. My house actually went through a house fire in 2007. I went out and got as much possible coverage as I could. Was it affordable? Yes, it was relatively affordable. I maxed out. I’m 50% underinsured. Had I lost my house. And that is the story of Altadena. Everybody is underinsured.

And so how can we figure out how to be able to afford to do this? And the community thinks FEMA is going to be zero. Honestly, the community thinks FEMA is not coming through at all.

And so, you know, the other problem is getting our our claims paid timely. You know, it’s all over the place. The response from the insurers. Each company is handling it differently. Some of the responses, I think, are pretty seamless and fairly painless in a really tough time. And some it is a battle royale to get what you feel like you’re entitled to under the policy that you paid for a long time and in your need… in your time of need, the insurance company is not there for you.

DM: Do you have a view of that, Steven? What the question about the future and FEMA, you know, from a Cal Fire standpoint. I mean, could you have imagined that FEMA would not come through?

SH: Well, going back to my Cal Fire days, we were standing up a new program in partnership with Cal OEScalled the California Wildfire Mitigation Program. Part of that is leveraging FEMA Hazard Mitigation Grant program funds to make the California dollars go much further. And without those dollars, you know, the state’s going to have to look at other options of how they can fund this program into the future. Because we know that mitigation actions work. We know that the science is sound behind these actions. We’ve seen them in our post-fire analysis that when homeowners take these steps, that it dramatically increases the survivability. And hopefully that translates to the insurability side of their home from these high intensity fires.

DM: We have time for another question.

CAPITOL WEEKLY: If you have a question. Get my attention. I’ll come over right here.

AUDIENCE MEMBER: Never turn down a free microphone. I would I was going to address this to Kelsey, but since you got the previous question, I’ll address it to the whole panel. What can the state and specifically the state legislature, do to not just help the communities that have already been impacted, but to prevent future communities from falling victim to these types of fires?

DM: Well, so that’s a huge question. And it’s two questions. What do you what do you think, supervisor?

JG: Well, I think the reality of what the first thing is, is what’s happening with FEMA is, is that is is we have to open up and look at the California Disaster Assistance Act and just really have a fresh look at what it provides and what it doesn’t provide. Everything does… you know, every study shows that at least a dollar in mitigation is worth six plus dollars in impact later. The problem is, is that there’s not enough money to pay for mitigation. And yet at the same time, it has to happen.

So I think the CDAA, especially with the reimagining FEMA, that’s going to go on and seeing where that happens with this administration is going to be is going to be a big deal. So if I’m saying like a practical thing as opposed to an aspirational thing.

I think the other thing is, is that, as was said earlier, is we do sit at a time that even though we are having a conference about California’s Insurance Crisis, we do have your lunchtime speaker, Ricardo Lara, and the insurance industry and the others all agreeing, in essence, that the Sustainable Insurance Plan is going to stabilize things.

“Wind is absolutely the biggest driver of extreme wildfire events and structure loss. It’s the less than 1% of the fires that lead to over 95% of structure loss” – Steve Hawks

What’s going to happen in five years from now? How much increases are going to happen? We don’t know that, but we do know that catastrophic modeling, quicker review of other things is there. So, if there’s anybody who is involved, it’s about the speed of implementation, because that has always been the secondary issue behind the disconnect…. Like at this point we have political alignment on that Sustainable Insurance Plan. And now it’s about actually getting there because this was announced 18 months ago. Right? And we’re still…

So what do we need to do? Do we need to put another prop on the ballot to counteract Prop. 103? Is it going to be a bunch of money? Is there not blah blah blah. Those are two things that I would say are germane.

DM: Thank you. Sounds like maybe a tax coming. Steven, did you have a….

SH: Yeah. Just one added point. There is not for the legislature to create additional programs. We already have. I mentioned previously the California Wildfire Mitigation Program that looks to retrofit homes and create defensible space around these vulnerable homes. And, so fund those programs that we already have. We don’t need to create additional layers of government, additional programs, and then fund those.

We were receiving a lot of funding through Prop. 4, the climate bond to for defensible space work and home hardening work. But more is going to be needed.

DM: Go ahead.

JG: The greatest, the greatest increase in risk happens because of avoidance of risk. The fact that there is so much liability with doing mitigation work, and we all do know and I I’m a fan of great plaintiff lawyers and other cases… but we have to acknowledge that it is hard to do good work because we make it so “perfect.”

The vegetation management plans, the vegetation… the VMT programs, the having to go and do a community wide EIR on every vegetation… you know, once again, let’s realize that we you know, we don’t even have ,what do they call them, like ‘good citizen’ laws, where, like, if you go and save somebody from driving into a flood, you can be litigated based off of that.

California Insurance Crisis, Panel 2: The Los Angeles Fires. Steve Hawks, Insurance Institute for Business & Home Safety.
Photo by Ellie Appleby, Capitol Weekly.

So I’m just saying that this is more of a practicality… is that if you’re doing prescribed burning and you need to have like for instance, we started to do a bunch, we have a good fire alliance. We’re doing prescribed burning with landowners all over the place. But for us to train people and for them to get the permits, first of all, to do it, is a huge is a huge lift.

Secondly, we don’t want to go and do a big one without having cover. So we so Cal Fire and our battalion chiefs come out and at first they kind of just help out to make sure, hey, if this prescribed fire pops a little bit, you know, we’re the professionals, you’re the landowner, we’re going to get your back.

That stopped because of legal liability within the Cal Fire system. And then we had to lobby. And now it’s loosening… so we have a way better partnership with Cal Fire and our locals on doing that. But that’s I just think everybody needs to realize, like you said, not a new program, is that we have things so tight for you to take action. And there’s so much liability for you to, to reduce risk that we don’t reduce risk.

DM: Okay. Well, so so we’ve run out of time. Kelsey, Nancy,  Steven, so we know we have run out of time…

CAPITOL WEEKLY: Actually, no, we have another ten minutes.

DM: Oh, fabulous. Fabulous.

TIM FOSTER: And I do have a question. Actually…. So I do have a question. This is really, I think, for Steve. I know IBHS does a lot of studies about mitigation of risk. And as has been mentioned multiple times today, these really are wind events as much or more than they are fire events. And I’m wondering if there’s anything you can talk about that may be important going forward as far as mitigating the wind component of these fires and, and what people may be able to do that maybe wasn’t something that was on the table, or that people were paying that much attention to, because this hasn’t been such an issue in the past.

SH: Yeah. Wind is absolutely the biggest driver of extreme wildfire events and structure loss. It’s the less than 1% of the fires that lead to over 95% of structure loss that we experience. So it comes down to that systems-based approach. I think it was mentioned earlier that you can’t just do 1 or 2 things and then expect that your home is…. you’ve driven down the risk enough that it will withstand these extreme events that are wind driven. You have to do it all. Making the home itself more resilient through the use of better materials, as well as reducing the exposure of combustible items that surround the house that could ignite and then in turn, ignite the house. So it’s that systems based approach.

DM: So, so, Nancy, in your paper you write about wind.

NW: Wind is huge. Wind is huge. And so they’re kind of two classes of model. One has to do what’s called the fluid dynamics of how it how what he’s speaking about is how these wind events turn into hurricanes. And a lot of that has to do with topography and obviously things like vegetation. But California has a unique topography. And so the Diablo Winds an d the Santa Ana winds are very, very different in their inherent behaviors and how they interact with the topography. And that’s how we can forecast this.

“The ignition events are usually stupid things that people do. In the case of the Oakland Hills Fire, it was a hibachi in the grass to cook lunch” – Nancy Wallace

We can forecast the wind, but that’s a much bigger problem. And that has to do with max temperature. And that’s all coming from the Nevada basin. But in the last two years, just in the last two years, there’s been a 0.3°C increase in max temperature each year. And right now science doesn’t know why.

I mean, it could be that we’re just we’re not radiating. We’re not… we don’t have a part of it may be that the pollution in China has reduced. And so we’re not reflecting solar energy back into space to the degree we used to. But it also may be, just have been El Nino. We had a very strong El Nino, which is a global situation. And that’s a big problem for insurance because we handle insurance with diversification. And this is now affecting the the planet at large.

But for us it really is all about the Nevada basin and max temperature and the interaction between that and topographies, including Pacific Palisades and Malibu and La Canada and frankly, the Oakland Hills, of just how the hills are shaped and how it enables these wind tunnels from the Nevada basin. And they’re very hard to predict.

DM: Did you have something on that James?

JG: Well, I just I just love… I mean, it’s crazy when somebody can tell you what you see, like the blowtorch coming through the mountains. And then all of a sudden, you know, I mean, everyone talks about these city fires, but really, they start. It’s like a fire you set in your in your house. I’m not talking…. I’m talking about in your fireplace. You’re like, you start with paper and a match. Then you put kindling. And so as it was as these fires in our area, as they’re coming through the hills and then the wind is just throwing these, these ember storms miles ahead.

NW: And up.

JG: And up.  And then there and then these tornadoes are flipping like, you go through these places and you’re like, why is there a garage door 30ft up in a tree? Right? The funnels. And then you realize, like when you talk like, I’ve been out in these events with fire captains and others, and the only thing they can do when those kind of events are, is evacuate everybody and do life. Once they get life safety, then they can do structure protection.

If they go up to somebody’s structure…. Like, I know many people who are pissed because they tell me I was there, “I was defending, they drove up and they could have helped me save my house, but they turned around.” If you talk to the firefighters when they show up, they’re like, “he didn’t do the work. I showed up at his house. He thought I could save his house. His house is gone, right? It’s on fire like I can’t, you know, I need to go defend.” It’s a risk based analysis.

So much…. I mean, it’s just like, as you say though, is that the Nevada like… we had the Tubbs fire in our hazard mitigation plan. We had that fire in 1964. It was called the Hanley Fire. It just went…. instead of it taking us three days to go from Napa to the core of Santa Rosa it took us six hours, because of the wind. Right?

NW: And same with the Oakland Hills fire. It had burned those same streets three times since 1960.

DM: How much time did you have? How much warning did you have?

NW: We had zero warning because we were up high. There were there was no evidence of fire whatsoever. There were no professionals there whatsoever. There had been a fire the day before. All of these are created by humans. I mean, the ignition events are usually stupid things that people do. In the case of the Oakland Hills Fire, it was a hibachi in the grass to cook lunch. I mean, ridiculous.

“Most people can’t envision themselves as being in that scenario. That’s somebody else’s problem. That happens over there” – Steve Hawks

But that there were a lot of Monterey Pines up there, and they dropped their needles when they’re stressed. And so it buried the fire. And then you get the wind event and it reignited all of that. So there was no advance warning whatsoever. I mean, people were fleeing because they didn’t know. They literally opened the door of their house and they were on fire. That’s how fast this moves, especially up in the hills, which are basically urban areas. This isn’t a forest. This is right behind the university.

So I do think that we have we have work to do, but that’s why we have universities. And I think creatively, I know FEMA is a disaster, but we have a lot of talent in this state, and we have a big banking industry, and they care a lot about keeping dollar-based banking working. And we need to work together.

RICH EHISEN: I have a question over here.

DM: Go ahead.

RE: You all have talked a lot about, of course, the intersection of government and you know, some of you have very personal experience with fire. All of you have very personal experience. I’m just curious. You’ve noted multiple fires in your area. I think people are still, of course, recovering from what happened in LA. What about … what do you feel about the the mindset of the communities? Do you think people are actually finally starting to understand the level of risk that they face, regardless of where they live here in this state to events like this?

NW: So I teach MBAs, statistics, and no, they do not. I mean, they’re very hard to understand because they’re low. I mean, when you say, well, what’s the statistic? What’s the probability that this house burns? It’s like 0.0005 on a given day. It’s essentially zero. And yet, and people don’t understand that.

But we have to help them understand that some of the areas, unless they do active things that are being described here, then when these events happen, they are at very significant risk. And I think that is helping people understand what this all means, what their neighborhood looks like and what that means objectively if they are in a fire but they don’t. Statistics are complicated to teach, and they’re not well understood by most people.

DM: Well, math is hard. Steven.

SH: And most people can’t envision themselves as being in that scenario. That’s somebody else’s problem. That happens over there. That happens in the wildland urban interface out in the forest area. It’s never going to happen in my community. But it really just takes that one bad day where you get the alignment of drought conditions and a very strong wind like we had in LA when those fires started that pushes that ignition, that fire into the built environment. And really, again, it stops being that wildland fire and transitions to that urban conflagration.

DM: Supervisor.

JG: I am… one of the things that I am not famous but infamous for in my community is that an editorial that ran that said ‘Supervisor Gore should not speak down to his constituents,’ and no politician ever wants to see an editorial like that written about you.

What happened was, is we had a re review, maybe a year after doing, you know, thousands of hours of outreach and we had so many people come to Sonoma Ready Day, get their go bags. I mean, we were really like pumping it. But what it was is, is that I decided because I wanted ironically, I wanted to get into the paper and shock people, that I wasn’t going to say I was disappointed. I was going to say I’m pissed.

California Insurance Crisis, Panel 2: The Los Angeles Fires. Kelsey Szamet, Eaton Fire Survivors Network and Nancy Wallace, UC Berkeley.
Photo by Ellie Appleby, Capitol Weekly.

What I said was, I’m pissed that we just reviewed these vegetation management compliance checks, that we went out… and there was an abysmal rate of action on veg management voluntarily. So, you know, and that was at the time where, you know, these disaster folks oftentimes say, you know, that that old quote, ‘never waste a crisis,’ that’s used by every political party because it is the only time that you can really reform status quo. It’s called the availability heuristic.

It means you can only change things when it’s actively in your mind, and people move on so quickly. So it’s a pleasure. You have to mandate certain things, like right now, we’ve mandated that we do live alert and warning testing every year, multiple times. So that like people know that there is risk. People believe that the system will protect them and they right now believe that they have a divine right to cheap insurance in high risk areas. In general, these are huge generalizations, huge generalizations.

But let’s be real. That’s one of the reasons we’re at where we’re at. It’s like, I have to know that even if I do mitigation, that might not affect my insurance rate, but it’s the best chance that when I get evacuated, my house is still going to be there. Because we’ve all seen in the middle of fires, oftentimes it’s somebody left a board that is highly flammable, connected to a fence that just a spark went up and it burns that and you’re evacuated and it goes and it climbs over to your house just like ladder fuel. So thank you for the opportunity to be with all of you. You’re inspiring.

DM: All right. Well, so so now we’ve run to the end of our time. Kelsey. Nancy, Steven and and Jim. And maybe we’ll see Jim around Sacramento a little bit more in the future. Thank you all. I guess they’ll stick around if anybody has individual questions. Thanks so much.

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