Top West Region Insurance Journal Stories of 2024

Wildfires and their effect on the California’s homeowners insurance crisis dominated Insurance Journal’s West headlines this year.

Other popular stories included big lawsuits, and stories on fraudsters and bad actors being caught and punished.

Report: Experts Worry California’s Wildfire Season Could Get Worse

The state’s fires season started out by raising a few eyebrows.

One of the site’s most-read articles reported that several blazes had experts worrying early on in California’s wildfire season that things could get worse when the seasonal winds responsible for fanning some of the biggest fires arrive.

The fires in the season occurred without the aid of “the hot, dry air of the Santa Ana and Diablo winds” that blow from the desert, over the mountains to coast.

As it turns out, things kicked up a bit. Firefighters battled strong winds driving a fast-moving Southern California wildfire in November that forced the evacuations of thousands of people and destroyed 168 structures.

According to CalFire, as of mid-November, the state experienced 7,631 wildfires and 1.039 million acres burned. More than 2,000 structures were damaged or destroyed.

California Policyholders May Be On the Hook for Wildfire Losses

The fires and the insurance crisis garnered heavy readership, including a story that California homeowners could be required to pay a surcharge if the state’s insurer of last resort is unable to cover losses from a catastrophic wildfire.

The California Department of Insurance sent a bulletin to insurance companies outlining how the FAIR Plan, which provides coverage to homeowners who can’t find it elsewhere, can pass along costs incurred from “extreme loss scenarios” to consumers.

The state-created insurer is backed by all major companies licensed in California, including State Farm General Insurance Co. and Allstate Corp., which are responsible for paying claims if the plan runs out of funds.

Under new details of a plan first announced in July, insurance companies will be required to cover half the cost of losses of up to $2 billion in total claims — $1 billion for residential and $1 billion for commercial. But the other half can be recouped from consumers through a surcharge if the insurance commissioner gives approval.

The announcement comes as California grapples with a deepening home insurance crisis. Major insurers have been cutting back on coverage, citing growing wildfire risk and state-imposed limits on premium increases. For some, home insurance premiums have skyrocketed, while others haven’t been able to find coverage at all.

Survey Shows California’s Insurance Crisis Is Impacting Home Sales

To make matters worse, it appears the wildfires and insurance crisis are affecting property prices.

One article featured realtors in California who are reporting more difficulty selling homes because of the insurance crisis, according to a survey from the California Association of Realtors.

The group surveyed its members and found 13% reported a home sale falling out of escrow due to a buyer’s inability to find insurance, more than double the figure (6.9%) in last year’s survey.

Nearly one-third (31%) of agents surveyed said their most recent buyers had difficulty getting insurance when trying to purchase a home, nearly double 2023’s 16%.

And roughly one-in-five respondents said their clients ended up buying insurance from the FAIR Plan.

Nearly half (45%) of buyers told their agents insurance was too expensive, the survey shows.

Wildfire Risk Upends California’s Cannabis Heartland as Insurance Vanishes

The wildfire and insurance crisis even effected California’s cannabis industry, one of the nation’s oldest and largest cannabis markets.

With major insurers pulling back from California because of wildfire risk, pot farmers increasingly find themselves confronting the risk of catastrophe on their own

Legal marijuana cultivators are ineligible for the state-created FAIR plan, which provides coverage for customers who can’t find it elsewhere. An underwriting guideline prohibits any “‘illegal activity that increases risk to a property” that “presents an unacceptable hazard.” A spokesperson for the FAIR plan said insurers risk having no legal protection for violating federal law by covering properties involved in the marijuana business.

That’s left many small growers to contend with two risky options: forgo insurance or hide their business from the state-backed insurer. The latter carries substantial risk that could lead to a lawsuit or coverage loss. What’s emerging is a crisis for a multibillion-dollar industry that’s already struggling to stay afloat in the top pot-producing state.

More Extreme Heat Plus More People Equals Danger in These California Cities

The fires are being driven by numerous factors, including hotter weather.

Another well-read story covered a CalMatters analysis that shows that many California cities with the biggest recent population booms are the same places that will experience the most high heat days — a potentially deadly confluence. The combination of a growing population and rising extreme heat will put more people at risk of illnesses and pose a challenge for unprepared local officials.

As greenhouse gasses warm the planet, more people around the globe are experiencing intensifying heat waves and higher temperatures. An international panel of climate scientists recently reported that it is ” virtually certain ” that “there has been increases in the intensity and duration of heatwaves and in the number of heatwave days at the global scale.”

CalMatters identified the California communities most at risk — the top 1% of the state’s more than 8,000 census tracts that have grown by more than 500 people in recent years and are expected to experience the most intensifying heat under climate change projections.

The results: Lancaster and Palmdale in Los Angeles County; Apple Valley, Victorville and Hesperia in San Bernardino County; Lake Elsinore and Murrieta in Riverside County; and the Central Valley cities of Visalia, Fresno, Clovis and Tulare.

By 2050, neighborhoods in those 11 inland cities are expected to experience 25 or more high heat days every year, according to data from researchers at Scripps Institution of Oceanography, University of Colorado Boulder and UC Berkeley.

Man Banned From California’s Workers’ Comp System Charged for Billing Nearly $100M

Fraud and people getting caught are always popular on Insurance Journal, and they were among the most clicked upon articles again this year.

A man banned for life from the California workers’ compensation system after being twice convicted of fraud was charged with billing nearly $100 million as part of an extensive workers’ comp fraud scheme.

David Fish was charged along with a San Diego-based neurosurgeon and two other co-conspirators in connection with the scheme.

The charges follow a three-year investigation by the Orange County District Attorney’s Office into Fish, who is accused of continuing to control clinics and providers who would see patients, refer them to specific providers to receive illegal referral payments and then unlawfully bill workers’ comp insurers.

Fish, 55 of Laguna Niguel, Martin Brill, 78 of Los Angeles, and Robert Lee, 61 of Rancho Mirage, formed Southern California Injured Workers, a management company that offered medical management services.

California Vocational School Owner Charged With Fraud in Workers’ Comp Scheme

The owner of a Fresno, California-based for-profit vocational school was charged with engaging in fraudulent billing practices related to workers’ comp.

Paul Steve Ramirez, 59, was charged with 11 felony counts, including insurance fraud. The fraudulent insurance claims could reach up to $200,000.

Ramirez owns P. Steve Ramirez Vocational Training Centers, a private post-secondary institution and Supplemental Job Displacement Benefit training provider. SJDB vouchers provide up to $6,000 for retraining to injured workers with a permanent partial disability and are unable to return to work at their employer. He owns a second business that provides vocational counseling.

Authorities allege that Ramirez gained access to students at the counseling center and then self-referred them to his educational institution to maximize his billing. They found Ramirez fraudulently collected SJDB voucher funds for 37 students and billed insurers for services even though the students did not meet the minimum qualifications.

Jury Hands $5.2B Verdict Against Vegas Company in Bottled Water Liver Damage Suit

Lawsuits are also ever-popular articles on the state, and these articles this year proved popular again.

A jury in Nevada delivered a $5.2 billion award in the latest large-sum lawsuit against a former Las Vegas-based bottled water company that was found responsible for causing liver damage in customers before it was recalled from store shelves in 2021.

A 12-day trial ended with the verdict in the negligence and product liability case against AffinityLifestyles.com Inc. and its Real Water brand with the jury awarding $230 million in compensatory damages and $5 billion in punitive damages to Hunter Brown and several other plaintiffs.

Attorney Will Kemp, representing plaintiffs, told the Las Vegas Review-Journal he expects Real Water’s insurance company to fight paying damages because the company has filed for bankruptcy.

Affinitylifestyles.com was headed by Brent Jones, who served as a Republican Nevada state Assembly member from 2016 to 2018.

Critical Locked Gate Overlooked in Investigation of Maui Fire Evacuation

Several stories on the deadly blaze in Hawaii were among the site’s most read, including an article on the state attorney general’s report on the deadly 2023 Lahaina wildfire, which flagged various locked gates that blocked people trying to flee as flaws in Maui’s evacuation planning.

Yet a padlocked gate where the largest cluster of Lahaina wildfire fatalities occurred was not included in the analysis, which therefore did not seek to determine whether lives could have been saved if it had been opened either by emergency responders – or anyone with a key.

Some of the most harrowing 911 calls during the wildfire, which killed at least 102 people, came from callers trapped in vehicles near that gate on Kuhua and nearby streets, with no way to get out.

Locked gates impeded escape in several parts of Lahaina on the day of the fire. In Kelawea Mauka, a neighborhood just north of Kuhua Street, local residents worked with a Maui police officer to break down a locked Department of Water Supply gate and create their own path to safety via Lahaina Bypass.

Maui Fire Caused by Broken Power Lines, County and US Find

Another heavily read story was one covering the assertion by the Maui Fire Department that the fire was caused when Hawaiian Electric Industries Inc. re-energized broken utility lines that caused sparks to ignite unmaintained dry vegetation.

The blaze was a single fire that was thought to be extinguished by firefighters but rekindled later in the day from a piece of unidentified smoldering material located in a gully on the outskirts of Lahaina, the department’s chief said at a news conference Wednesday.

The county released the details of its official investigation into the cause the blaze, which resulted in an estimated $5.5 billion in economic damage and 102 deaths. The Maui Fire Department tapped the US Bureau of Alcohol, Tobacco, Firearms and Explosives to determine exactly how the blaze ignited and spread as part of its probe into the disaster.

Hawaiian Electric has said it wasn’t legally responsible for the destructive blaze. The utility acknowledged that its lines started a small fire on the day of the tragedy, but said firefighters reported putting out that conflagration. A second fire ignited in the afternoon and quickly spread into Lahaina, the utility said. Maui County and Hawaiian Electric had sued each other over responsibility for the damage.

Here’s a video discussing popular West articles, produced by Wells Media Group editors and our new-media team.