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Written by: Melanie Gall, Arizona State University

Published: 09 June 2023

 

When the nation’s No. 1 and No. 4 property and casualty insurance companies – State Farm and Allstate – confirmed that they would stop issuing new home insurance policies in California, it may have been a shock but shouldn’t have been a surprise. It’s a trend Florida and other hurricane- and flood-prone states know well.

Insurers have been retreating from high-risk, high-loss markets for years after catastrophic events. Hurricane Andrew’s unprecedented US$16 billion in insured losses across Florida in 1992 set off alarm bells. Multibillion-dollar disasters since then have left several insurers insolvent and pushed many others to reevaluate what they’re willing to insure.

I co-direct the Center for Emergency Management and Homeland Security at Arizona State University, where I study disaster losses and manage the Spatial Hazard Events and Losses database (SHELDUS). As losses from natural hazards steadily increase, research shows it’s not a question of if insurance will become unavailable or unaffordable in high-risk areas – it’s a question of when.

Reinsurers are worried

Insurance is a vehicle to transfer risk. When an individual buys an insurance policy, that person pays to transfer the risk of expensive repairs to the insurer if the home is damaged by a covered event, like a fire or thunderstorm. Most policyholders don’t experience major disasters, so insurance companies make money.

However, disasters are extremely costly when they do occur, so insurers also buy their own insurance, called reinsurance.

Reinsurance costs have been rising fast in response to expensive disasters around the world in recent years. Reinsurers’ risk-adjusted property-catastrophe prices rose 33% on average at their June 1, 2023, renewal, after a 25% rise in 2022, according to reinsurance broker Howden Tiger’s analysis.

If prices are too high and insurers can no longer transfer excessive risk to the reinsurance market, they are stuck “holding the risk” – meaning the cost of claims when disasters strike. A big enough disaster can put insurance companies out of business, or they can decide to leave the state, as seen in California, Louisiana and elsewhere.

Responsible insurers are not in the business of gambling, so they do what State Farm and Allstate did: They reevaluate their portfolios – the various lines of insurance they offer, such as auto, life, property insurance and health insurance – and their prices. Insurance is a highly data-driven business and uses some of the most sophisticated climate and risk modeling in the world to forecast future risks, including the likelihood a property will be damaged by wildfire or other natural hazards.

State Farm cited “catastrophe exposure” as a reason for ending new high-risk personal and commercial property and casualty policies in California. That refers to the likelihood that costly claims would exceed the risk State Farm was willing to accept.

Why drop only California?

So, why did State Farm and Allstate only stop new policies in California and not in other wildfire-prone states like Colorado or Arizona?

The answer can only be speculative since State Farm or Allstate don’t publicly disclose their exposure. That’s calculated based on how many personal and commercial property and casualty policies the company holds in the state, particularly in the wildland-urban interface where fire risk is higher, and at what value.

State Farm did cite California’s increasing wildfire risk and home construction prices, but there are other influences to consider.

One is state insurance regulations that can limit premium increases, prohibit policy cancellations and require certain levels of coverage. Insurer Chubb’s chief executive mentioned restrictions that left it unable to charge “an adequate price for the risk” as part of the reason for its 2022 decision to not renew policies for expensive homes in high-risk areas of California. California also has a unique “efficient proximate cause” rule that forces property insurers to also cover post-fire flooding, such as mudslides. Rainy winters like 2023’s often trigger destructive mudslides in wildfire burn areas.

What happens now?

When insurers pull out of a community, residents and companies without access to property and casualty insurance are left holding their own risk – and paying the price if a disaster strikes. From a societal and political perspective, that’s a problem.

Residents and businesses without insurance tend to recover more slowly. Uninsured residents often depend on donations, loans or federal individual assistance. The latter, however, is only available for catastrophic disasters and covers only immediate needs.

To fill the gap and provide access to insurance, states including California, Florida, Louisiana and Texas have created either private or public insurance options of last resort with generally very pricey premiums.

Residents covered by these options transfer their risk to the state, such as in Louisiana and Florida – meaning state taxpayers, who fund the state insurance programs, hold the risk directly or indirectly. In California, the privately insured FAIR Plan, in existence since 1968, wrote close to 270,000 policies in 2021, nearly double the number in 2018.

Similarly, anyone purchasing flood insurance through the National Flood Insurance Program since 1968 is transferring their risk to federal taxpayers. The NFIP currently insures almost $1.3 trillion in value across 5 million policies.

Politicians are not catastrophe risk experts, though, and do not make decisions based on data alone.

In the short term, I expect that insurance pools, as well as federal- and state-run insurers of last resort, will add more policies, and that state legislators will incentivize the return of insurers. But while the political willingness to support such a trend exists, the financial resources do not.

The National Flood Insurance Program has plenty of lessons to teach about the challenges of balancing exposure and keeping premiums affordable: It is more than $20 billion in debt. Texas has resorted to charging insurers operating in the state to help cover its program’s costs.

Fixing insurance starts with the property itself

Despite the risk of properties becoming uninsurable, communities today continue to permit development in floodplains, along coastlines and in the wildfire-prone wildland urban interface. Inadequate building codes allow developers to build homes that cannot withstand severe weather. These practices have placed millions of residents and the things they value in harm’s way.

As climate change continues to dial up the frequency and severity of natural hazards, there are some steps states and communities can take involving property to lower the risk:

• Make smarter land use choices and limit development in high-risk areas to avoid placing people and the things they value in harm’s way.

• Adopt more stringent building codes and safety standards at state and community levels.

• Price risk into home sales, either through an insurance contingency that allows the buyer to withdraw when they cannot secure insurance or lower assessed property values for real estate in high-risk areas, which can dissuade builders and buyers.

• Require comprehensive disclosures of all present and future risks along with historic claims associated with a property to educate potential buyers.

• Make risk information accessible and understandable. My research shows that most people have a hard time fully grasping how likely they are to be affected by a catastrophic event. They need better tools that communicate the information in a way that resonates with them.

• Help residents in high-risk areas relocate through buyouts and managed retreat that returns the land to nature or public uses such as parks.

Melanie Gall, Assistant Professor and Co-Director, Center for Emergency Management and Homeland Security, Watts College, Arizona State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Written by: LAKE COUNTY NEWS REPORTS

Published: 08 June 2023

LAKE COUNTY, Calif. — Over the course of the COVID-19 pandemic, the Lake County Library Literacy Program, supported in part by the California Library Literacy Services, has worked to rebuild the one-on-one tutoring program which aims to increase literacy in Lake County.

Adult learners in the program are paired with tutors to improve their reading, writing, and conversation skills at no cost and at their own pace.

This program is also available to adults who are learning English as a second language.

In addition to the adult program, a Family Literacy Program is available to families of adult learners with young children to promote literacy and lifelong learning for all ages.

In this program, children receive free books to build home libraries, and parents receive a monthly newsletter that includes reading recommendations, family activities, and more.

The latest development in the Family Literacy Program is a partnership with the Clear Lake State Park for the free monthly StoryWalk & Crafting Party, which takes place on the second Saturday of each month from 11 a.m. to 2 p.m.

This month’s Storywalk is scheduled for Saturday, June 10, from 11 a.m. to 2 p.m.

The Family Literacy Program will provide free books to families in attendance, and encourage adult learners in need to enroll in the Literacy Program.

This effort is also supported by the Lake County Literacy Coalition which supports the Library Literacy Program with fundraising and outreach, and select Board members will host the monthly StoryWalks.

Any and all Lake County residents are welcomed to attend the monthly Storywalks and are encouraged to bring family members of all ages and lunch for a picnic outside. Parking and day use fees are waived for Storywalk events.

The State Park is located at 5300 Soda Bay Road in Kelseyville.

Additionally, a new StoryTime in the Park event at Clear Lake State Park will take place on Wednesdays at 10:15 a.m. through the end of August.

Follow the Clear Lake State Park on Facebook @clearlakestateparkca and Instagram @clearlakestatepark, and the Lake County Literacy Coalition @LakeCountyLiteracyCoalition.

If you are interested in becoming a literacy tutor or know someone who could benefit from literacy services, please call 707-263-7633 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

To learn more about the Clear Lake State Park Interpretive Programs, visit https://www.parks.ca.gov/?page_id=473 or call 707-279-1936.

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Written by: LAKE COUNTY NEWS REPORTS

Published: 08 June 2023

A 25-year mystery has been solved and a family is finally getting closure thanks to a partnership between the Humboldt County Sheriff's Office, the California Department of Justice and Othram Inc.

The remains have been identified as belonging to Kerry Cummings, who was last in contact with her family in 1997.

In October of 1997, a duck hunter located a dismembered female torso in the Ryan Slough, just north of Eureka. The remains were recovered, however, attempts to identify the female victim were unsuccessful. In January of 1998, additional remains were located and recovered on Clam Beach.

On Nov. 3, 1998, Wayne Adam Ford arrived at the HCSO’s Main Station in possession of a female body part. He subsequently admitted to murdering several women throughout the North State, including the unidentified female. Investigators interviewed Ford numerous times, obtaining descriptive details of the female.

Ford’s encampment was searched as part of the investigation. Investigators located additional remains belonging to the female recovered from the Slough. Attempts to identify the female were made, but ultimately were unsuccessful.

In June of 2006, Ford was convicted of four counts of first-degree murder in a San Bernardino County court and was sentenced to death.

Through the years, HCSO investigators never gave up on attempting to identify Ford’s unknown female victim, routinely searching missing persons reports from all of the West Coast to obtain leads.

Using DNA, investigators were able to confirm that the remains located on Clam Beach were also that of the unknown female.

The DNA was entered into both the California Missing Persons DNA database and the National Unidentified Persons DNA index.

The DNA profile was routinely searched against profiles from both missing persons and other human remains in the Combined Index System. No profile matches were ever made.

HCSO Sheriff William Honsal created the Cold Case Unit in 2021, assigning two investigators to exclusively review HCSO’s unsolved cases for new leads. In December of 2022, the HCSO and the CA DOJ partnered with Othram Inc, a forensic genealogy lab, to determine if advanced forensic DNA testing could help establish the identity of the unknown female, or a close relative.

“During our review of cold cases, we identified multiple cases that could benefit from this DNA technology,” HCSO Cold Case Investigator Mike Fridley said. “Earlier this year we were able to identify another unknown person by using this technology. We were eager to submit this case for consideration and to finally bring some closure to the victim’s family.”

The case was determined to be eligible for advanced forensic DNA testing and the HCSO sent Othram a DNA extract from the remains. Othram scientists used Forensic Genome Sequencing to build a comprehensive DNA profile for the female.

Utilizing this profile and forensic genealogy, a potential DNA match was developed for a close relative. Investigators contacted the relative, inquiring if they had any missing family members. The relative stated that their family member, Kerry Cummings, had been missing since the mid-1990s.

HCSO Investigators were able to track down Kerry’s sister, Kathie Cummings, who confirmed that Kerry’s last contact with family was in 1997. Kathie Cummings provided investigators with a DNA sample which was then compared to the DNA sample from the unknown female’s remains.

These DNA profiles were confirmed to be a genealogic match — officially identifying the remains as that of Kerry Ann Cummings, born in 1972.

During her last contact with family in 1997, Kerry was suffering from untreated mental illness and told family that she was couch-surfing in the Eugene, Oregon area. Despite multiple offers from her family, she refused to come home.

“Kerry was beautiful, funny, smart and an artist. She was great at making us laugh,” Kerry’s sister, Kathie Cummings, told investigators. “It is devastating what mental illness can do in a span of only two short years.”

Kathie told investigators that after Kerry went missing her parents tried to report her as missing in Arizona and Oregon, and even hired a private investigator, but due to laws surrounding the report of missing persons at that time, a missing persons report was never taken. Therefore, Kerry was never listed as a missing person or entered into any national missing persons databases.

“Unfortunately, back then they were told that Kerry was an adult, that she had chosen the lifestyle, and that if she wasn’t a threat to herself or others, there was nothing that [law enforcement] could do,” Kathie said. “As the internet expanded, I took to searching the NamUs website when I was missing her, scanning for mention of her tattoo and searching through the pictures of the Jane Does. She was dearly loved.”

The Humboldt County Coroner’s Division is working with family members to release Kerry Cumming’s remains for burial with other deceased family members.

“I’d like to thank the California Department of Justice DNA Lab and Othram for once again providing outstanding work and assistance in solving this case,” Sheriff William Honsal said. “While we can’t take away the pain of loss, we hope that this identification can help bring closure to Kerry’s family and the community. I’m thankful for the dedication of our investigators who never gave up on Kerry and continue to seek resolution for the outstanding cases that remain to be solved.”

The HCSO is continuing its partnership with the CA DOJ and Othram, and is reviewing other missing and unidentified persons investigations for the use of this DNA technology. This effort is partially funded by the county’s Asset Forfeiture Fund, with additional grant funding anticipated in the near future to continue this work.

Anyone with information about this case or other unsolved homicides is asked to contact HCSO Investigator Mike Fridley at 707-441-3024. A full list of the HCSO’s unsolved cases and current missing persons can be located at https://humboldtgov.org/2772/Unsolved-Cases.