As Californians already face significant challenges finding home insurance, the fires ravaging Los Angeles County could make it even more difficult and costly to insure properties in the future.
Deadly fires erupted beginning Jan. 7, causing at least 11 deaths, leading to the ongoing ordered evacuation at one point of more than 180,000 individuals, with another 200,000 warned to get ready for possible evacuation.
More than 10,000 buildings are damaged or destroyed across the county, according to the latest estimates, with the number expected to rise as fires are minimally contained, in what some are describing as one of the most costly natural disasters in American history. AccuWeather estimates economic losses from the fires to reach up to $150 billion.
As of the latest tally on Jan. 9, the Pacific Palisades fire destroyed nearly 6,000 structures, including oceanfront mansions in neighborhoods north of Santa Monica, where homes sell for between $7 million and $20 million, with an average price of more than $3 million across the city.
The affluent area is made up of primarily white-collar workers, according to Cal Fire demographics data, which shows slightly fewer than half of the structures affected by the Palisades Fire were built since 1970, and about 12,000 are older.
Videos of the aftermath show businesses and homes leveled by fire, with the blocks of some neighborhoods completely demolished by the inferno.
State Farm non-renewed approximately 1,600 policies in the region in 2024, of approximately 30,000 homeowners and 42,000 apartment policies it dropped statewide, citing rising costs and risks.
“This decision was not made lightly and only after careful analysis of State Farm General’s financial health, which continues to be impacted by inflation, catastrophe exposure, reinsurance costs, and the limitations of working within decades-old insurance regulations,” the company said in a statement.
“State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws. It is necessary to take these actions now.”
Approximately 6,000 structures were lost in the Eaton Fire, as of the most recent count on Jan. 10. The East Altadena and Hasting Heights neighborhoods sustained significant damage.
The average value of homes in the area is approximately $1.4 million, according to the online real estate listing firm Zillow.
Ricardo Lara, commissioner of the state’s Department of Insurance, issued a one-year moratorium on Jan. 10, preventing non-renewals and cancellations for households in and adjacent to the fire sites.
“I am using my moratorium powers … so people don’t face the added stress of finding new insurance during this horrific event,” he said in a statement. “I am working on all fronts to make sure wildfire victims get the benefits they are entitled to, and they get it as soon as possible.”
Insurance Market Stability in Question
With losses mounting, California’s already precarious insurance market could become more challenging if insurers become more hesitant to write policies.
The state is going through what lawmakers and other elected officials have deemed a “genuine crisis” that is affecting millions of Californians.
Supervisors in counties from across the state passed resolutions last year calling for a state of emergency due to a lack of affordable insurance.
“At this point, it’s not an exaggeration to say the state’s facing an insurance crisis of both affordability and availability,” Ray Mueller, San Mateo County supervisor, said during a board meeting on Oct. 8.
Seven of the 12 largest insurers, including State Farm which represents about 10 percent of the market share, according to Department of Insurance data, paused writing new policies since 2023.
A lack of availability has left many Californians with only one option, the so-called FAIR plan—an insurer of last resort financially backed by insurance companies.
In the event the plan goes insolvent, insurers are on the hook to cover the losses, with each company paying out based on market share—thus incentivizing limiting liability by reducing exposure, analysts said.
The number of homes insured with the FAIR plan skyrocketed in recent years—now totaling more than 450,000 policies—overwhelming staff assigned with managing calls, representatives with the state’s Department of Insurance testified to the Senate Insurance Committee last year.
Those stuck with the plans say they’re anything but fair, with some households paying as much as 500 percent more for less coverage.
Coverage was limited to $3 million per structure for residential homes, which could pose a problem for some homeowners in coastal areas impacted by fire where values far exceed the cap.
It is unclear how many homes affected by the recent fires were covered by the FAIR plan.
Regulatory Hurdles
Insurance companies have shied away from doing business in the Golden State because of strict regulations that limit rate hikes and stall application processes, Rex Frazier, president of the Personal Insurance Federation of California, told The Epoch Times.
He called for an expedited approval process and said the higher construction, labor, and reinsurance costs dictate the need for more expensive premiums.
Some of the largest insurers recently requested price hikes of 30 percent or more, and the insurance department is processing the applications.
“The problem is that the solution to the problem is going to be higher premiums, and people aren’t going to like that,” state Sen. Roger Niello, vice chair of the Senate’s Insurance Committee, told The Epoch Times.
The industry points to a challenging regulatory environment exacerbated by fire risk and inflation as reasons companies are reducing coverage in California.
Other points of contention for insurers are strict rules set in place by Proposition 103—known as the Insurance Rate Reduction and Reform Act—narrowly approved by voters in 1988 to oversee the industry after automobile insurance prices spiked.
“It’s a real issue,” Niello said. “And it’s a problem because we passed an initiative 30 years ago with an extremely small margin of victory … in a market and under circumstances that were completely different than they are now.”
Looking for Solutions
Insurance department officials have agreed that some of the regulations are inhibiting progress.
“Californians in every corner of our state are frustrated with outdated regulations and desperate for change,” Commissioner Lara said in a June 2024 press release. “We are addressing this crisis of insurance availability head-on. For the many Californians who live anywhere where wildfires are a threat, my strategy will increase their options while requiring insurance companies to take their wildfire safety actions seriously,”
He released new guidelines last year that will allow insurers to use models that will allow for higher pricing, and the cap on FAIR plan coverage is raised to $20 million per structure.
To help reduce the number of homeowners relying on the FAIR plan, the new rules require insurers to increase the number of policies written in high-risk areas by at least 5 percent.
One policy analyst said removing government oversight and allowing a free market to determine pricing could be a more effective solution.
“Deregulation is a simpler answer. Hundreds of insurers could then freely compete for Californians’ business, with third parties informing consumers about each company’s financial status and claims-handling behavior,” Marc Joffe wrote in a December analysis for the Cato Institute.
“And there would be an added bonus: by eliminating the Department of Insurance, the state could reduce its 3 percent tax on insurance premiums, part of which funds the department, providing an immediate savings for consumers.”
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Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.