More and more rural homeowners in California are receiving notices from their insurance companies stating that their coverage will be dropped due to their increased risk of wildfire. In some cases residents are given the option to retain their coverage if they clear all trees 100 feet around their house, or something similar.

This brings up two possible viewpoints:

-The insurance companies are thoroughly screwing the homeowner. The homeowner who has been paying policy premiums for (possibly) years now faces a cancellation of that policy without so much as a free T-Shirt for his or her time and money. Big insurance is simply concerned with cutting their potential losses in the future.

-The insurance companies are practicing smart business and not making investments that they think have a high probability of loss. They are not going to insure a $500,000 house for a few thousand a year if it has a 50% chance of being within a fire area in the next 5 years. The math simply doesn’t work out.

Both sides seem to have valid points; however the core concept is being missed by those homeowners claiming the insurance companies are evil. The business of insurance seeks to charge a large base of customers each a fraction of the value of something, in order to cover the hopefully small amount of claims they have to pay, operating costs and ideally profit.

If these homeowners were to take steps to clear defensible space around their homes, install a water tank for firefighting and take other fire prevention measures, they would probably find insurance companies willing to cover them. The bonus part of this is that those measures vastly decrease the chances that a fire would damage their home, and vastly increase the chances that the fire department would be able to protect it.

There are of course homes that are in areas of dense vegetation and small lot size where it is not possible to clear adequate space around their home. These situations call for a collective neighborhood plan to create fire breaks and clear space. Even with this, insurance may not be available. These homeowners will have to come to terms with the fact they will have to live with the risk, or move.

People need to realize they cannot live in a densely wooded area and expect to have an insurance company willing to cover them. Insurance is a service, you pay to have it, and you do not have the “right” to have it. If you wish to live in a rural fire prone area, there may or may not be someone willing to take the bet that your house will not burn. Get over it!

The catch in all this is of course our rule and regulation happy society. Many lenders (if not all) require a person to purchase and carry insurance before they will loan money to purchase a home. Sorry, but perhaps you should purchase a home that is insurable.

The moral of this story? Stop whining and realize that you are not entitled to nearly as much as you think you are.