The Oak Fire in Mariposa County, California, now at 17,000 acres and rapidly growing, started just 10 days after a public hearing in which the state’s RV park and campground operators complained about the lack of affordable fire insurance. The California FAIR Plan (for “Fair Access to Insurance Requirements”) was established to ensure that property owners would still be able to buy basic fire insurance when commercial policies are either too expensive or simply unavailable. But what do you do when your lifeboat also is being swamped?
Described by the fire battalion chief as “really unprecedented” because of the speed with which it is ravaging the landscape, the Oak Fire underscores the degree to which insuring against fire losses in California is as problematic as insuring against hurricane damage on the Carolinas’ Outer Banks. You know the storms are coming, you know they’re getting bigger and more frequent and more destructive with each passing year, and if you’re an insurer you know with utter certainty that they’re going to bleed you dry. No surprise, then, that California’s private insurers have been jacking up their premiums by 20% to 40% a year or more-or not underwriting new policies at all.
That’s where the FAIR Plan is supposed to step in, with the state’s private insurers holding down premium costs by pooling their risks and providing barebones coverage. FAIR is not intended to replace regular insurance policies: it’s a safety net, an insurer of last resort. But even a safety net is not immune to the same risks that make insurance unaffordable in the first place, which means that the FAIR Plan’s premiums also have been skyrocketing, even as the coverage it offers has become skimpier.
So the July 13 public hearing quickly became a platform of grievance for the California Outdoor Hospitality Association (COHA), representing the state’s privately owned RV parks and campgrounds. COHA chair Dyana Kelley complained that unaffordable insurance rates would put campgrounds, RV parks and hotels out of business while driving up the cost of travel throughout California, chasing tourists to other states. Moreover, the coverage provided by the FAIR Plan is too limited, covering only four of the 11 specific insurance risks or perils found in a typical property policy.
Okay. Arguable points all, if still leaving unaddressed the question of who gets dunned for the higher costs COHA would like to see the FAIR Plan absorb–costs, if the private sector bows out, that would have to be covered by taxpayers. But then Kelley added a twist that amounted to little more than a naked grab. “As an industry, we are being tasked with expansion,” she told the hearing, as if the state’s campground operators were on some kind of holy mission. “We have more camping consumers than we have accommodations, yet one of the greatest barriers to entry into our industry is the ability to obtain insurance with appropriate coverage at reasonable rates.”
Actually, no. One of the greatest barriers to entry is a tinderbox of a landscape that makes “business as usual” a fond memory, never mind expanding that business to put even more people–those beloved tourists–and campground infrastructure in harm’s way. What Kelley and her constituents are suggesting is tantamount to building in a floodplain or on an eroding shoreline, then complaining that they just can’t afford to pay for the insurance coverage that they inevitably will need. Maybe don’t build there in the first place?
The question of what to do about existing campgrounds and RV parks that are on the firing line–some in place for decades–is a thorny one, and deserving of reasoned analysis and decision-making. But it has to start with an understanding that much has changed in those decades, and that insisting on more of the same is a non-starter. No one is “tasking” the industry to expand; if anything, it should be contracting. While there’s still time.