Insurance Crisis Spreading Beyond California to Colorado, Oregon, and Beyond

The wildfire insurance crisis is no longer a California-specific problem. In Colorado, several of the five largest carriers are declining coverage in foothill communities, and average premiums have soared nearly 60% in five years. Oregon faces a similar squeeze, with major insurers pulling back and homeowners reporting quadrupled premiums. Nationally, FAIR Plans across all states now cover nearly 3 million properties with exposure exceeding $1 trillion. Any state with a wildland-urban interface, from Montana to New Mexico to Washington, is seeing the early stages of the same pattern California experienced five years ago. This matters because the policy playbook being written in California will be replicated across the western United States, and that playbook is not working. States that have not yet experienced a catastrophic coverage crisis have an opportunity to implement structural reforms before their markets collapse, but most are not doing so. Homeowners in Colorado, Oregon, and other western states are watching California's crisis unfold and recognizing the same warning signs in their own non-renewal letters, but there is no coordinated multi-state response. Each state is independently reinventing the same inadequate solutions: FAIR Plans, moratoriums, and piecemeal rate approvals. The structural reason is that insurance regulation in the United States is state-by-state under the McCarran-Ferguson Act, which means there is no federal framework for addressing a climate risk that does not respect state boundaries. Wildfire risk is driven by regional climate, fuel conditions, and development patterns that span multiple states, but the regulatory response is fragmented across fifty different insurance departments with different rules, different rate-setting processes, and different political pressures. A federal wildfire insurance program analogous to the National Flood Insurance Program has been proposed but faces resistance from both insurers who fear government competition and from states that guard their regulatory authority. Meanwhile, the crisis expands one state at a time.