California’s multibillion-dollar home insurance industry would have you believe it’s on the verge of collapse. In recent years, we’ve seen major insurance companies pull out of California, citing an inability to handle the state’s wildfires and other natural disasters. Other large insurers have threatened to follow suit — and then stayed put, using that threat as a pretext to demand unaffordable rate hikes on residents. They do all of this while investing our premiums into the fossil fuel companies that are accelerating these disasters.

Despite devastating wildfires resulting in thousands of claims, insurance profits are higher than ever. In a deep dive into how insurance companies are making money, climate researcher Kate Aronoff found that, complicating the picture, California “has in recent years been among the country’s most lucrative states for [insurance] companies.” Aronoff also points out that, in 2023, the year State Farm stopped insuring California, the state actually “buoyed the company’s performance nationally.” Risk is good for business.

These companies are using climate disasters as an excuse to keep the customers they want and to dump the rest. Then they charge their remaining lower-risk customers higher premiums, justifying these rate increases by pointing to wildfire risk while off-loading that actual risk to California’s insurer of last resort, the FAIR Plan.