Riding the Waves of the West Coast Insurance Market

I could leave today… California Dreamin’ is not just a popular song by The Mamas & the Papas but represents the allure and longing many seek when venturing to the West Coast; where residents, tourists, and visitors alike enjoy endless sun-kissed beaches, majestic mountains, and vibrant cities. Whether you want to surf on Waikiki Beach in Hawaii, climb Alaska’s Flattop Mountain, or relax in wine country, America’s Pacific Coast has you covered. It’s where technology, innovation, and outdoor businesses flourish; adventurous spirits thrive; and dreams are made.

However, it’s also where dreams can quickly become broken. While the region, including Alaska, California, Hawaii, Oregon, and Washington, attracts millions of people each year and is experiencing  tremendous growth, it also comes with some disadvantages. This region is prone to severe weather events and natural disasters, leaving unprepared property owners vulnerable to significant and potentially catastrophic losses. 

Severe weather slams the West and Pacific

If you live in this area, you’ve probably experienced your fair share of severe weather—from wildfires to earthquakes, hurricanes, and, in some places, even volcanic eruptions. As climate change progresses, these weather events become more intense and impact not only your insurance rates but also your coverage availability.

Drought and wildfire

Severe drought conditions and periods of extreme heat have proven to be a fiery combination for California, Oregon, and Washington. Over the past four years, drought in these three states has caused combined damages of between $4.5 billion and $11 billion. Dry conditions have further exacerbated an already fire-prone region, and during that same period, these coastal states were ravaged by wildfires, with damages totaling between $23 billion and $57 billion.

Nothing sums up the destructive potential of natural disasters more than the wind-fueled wildfires of January 2025 in the Los Angeles area. Traditional Santa Ana winds, some exceeding 70 mph, made fighting the fires nearly impossible for several days. The estimated cost of this disaster could reach more than $250 billion, making it the costliest wildfire event in California history.

Neither Hawaii nor Alaska was spared from wildfires. Maui’s Lahaina fire in August 2023 made headlines and caused up to $10 billion in damages. Alaska also experienced the destructive Lime Complex Fire, which caused up to $100 million in damage and burned more than 3.1 million acres.

Fault-line events

Alaska, Washington, Oregon, and California are all located along active fault lines that are part of the infamous “Ring of Fire.” Although not directly in line on the “Ring of Fire,” Hawaii experiences the fallout from fault-line activity. This includes the elevated risk of earthquakes, landslides, and the possibility of volcanic eruptions and tsunamis.

• Volcanic activity: Kilauea on Hawaii’s Big Island is one of the world’s most active volcanoes. Since December 2024, it has been intermittently erupting within the summit caldera in Hawaii Volcanoes National Park, impacting the local and global climate. Currently, geologists are monitoring Alaska’s Mt. Spurr volcano after it experienced over 100 shallow earthquakes in the area.
  
  
• Earthquakes: While California grabs most of the headlines about earthquakes, Washington has had its own tremors. Notably, the strongest recent earthquake occurred on February 26, 2024, with a magnitude of 4.9, located 158 miles southeast of Walla Walla.

Flooding

Pacific Ocean weather patterns have a profound effect on the West Coast, such as torrential rains that fell in Southern California between December 2022 and March 2023, causing widespread flooding and an estimated $4.7 billion in damage. 

Winter storms

Both Oregon and Washington experienced three billion-dollar winter storm events, totaling between $2 and $4 billion in damages over the past four years. In January 2024, a large storm hit both states, bringing ice and strong winds that caused damage to properties and infrastructure.

It’s essential for residents of these states to take proactive steps to protect their homes and valued assets; otherwise, it may affect their coverage.

Pacific breeze sways insurance coverage

With the potential for increased wildfires and flooding, along with the mounting cost of claims, residents in these impacted areas may face a “hard” market. From 2019 to 2024, residents have seen cumulative increases in home insurance rates across the entire region. California leads the way at 48.4%, with Oregon and Washington close behind at rate increases of 42.1% and 33.7%, respectively. Both Hawaii and Alaska experienced more modest increases of 15% and 6.8%.

It is too early to say for certain how the 2025 Southern California wildfires may impact the market in the state, its residents, and beyond. However, S&P Global predicts that property insurance carriers may raise rates and/or reduce coverage options in California and other at-risk areas, such as Washington and Oregon.

Personal auto rates tell a different story in Hawaii and Washington, which offer some of the least expensive rates in the nation by true cost, according to data from 2019 to 2024. California still tops the charts in terms of rising rates, with personal auto rates jumping significantly.

For those living in the West, it’s important to be aware that it may become more costly and difficult to find insurance as companies look to reduce their exposure to losses in high-risk areas and are passing on increased costs to homeowners.
 

Stay safe while you surf

Unfortunately, cybercriminals show no mercy during natural disasters. During the recent Los Angeles wildfires, there were multiple reports of cyber thieves launching phishing schemes designed to collect relief funds from residents and even displaced pets. Overall, homeowners and businesses on the West Coast are increasingly becoming susceptible to cybercriminal activity. California, for example, reported over $2 billion in losses due to cybercrimes in 2023. Californians filed 80,000 complaints, with reported losses increasing by more than $100 million from 2022. Similarly, in 2024, over 11.6 million data breach notices were sent to residents in Washington.

Common sense strategies, such as using strong passwords, multifactor authentication, adopting a “zero trust” policy, and always checking with your source directly before authorizing payments or transfers of money, can go a long way in keeping you safe. Additionally, if a severe weather event impacts your area, be aware of phishing scams and fake emails coming from scammers. Learn more here.

Waves of legislative action on the horizon

California is leading the way, with legislators working to help homeowners combat rising insurance rates. One proposal that seems to have momentum is an idea to require insurers to pay homeowners 100% of the coverage for belongings inside destroyed homes without the need for an itemized list. Similar legislation in Oregon, following catastrophic fires there, requires insurers to pay 70% of the coverage limit without an inventory. If California passes the legislation, it will be the only state in the nation requiring 100% insurance payouts without an itemized list.

Additionally, in California, the California DOI announced in 2024 that it would allow insurance carriers to raise rates while not being legally required to offer coverage in wildfire-prone areas. The use of catastrophe modeling (CAT modeling) has been allowed by states across the country, but in California, it is now being used by carriers to properly price risk, with the goal of expanding options for homeowners and stabilizing the insurance market.

Meanwhile, a Washington House Bill was introduced at the start of 2025 to require car insurance policies to allow for an appraisal to resolve disputes about the cash value and amount of loss on a damaged vehicle. 

The Hawaiian Supreme Court recently ruled that insurance companies cannot bring legal action against those blamed for the devastating Maui wildfire in 2023. It is not yet known what legislation, if any, may come from this ruling, but it’s important to note for Hawaiian residents.

Legislators in Alaska are considering Senate Bill 11, which aims to create an Alaska Flood Authority and an Alaska Flood Insurance Fund to supplant the Federal Emergency Management Agency's National Flood Insurance Program.

Change the tides with risk mitigation strategies

While legislators are working hard to get their legislation passed, property owners in the West and Pacific can take measures to retrofit their homes and build them to better withstand earthquakes, flooding, wildfires, and winter storms. Here are some tips to help mitigate your risks if any of these severe weather events are common in your area:

Earthquakes

• Install a seismic shutoff valve or earthquake shutoff valve on the gas line.
• Strap the hot water heater to the wall.
• Secure heavy items whenever possible.

Learn more about earthquake mitigation tips. 

Flooding and water damage

• Install a water shutoff valve in your home. These are critical for preventing water damage, as they allow homeowners or plumbers to rapidly stop water from entering a home while a leak is isolated and fixed. In many Western states, water shutoff valves are mandatory or highly recommended.
• Consider lifting your home above the base flood elevation, especially if you live on the coast.
• Use passive floodproofing techniques, such as replacing doors and windows with floodproof products and using newer active floodproofing solutions instead of sandbags that can be deployed in the event of a flood.

For more details and other flood mitigation strategies, read our Rising Waters blog.

Wildfires

• Plan in advance and maintain a regular maintenance schedule.
• Keep roofs and gutters clear of trees, leaves, and debris to create defensible space around your home, and consider installing helpful products like ember-resistant venting, gutter guards, Class A-rated roofs, and products labeled “CAL FIRE approved.” 
• Zone 0, or the “immediate zone,” has become increasingly critical in defending homes from wildfire events. Carriers want to see no mulch or combustible plants, such as juniper, cypress, or other coniferous plants, in this area. Zone 0 should consist of stone products or bare earth, and be maintained to keep combustible debris, such as leaves or pine needles, out of this space.

For more details and other wildfire mitigation strategies, read our From Ember to Ash blog.

Winter storms

• Add a backup generator.
• Install low-temperature monitoring. Review additional winter storm mitigation tips.
• Proper roof maintenance is important. Keep gutters and roofs clear of debris, and apply heat tape in some areas as needed, or use other mitigation efforts to prevent ice damming.  

Learn more about winter mitigation tips. 

These are some high-level tips for you to consider implementing. For more details, please see our complete list of risk mitigation strategies. If you’d like help preparing a personalized plan for your property and valuables, please reach out to schedule a risk consultation.

Working with us

Clients facing the challenges of a hard market often benefit from the expertise of a professional insurance advisor who works with multiple insurance companies and can provide counsel and advocacy specific to the West Coast and Pacific. Whether you are buying a new home in a risk-prone area, looking for new coverage after a non-renewal, or considering changing insurers after a steep premium increase, we are here to assist you in navigating your insurance options.