The Ranch Fire in Azusa, Calif., east of Los Angeles, in August. Several years of brutal fire seasons have hit insurers hard. Credit…Apu Gomes/Agence France-Presse/Getty

As wildfires burn homes across California, the state is also grappling with a different kind of climate predicament: How to stop insurers from abandoning fire-prone areas, leaving countless homeowners at risk.

Years of megafires have caused huge losses for insurance companies, a problem so severe that, last year, California temporarily banned insurers from canceling policies on some 800,000 homes in or near risky parts of the state. However, that ban is about expire and can’t be renewed, and a recent plan to deal with the problem fell apart in a clash between insurers and consumer advocates.

Insurers are widely expected to continue their retreat, potentially devastating the housing market if homes become essentially uninsurable.

“The marketplace has largely collapsed” in those high-risk areas, said Graham Knaus, executive director of the California State Association of Counties, which has pushed state officials to address the problem. “It’s a very large geographic area of the state that is […]

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