Mercury Insurance will begin writing new homeowners insurance policies in Paradise, California, becoming the first major insurance company to do so since the town was engulfed by the “Camp Fire” burning in November 2018.
Victor Joseph, president and chief operating officer of Mercury, said the decision to reenter the market was influenced mainly by the efforts of state and local officials, as well as by the residents of Paradise.
The company said that California Department of Insurance Commissioner Ricardo Lara’s Sustainable Insurance Strategy, and the city official and residents’ commitment to reducing wildfire risks through urban planning were pivotal factors in re-entering the market.
“Our team has taken numerous trips to the city to see the transformation firsthand, and what we’ve seen makes us confident that Paradise can serve as a model for other cities facing similar challenges,” Joseph remarked.
The town started to update its building ordinance in July 2022, requiring all new homes to be built in compliance with the Wildfire Prepared Home standard of the Insurance Institute for Business & Home Safety (IBHS), for them to be well-positioned in dealing with future fire events.
Roy Wright, IBHS president and CEO, praised the town’s efforts in rebuilding and upgrading their community.
“Wildfire has a role in nature. Yet, the goal we aim to achieve is to keep it from entering our neighborhoods and consuming homes. And that’s where Paradise is leading the way in community resiliency, using our research to build back stronger,” he said.
Mercury’s return to the Paradise market could encourage other insurers to go back, Joseph said, adding that it is vital that insurers support the communities’ efforts to build greater resilience against wildfires.
The 2018 Camp Fire was dubbed as the deadliest and most destructive wildfire in California. The fire, which started on Nov. 8, 2018, burned through 95% of the area of Paradise and Concow, and was contained after two weeks on Nov. 25. It led to 85 fatalities and destroyed more than 18,000 structures for an estimated $16.5 billion in damage.
