A recent rule change could cause a spike in insurance premium for homeowners across California, as the costs of the Los Angeles area wildfires are passed onto them in a way that was not allowed in the past.

Note that policy costs in these high-risk states, minus California, averaged $5,040 – roughly 150% more than Golden State prices. And the 48-state average policy of $3,200 is 50% above California’s cost. Insurance companies are not saints, but you want them to be profitable.

A recent moratorium now protects California policyholders from losing home insurance coverage for at least one year if their home is near a site affected by wildfires.

The California FAIR Plan, the state’s insurer of last resort, had just $377 million available last week to pay claims that could reach billions, officials said.

The wildfires in Southern California have put a spotlight on the home insurance industry. Companies are being confronted with massive new claims. This comes at a time where some insurers have reportedly agreed to sell new policies in fire prone areas.

The Palisades and Eaton wildfires have decimated entire suburban neighborhoods — and extinguished any hopes of fire-insurance relief for urban centers across California.

Many LA homeowners were dropped by their insurance companies a year before the fires. Is there a better way to make the insurance industry more affordable and sustainable?