Wildfire Risk in California Drives Insurers to Pull Policies for Pricey Homes

AIG and Chubb are cutting back on coverage of multimillion-dollar homes, following years of non-renewals by midrange insurers

In early September, the Caldor Fire continued to spread in Northern California, prompting evacuations from South Lake Tahoe, in a region that is popular with tourists. Roads out of the resort city were lined with cars as people fled. Photo Credit: Noah Berger/Associated Press
By

Leslie Scism

Worried about wildfire exposure and frustrated by state regulations, insurers in California have been cutting back on their homeowner businesses. Now, affluent homeowners are feeling more of the pain, as two of the biggest firms offering protection for multimillion-dollar properties end coverage for some customers.

As early as this month, American International Group Inc. will begin notifying about 9,000 customers in its Private Client Group that their home policies won’t be renewed this year. The change is part of a plan by AIG to cease selling home policies in California through a unit regulated by the state’s insurance department.

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