AMNA NAWAZ: Before thousands of# people in Los Angeles lost their## homes in the recent deadly wildfires,# many of them had lost their insurance.

William Brangham recently spent time# in the region to better understand## the state's insurance crisis, as costs# rise dramatically and coverage shrinks.

As William reports, there is no easy fix,## especially in a world dealing with the# long-term impacts of climate change.

WILLIAM BRANGHAM: So your place was right here?

PEGGY HOLTER, California Resident:# Right here on the corner.

WILLIAM BRANGHAM: This is all that's left of# .. tucked in the hills of the Pacific# Palisades, is now unrecognizable.

PEGGY HOLTER: It's really hard# on my son because he was born in## this house and went to school,# lived his whole life.

He said:## "These were the stairs where I waited outside# after school for you to come and pick me up."

WILLIAM BRANGHAM: In a matter of hours last month,## the Palisades Fire consumed her# whole neighborhood.

It left just## a few small reminders of the past, like# this tea set she was given as a child.

For now, this retired journalist## is staying with her son.

PEGGY HOLTER: I just don't know.

And that's as somebody who's always known what# I was going to do and where I was going to be## and all that stuff all my life.

It just# seems like there's a blank in my future.

WILLIAM BRANGHAM: Your life# savings was in this property.

PEGGY HOLTER: Yes, exactly.

WILLIAM BRANGHAM: And you're not going to# get any of that, nearly all of th.. PEGGY HOLTER: No.

WILLIAM BRANGHAM: Holter says that's# because her in.. dropped her policy last year.

They# cited the condition of her roof,## something only her homeowners# association could address.

It was part of a massive insurance# retreat from this area.

In 2023,## State Farm, which is California's largest insurer,## said it wouldn't write any new policies# in the state.

Then, last year, it declined## to renew about 30,000 existing policies here,# including over 1,600 in the Pacific Palisades.

The company said the rising cost of# rebuilding and the risk of extreme## weather was too great.

But even# for those who did have insurance,## like Holter's neighbors, Pam Nye and Chuck# Foster, the fires have been devastating.

As a home, as a place, as# a refuge, what was it like?

CHUCK FOSTER, California Resident:# A place where you felt loved,## a place where you felt comfortable.# It's just a little piece of heaven.

WILLIAM BRANGHAM: Since their# home and neighborhood burned,## Nye and Foster have bounced from hotel to hotel.# Before the fires, they were paying Farmers## Insurance about $5,000 a year for coverage,# which they say included fire protection.

So,## after they lost everything, they went to meet with# Farmers in person, hoping to speed up their claim.

PAM NYE, California Resident: They asked us# a lot of questions.

And then, at one point,## they said, you really have no coverage.

You have## flood insurance.

I looked at her# and I said, that can't be right.

WILLIAM BRANGHAM: Farmers didn't# respond to "News Hour"'s request## for comment.

But Foster and Nye have# been calling their insurer almost daily,## looking for clarity while# reflecting on all they have lost.

PAM NYE: I couldn't believe in# my wildest dreams that would## ever happen to us.

I always thought# that, despite the fact that we were## living in the mountains and living# in a forest, that we would be safe.

WILLIAM BRANGHAM: Imagine you're looking# for a place to live.

A neighborhood## like this looks pretty appealing,# beautiful houses up in the hills,## surrounded by woods.

I mean,# who wouldn't want to live here?

But if you are an insurance company,# this neighborhood looks very,## very different.

A place like this# with houses surrounded by forests## is a potential disaster in the making.# And that's exactly what happened here.## And this is why insurance companies# have been leaving this area in droves.

AMY BACH, Executive Director, United# Policyholders: California has been## in the grip of an insurance crisis f.. WILLIAM BRANGHAM: Amy Bach is executive# director of United Policyholders.

They're## a California-based organization that helps# people deal with insurance companies.

AMY BACH: Consumers were getting dropped regularly# from insurers that had been ensuring them for## decades.

People were having a really hard# time replacing their coverage.

Competition## had slowed to a virtual standstill in a lot# of zip codes.

People were increasingly having## to turn to either a brand name they'd never heard# of or the state-supported insurer of last resort.

WILLIAM BRANGHAM: That insurer of last# resort is called the California FAIR## Plan.

And as the private market# shrunk, the FAIR Plan exploded,## more than doubling the number of# policies in the last few years.

Does the FAIR Plan have enough money in# reserve to cover the cost of these wildfires?

RICARDO LARA, California Insurance# Commissioner: The FAIR Plan will## have enough money and will remain s.. WILLIAM BRANGHAM: Ricardo Lara is# California's insurance commissioner.## Last year, to move people off the FAIR# Plan and bring private insurers back,## Lara's office pushed through a series of# reforms, including allowing companies to## consider future impacts of climate change# when setting rates and letting insurers## pass along the cost of insuring themselves,# what's known as reinsurance, to homeowners.

RICARDO LARA: If we're going to# ever get to affordable rates,## we have to get to tackle the availability# issue.

Insurers have to come back to## California and expand in order to bring down# the cost, and that is what the reforms do.

WILLIAM BRANGHAM: Lara says his job# is to strike a delicate balance.

RICARDO LARA: You have to make sure you have# a solvent and strong market and that you have## the consumer protections to make sure that they# can pay out those claims when people need it.

My## role right now for these fires is to make sure# that they're paying out the claims that they## owe to Southern Californians who are trying to# rebuild, recover after these catastrophic fires.

If they don't do that, I'm going to go after them.

WILLIAM BRANGHAM: In a statement to the# "News Hour," State Farm said it's already## paid out more than a billion dollars in# fire claims and is -- quote -- "bringing## the full-scale and force of our catastrophe# response teams to help customers recover."

But, last week, the company asked# Lara to approve an emergency rate## hike averaging 22 percent, saying -- quote --# "We must appropriately match price to risk.

"## Lara's office is now analyzing the proposal.

And he says these wildfires prove that climate## change is already upending everything# about the state's insurance market.

RICARDO LARA: Here, we're talking about fire# today, but there's sea level rise.

There is## extreme heat.

There is catastrophic flooding from# atmospheric rivers.

Climate change has affected## every aspect of our lives, and I would be lying to# you if I told you that doesn't impact insurance.

WILLIAM BRANGHAM: Back in the Palisades, Chad# Comey and his family, like a lot of Californians,## had already been priced out of# the private insurance market.

This## complex was where his family lived for three# generations, and they have lost everything.

The exterior was covered by the FAIR Plan, but he# says any claim likely won't be enough to rebuild.

CHAD COMEY, California Resident: I don't know if# we will be able to keep it in the family, just the## financial hardships that come with being with,# one, for us not having insurance on our unit.

WILLIAM BRANGHAM: So you guys had no# insurance whatsoever for the inside?

CHAD COMEY: For the inside, no insurance, no.

WILLIAM BRANGHAM: And why is that?

CHAD COMEY: My parents couldn't afford it.

They're## living Social Security check to Social# Security check, and they -- and it was## never in the -- it was never financially# feasible for them to purchase insurance.

WILLIAM BRANGHAM: Peggy Holter's exterior# was also covered by the FAIR Plan, but,## like Chad Comey, she thinks the payout will# be far less than her home's actual value.

Meanwhile, State Farm has offered to renew some# of the policies it dropped in the fire zone,## but Holter believes she likely won't qualify.

What about the argument that the insurance# companies make that it is just too dangerous## to have people living in what could# be and turned out to be a tinderbox,## and that they can't take that risk?

PEGGY HOLTER: When this was built,# it had everybody's approval.

They## chose to insure it for 47 years.

I# mean, what's good?

They made money## off people for 47 years.

That's the point of# insurance, isn't it, that you chip in, and,## when somebody else needs it, they get# it, and when you need it, you get it.

But, in this case, they're# saying, we're sorry.

Too bad.

WILLIAM BRANGHAM: These wildfires could turn# out to be the costliest in American history.

So,## for this region to rebound, the state and its# insurers will have to find a way to manage## the growing risks of living in a warming world.

For the "PBS News Hour," I'm# William Brangham in Los Angeles.