by Connor O’Keeffe, Mises Institute:
Last week, parts of Los Angeles, California, were devastated by a series of especially destructive wildfires. While fires are common in the southern California region, a couple of factors came together to turn last week’s flare-ups into major conflagrations.
First, LA experienced a lot of rainfall in 2022 and 2023. The wet conditions spurred the growth of a lot of brush and grasses on the hills surrounding LA’s metropolitan area. 2024 brought an exceptionally hot summer and almost no rain during what was supposed to be the wet season, which dried out the now abundant vegetation.
The various state and local government authorities that own this wilderness obviously did not clear this dried-out brush with effective methods like tree thinning and controlled burns, leaving the surrounding urban areas vulnerable.
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The second factor was the wind. The region frequently experiences strong, warm winds that originate high in the southern Nevada desert and travel down across California into the Pacific Ocean, gaining speed and intensity as they squeeze through the mountains and canyons surrounding Los Angeles. These winds are common and, therefore, predictable enough to have a name: the Santa Anas.
Wind is air moving from an area with high air pressure to an area with lower pressure. And last week, a high-pressure system stalled over Utah while a low-pressure system was present off the Pacific coast. The result was record-setting Santa Ana winds, with some gusts reaching over 100 mph.
For reasons that remain unknown at the time of writing, several fires started in the hills surrounding the Los Angeles Basin last Tuesday. The heavy Santa Ana winds helped the fires spread quickly through the dry brush, filling the government-owned land towards Los Angeles suburbs like Altadena and the Pacific Palisades. On Tuesday and Wednesday of last week, the fires tore through these towns. While virtually everyone was able to evacuate in time, the level of property destruction caused by these fires is unprecedented.
A substantial part of the Pacific Palisades was completely leveled—including my own childhood home and the entire neighborhood I grew up in. More than twelve thousand buildings were razed to the ground. While that figure includes several mansions owned by the Hollywood elite, the fires also wiped out homes that had been bought by middle-class Californians decades before the property values swelled to their current levels. For many of those folks, the bulk of their wealth was tied up in houses that are now gone.
Making matters worse, many of the homes destroyed last week were uninsured. Progressives and establishment media outlets seized on this fact to blame climate change for driving insurance providers out of high-risk areas.
This talking point is complete nonsense. If the risk of natural disasters in an area people want to live in increases, that’s good for insurance companies. It drives up the demand for their product. It’s true that home insurance providers have been fleeing the areas affected by these fires—with one provider canceling thousands of policies in the Pacific Palisades in the last year alone. But that’s not because of climate change, it’s because of government intervention.
In an unhampered insurance market, the prices people pay for coverage are very situational. Obviously the value of whatever is being covered will impact premiums, but so does risk. For natural disasters like floods and wildfires, the risk of a storm or blaze destroying a home can change drastically from one street to the next. Insurance providers invest a lot of time and resources into analyzing these risks so they can charge competitive prices that account for the likelihood of a claim being filed.
