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Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp012v23vx487
Title: 1 Cross, 2 Cross, Red Cross, Blue Cross: California Wildfire Adaptation and Insurance
Authors: Tseitlin, Misha
Advisors: Oppenheimer, Michael
Department: Princeton School of Public and International Affairs
Class Year: 2021
Abstract: Though often seen as a burden by Californians, wildfires are a historic occurrence in the state, central to the role of vital ecological processes. Recently, the combination of human habitation in the Wildland Urban Interface (WUI) and climate change—causing droughts, heightened winds, and higher temperatures—have engendered larger and more novel stand-replacing fires and threatened California residents. Thus, the state government has focused on provision of insurance, an economic lifeline in times of natural disaster. Though popular attitudes towards fire risk and its ecological role are mixed, citizens respond saliently to economic threats like property loss. However, recent years have documented a rising underinsurance crisis, both in presence and extent, attributed in part to rising fire risk. We seek to understand the trends between property insurance, wildfire, and socioeconomic demographic data to inform future policymaking by state insurance regulators and legislators. Using a time series formulation with ZIP and year fixed effects, we verified the trend between historic wildfire incidence and decreased insurance provision. Results identified both lagged and forward relationships between fire incidence and insurance coverage, suggesting protracted cancellations in response to past disaster and usage of future risk score to inform non-renewal decisions; land management risk mitigation strategies were underappreciated or counterproductive. Trends also indicated equity challenges stemming from differences in provider behaviour along the lines of race, age, income, population density, mortgage-holding, home energy source, and migration. A subsequent case study examining attitudes towards insurance among Oakland Hills residents allowed us to directly examine consumer responses by residents 30 years after the 1991 Tunnel Fire. Respondents indicated growing non-renewal justified by fire risk, rising premiums, decreasing availability, and increasing difficulty in navigating the market. We recommend state regulators create incentives for growing denser population clusters in affected WUI, while bolstering safe, clean infrastructure to minimize fire risk. Other recommendations include the need for comprehensive evaluation and pricing of wildfire mitigation strategies like prescribed burns, greater investments in fire education, and a resolution to socioeconomic disparities in FAIR Plan participation.
URI: http://arks.princeton.edu/ark:/88435/dsp012v23vx487
Type of Material: Princeton University Senior Theses
Language: en
Appears in Collections:Princeton School of Public and International Affairs, 1929-2024

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