SCOTT SIMON, HOST:
The wildfires continue in California. The Camp Fire is the deadliest and most destructive in the state's history. Two other major wildfires are also not yet under control. This is the third year in a row for severe wildfires in California.
Insurance companies are now on the hook for billions of dollars in claims. Reporter Jeff Tyler recently visited some claims adjusters who work in Thousand Oaks, Calif., close to the Woolsey Fire.
JEFF TYLER, BYLINE: Inside the big, white bus parked in a dirt lot, the air conditioning is on full-blast. The seats have been removed. Now it's like a giant cubicle where four claims adjusters work at two desks. Rob Howard is the chief claims officer with Farmers Insurance. He's part of the company's emergency response team.
ROB HOWARD: This is a very high-tech bus. It's a claims center on wheels.
TYLER: Customers stop by with policy questions or to start a claim. And some people under evacuation orders have not been able to return to their homes, so they come here to see if their house is still standing. Farmers paid for satellite photos of the area.
HOWARD: We have a customer outside right now that did not know the status of their home because they were not able to get access to the neighborhood.
TYLER: Howard shows me the satellite image on the computer screen.
HOWARD: Here, we can see on the flyover after the wildfire that the guest home in the rear looks to be OK, but the primary residence has been completely destroyed by the fire.
TYLER: This is a tough job, breaking bad news and helping people start the recovery process. The wildfires have many Californians wondering if a spike in rates is inevitable. Under California law, insurance companies have to justify any rate increase. Dave Jones is the California insurance commissioner.
DAVE JONES: We have actuaries and rate analysts who scrutinize the rate filing very carefully to make sure that the insurers have, in fact, justified the rate they're seeking. If they fail to justify it, then we have the authority to say no. And we do say no, and we will reduce the rate accordingly.
TYLER: And the system is set up to protect against a spike in rates after a disaster.
JONES: We don't allow the insurance company to take the entirety of the catastrophic loss and jam it into next year's rates.
TYLER: Instead, those catastrophic losses are averaged with other claims over the last 20 years. That results in smaller rate hikes spread out over the next couple of decades. Nonetheless, Jones says the trends are not good as insurers react to the massive losses from the wildfires.
JONES: They're raising prices, or they're deciding not to renew or write new insurance for some homes that face a high degree of fire risk.
TYLER: Insurers are not required to cover high-risk fire areas. But Janet Ruiz with the industry trade group Insurance Information Institute says homeowners can still find insurance from other carriers.
JANET RUIZ: They're called surplus lines carriers. They don't have to file with the state of California, so sometimes they are a bit more expensive. But it is good insurance that is available in some of the higher risk areas.
TYLER: Insurers offering these policies can, and do, charge more because they are not limited by the same regulations. Higher rates in high-risk areas are changing how people shop for homes. The insurance companies now give individual houses a fire safety rating.
Nancy Kincaid is the spokesperson for the California Department of Insurance. She recently moved from her house in the foothills outside Sacramento to a new place.
NANCY KINCAID: The home we ended up with is still in the foothills, but it's in a lower risk zone. My insurance is half what it was.
TYLER: Her office recommends that people check the insurance rates before buying a home, or risk getting stuck with an expensive policy that they can't afford. For NPR News, I'm Jeff Tyler in Thousand Oaks, Calif. Transcript provided by NPR, Copyright NPR.