Firefighters battle a blaze during rioting in the Watts district of Los Angeles on Aug. 14, 1965. A routine traffic stop blossomed into a protest with the help of a rumor and escalated into the deadliest and most destructive riot in Los Angeles at the time.

Today, most think of the California FAIR plan as a safeguard against wildfire risk. Few are aware that the state’s insurance provider of last resort was created as a Band-Aid response to a very different Los Angeles conflagration: the Watts uprising of 1965.

Sixty years later, as climate change triggers a new crisis for insurance markets, firms and policymakers can draw an important lesson from the program’s first decades, when it not only allowed the wounds of injustice to fester, but ultimately stood in the way of transformative change. By continuing to lean on insurance-based solutions to deep-seated societal problems, California has put itself on a path toward repeating the mistakes of the past.

The proximate spark for the Watts rebellion, which began on Aug. 11, 1965, was the violent arrest of a Black motorist. But the kindling for the six days of unrest had been laid by decades of racist policing and discrimination in housing, employment and education. Despite the tangible victories of the civil rights movement — the Voting Rights Act had been signed just a week earlier — white supremacy remained regnant in South Central L.A.

Advertisement

Article continues below this ad

As Watts burned, insurance adjusters beat the National Guard to the scene by a full day. Entering the still-smoldering Los Angeles neighborhood to gauge the insurable damages, these were capitalism’s first responders. After tallying the $40 million in losses, the industry sharply reduced the........

© San Francisco Chronicle