California homeowners know that climate change is very real — real enough that major insurers are exiting the state because of the growing risk of wildfires.

“For many Californians, this is an insurance emergency,” state Insurance Commissioner Ricardo Lara told legislators this week.

He should know. When he campaigned for the commissioner gig, Lara was vocal about the risk of climate change.

Insurers got the message. Allstate, State Farm and Farmers Insurance promptly tried to raise rates and cut back on coverage.

When Lara put the kibosh on rate hikes, the three big insurers either stopped or limited their coverage of California homes.

Now the insurance commissioner is facing the unenviable task of trying to lure insurers back.

As the Wall Street Journal tells it, Lara’s plan “would require insurers to write a number of policies in ‘distressed’ fire-prone areas. In return, insurers would get much of their wish list, including a promise of faster decisions on rate requests.”

It’s a tough call. Yes, California needs to protect its housing sector and needs to protect families by making sure they’re sufficiently covered in case of calamity.

But to get there, Lara may have to agree to rate increases of as much as 40%.

While the greater risk to insurers is undeniable, the problem also reflects a business model that wasn’t designed to accommodate disaster-movie environmental troubles.

Simply put, insurers were unprepared for reasonably pricing coverage that acknowledges a higher risk of wildfires and other potential disasters.

So their response has been to either overcompensate and seek massive rate hikes or to take their ball and go home.

For homeowners, it’s a terrible situation.

“This is a no-win situation — it’s a question of what Lara is willing to settle for,” Ellen Carney, an insurance analyst at Forrester Research, told the Journal. “I would hate to be a state regulator.”

Higher premiums seem inevitable. How high is now the big question.