ALBUQUERQUE, N.M. (AP) — Manuel and Marcy Silva combed through the charred rubble that used to be their home, searching for any salvageable bits in the wake of the largest wildfire in New Mexico history.

Manuel found two of his high school wrestling medals. Gone was the bedroom furniture Marcy’s grandpa built as a gift, her wedding dress and their children’s toys.

The family was only one payment away from owning their single-wide mobile home and like many other northern New Mexico residents whose homes were in the path of the flames, the Silvas were uninsured.

After scorching more than 530 square miles (1,373 square kilometers) of the Rocky Mountain foothills, the government-sparked wildfire is helping to shine a light on what New Mexico officials are calling a crisis — where insurance coverage for everything from homes to workers compensation comes at premiums that often make it unobtainable for many in the poverty-stricken state.

New Mexico officials are banking on a California insurer relocating to the state and selling policies to low-income and underserved areas. But the multimillion-dollar merger involving California Insurance Co. has been clouded by pay-to-play allegations and remains stalled in court.

On Thursday, a California judge stopped short of granting New Mexico’s request to intervene in the case but cleared the way for the state to weigh in on a proposed plan to resolve ongoing conservatorship proceedings.

Attorneys for New Mexico argued during the hearing that the need for more insurers has only intensified since the proceedings began more than three years ago. They pointed to businesses having a difficult time securing adequate workers compensation coverage.

New Mexico Attorney General Hector Balderas told The Associated Press that he’s concerned about families not being able to insure their homes as the risk of wildfire and post-fire flooding escalate amid climate change.

“I’m very concerned that moving forward these natural disasters are either going to raise premiums or we’re going to be in a deeper crisis like Florida, where insurance providers don’t want to come to New Mexico because it’s a very challenging market to insure,” he said.

Wildfires have burned about 11,000 square miles (28,490 square kilometers) across the U.S. so far this year, slightly outpacing the 10-year average. The season started early in New Mexico when the U.S. Forest Service failed to take into account the ongoing drought and measures meant to lessen the fire danger were whipped out of control by strong winds.

The federal government agreed to funnel $2.5 billion in recovery funds to New Mexico in what members of the state’s congressional delegation described as a “down payment” on what would be a decadeslong recovery.

While the relief money has been celebrated by New Mexico officials, residents in remote villages scattered throughout the mountains say they have had a difficult time filing claims with federal emergency managers and that there’s no system for quickly getting families the help they need.

Mike Maes has armored his home with sandbags and a ladder is nearby so he and his family can escape to the roof in case of more post-fire flooding.

“I’m not the type of person to go beg for help or go cry for this, that and the other but I’m tired,” he said, lamenting that he has been forced to take time away from his barbershop business to clean up debris and truck in water for flushing toilets and taking showers now that the well on his property has been ruined.

He tried to get insurance years ago but it would have cost more than what he could have insured his property for.

The Silvas said the cost of insuring a single-wide mobile home manufactured in the 1970s was insurmountable. And the home used a wood-burning stove for heat — like many homes in rural New Mexico.

Marcy Silva works in information technology at New Mexico Highlands, and Manuel is employed by the San Miguel County Public Works Department. They would have opted for insurance if it was affordable.

For now, they and their two young children are living with Manuel’s parents. They hope to buy another mobile home, but acknowledged that the historic pace of inflation isn’t helping and there’s more work to do to restore their property.

“The best way that I can explain it is that it’s been like a never-ending nightmare that just seems to be getting worse and worse,” Manuel said.

California Insurance Co. officials have given assurances to Gov. Michelle Lujan Grisham and state insurance regulators that they would fill the policy gap in New Mexico.

Consumer Watchdog, a Los Angeles-based progressive advocacy group, said New Mexico regulators should be cautious about letting CIC operate in the state. The group sued California regulators in 2020 for emails and other communications after reports surfaced that California Insurance Commissioner Ricardo Lara accepted political donations from insurers, despite promising during his 2018 campaign not to do so.

Lara at the time apologized for accepting political contributions from people associated with Applied Underwriters — CIC’s parent company — and other insurers. He returned more than $80,000 to insurers and other donors with business before state regulators.

Those associated with Applied Underwriters included lobbyist Eric Serna, who retired in 2006 as New Mexico’s insurance superintendent after state officials suspended him over conflict-of-interest issues.

Lara came under scrutiny again this year when Consumer Watchdog voiced new concerns about a series of transactions involving insurance industry donations and independent groups working to support his reelection.

Jerry Flanagan, the consumer group’s litigation director, said the situation facing California and New Mexico homeowners when it comes to wildfire is heartbreaking. Statistics compiled by the insurance industry show about 15% of properties in the two states are at risk of wildfire. Only Montana, Idaho and Colorado have higher percentages.

“Unfortunately, what insurance companies want from political officials is usually bad for consumers,” Flanagan said. “So it’s kind of like an out of the frying pan into the fire situation for New Mexico consumers because you need some coverage but the history with California Insurance Co. is that they can’t be trusted.”

The company disputes the allegations, calling them unfounded and saying that every insurance company in California engages in some form of lobbying.

Jeffrey Silver, the company’s general counsel, wrote in an email that CIC has provided coverage across California and that the number of complaints from policyholders and claimants for years has been in the single digits compared to the tens of thousands of policies issued and millions of people covered.

Silver said it’s time California releases its “stranglehold” and clears the way for the company to do business in New Mexico, where he said it still would be subject to regulatory oversight and periodic reviews.

Balderas, a Democrat who will finish his last term at the end of the year, said what appeals to him is that CIC would be moving its executives and capital to New Mexico once the conservatorship is resolved and would be subject to state regulation and taxation.

“I believe you can hold a company more accountable if they’re headquartered and provide services in the state,” he said.

Attorneys are hoping for a resolution next year, but that leaves people like Maes at a difficult impasse.

Describing life without basic utilities and the potential for devastation that comes with each rain storm, Maes took a long pause, trying not to get choked up. He said he and his neighbors are tucked away and forgotten and that it’s been hard to cope with all the devastation.

“It’s just an ongoing thing over and over again,” he said. “I don’t see light at the end of the tunnel, but there is hope.”

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This version corrects the spelling of Mike Maes, instead of Maese.