California Wildfires Threaten Insurers Already Teetering From Climate Shocks

The New York Times ^ | Jan. 8, 2025 | Christopher Flavelle

[E. Pluribus Unum]

Companies started pulling back from the state as earlier fires made it harder to turn a profit. Experts warn the exodus could grow.

It’s too soon to know the financial cost of the wildfires burning around Los Angeles. But the toll on California’s troubled insurance market could be enormous.

The fires struck just as California officials have been working to stop insurance companies from fleeing their state.

That exodus, driven by rising losses from wildfires that have grown larger and more frequent, could accelerate because of this week’s fires, experts said.

“The California insurance market has been balanced on a knife edge,” said Nancy Watkins, an insurance expert and principal actuary at Milliman, a consulting firm. As homeowners begin filing claims, insurers that cover large numbers of dwellings in Southern California could see a drain on their financial reserves, forcing them to drop customers, be punished by investors or exit the state.

If insurers keep leaving California, it would drive up insurance rates that are already elevated and make coverage harder to find, said Sridhar Manyem, senior director for industry research and analytics at AM Best, a company that rates the financial strength of insurers.

The Los Angeles fires pose another threat to California’s insurance industry, beyond the money those companies will have to pay directly to their customers.

In the areas hit by this week’s fires, many homes are insured through a state-backed system called the California FAIR Plan, designed to be a last resort for homeowners who cannot find insurance coverage on the private market. The plans are more expensive and provide less coverage than commercial versions.

The number of homes in the ZIP code affected by the Palisades fire that are enrolled in the FAIR Plan almost doubled between 2023 and 2024, said Tim Zawacki, an insurance sector strategist at S&P Global Market...

[E. Pluribus Unum]

Wildfires are a natural part of desert ecology.

"Climate change" has nothing to do with preventing fires that are a natural part of the ecology until the flammable biomass accumulates to catastrophic proportions.

[ifinnegan]

Climate did not cause the city of Los Angeles to neglect keeping fire hydrants functional.

It is the big lie and they will push it for their agenda.

[Paladin2]

Will State Farm raise house insurance in States far removed from the ‘Rat Utopia of Calif.?

[DIRTYSECRET]

Blame governments. The left won’t.

[dpetty121263]

No such thing as Global warming, it is Alchemy science.

[Wuli]

The insurers in California are teetering on the California insurance regulatory burden. That’s what they are teetering on. Insurers have pulled out of California because of its regulations, not “climate change”.

[Lurker]

https://www.frames.gov/catalog/23

Fire Regime Condition Class. It’s a fairly well understood thing.

L

[rktman]

OFFS! Climate shock? 🤔

[cgbg]

Agreed.

Btw the CA state budget may take a big hit on this—article quote:

“many homes are insured through a state-backed system called the California FAIR Plan”

[alstewartfan]

CLIMATE SHOCKS? Pabulum.

[OKSooner]

Jennifer Rubin is psychotic.

[E. Pluribus Unum]

No such thing as Global warming, it is Alchemy science.

Where is a batch of anti-phlogiston when you need it?

[Destroyer Sailor]

Building flammable buildings in an area that is subject to seasonal wildfires is asking for what you are currently seeing. When you do nothing to correct the brush it gets worse.

[SkyDancer]

On Breitbart news it’s been reported that an arsonist has been arrested. Any ties to terrorism?

[AZJeep]

Pretty much all fires are preventable.
Just clean the underbrush and make fire breaks.
Then have water ready.
Sierra Club should take responsibility and apologize.

[blackdog]

“Climate Shocks”.....That’s funny.

[cnsmom]

If you don’t rebuild with a concrete house it will be time to leave CA.

[P-Marlowe]

My homeowners insurance company left California. That confirmed my decision to move out of California, too.

This is going to bankrupt a lot of insurance companies. Most of the homes destroyed in these fires are multi million dollar mansions with probably millions of dollars worth of furniture , antiques, collectibles and artworks.

When the insurance companies go belly up, there is a fund that solvent insurers pay into and the State takes over the claims. The state is out of money so these homeowners are going to be homeless for a long time. They’ll be lucky to get 10 cents on the dollar.

This is LaHaina and Paradise on steroids. No insurance company is going to write policies in California after this.

[Rightwing Conspiratr1]

Yes because government spending caused inflation has raised the cost of housing close to 30% even in States far removed from CA and fires, like here in Ohio.

[xzins]

I wouldn’t wish this on anyone, not even those who voted for this nonsensical government.
Wonder if female will do more for them than they did for North Carolina.
Probably, but because President Trump takes over in 11 days.