Posted on 02/03/2025 7:35:05 PM PST by vespa300
Expected claims payments to Los Angeles County wildfire victims appear to have exceeded $900 million for the state’s insurer of the last resort, allowing it to tap into “reinsurance” payments from back-up providers.
In a statement released Thursday, Jan. 30, the California FAIR Plan reported receiving more than 4,400 claims from victims of the Palisades and Eaton fires in the past three weeks.
“The FAIR Plan is accessing reinsurance to help pay claims,” the statement said.
(Excerpt) Read more at dailynews.com ...
Those who didn’t leave when they could will soon find themselves trapped between a rock and a hard place when the effects of all this are realized.
So who wrote their reinsurance? It’s nice that they have it, I’m sure the reinsurance provider can pay pretty easily.
All of the private insurance companies who still offer policies in California are required to underwrite the reinsurance liabilities. That was a part of the law that created the California FAIR Plan.
It’s nice that they have it, I’m sure the reinsurance provider can pay pretty easily.
There is no sound actuarial basis on which these claims have been funded. "There isn't enough money collected to pay them".
Some of the private insurance companies will be insolvent from the resulting claims and their California divisions will go bankrupt. Others will simply raise their rates for policy holders outside of California in order to make up the losses from the reinsurance claims.
This mess will get tied up in courts for many years. The lawyers will get more from it than the homeowners.
If I were an insurer doing business in California, I would be finalizing my exit strategy right about now.
I know State Farm has said it’s California subsidiary will go bankrupt unless the State approves substantial rate hikes effective May 1.
Just a humble guess....2025 is the last year that insurance companies operate for home-coverage in Cali. By August, most all will send out the note...life insurance and car insurance will be the only things they offer.
Now...how mortgages situations will work after that? Unknown. Most probably will clamp down and cease all home loans until the state resolves this.
Ahhh...who knew that life at Camelot would be be so complicated.
Q: Who pays for the reinsurance coverage, hmmmm?
What a racket.
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