Insurance Losses For California Wildfires Could Be Largest Ever
While insurers are still calculating the damage of the deadly wildfires in California, some experts warn it could be the costliest wildfire in U.S. history. Losses so far have already exceeded the $1 Billion mark and will only grow as more claims come in. Property damage makes up the largest component of the cost but figures for automobile and casualty insurance will also be extensive.
The Insurance Information Network of California has estimated that 14,000 claims have been filed so far. While some analysts had predicted that some companies may follow Allstate’s lead and leave the region entirely, IINC Executive Director Candysse Miller in the article says, “It’s important for consumers to know that their insurance policies will not be cancelled due to a firestorm claim.”
The article also states, “California law prohibits insurers from canceling a policy prior to reconstruction, and insurers must also offer to renew the policy immediately following a disaster. State law also requires additional living expense coverage be provided for 24 months following a declared state of emergency such as the recent firestorms.”
While the financial cost from this disaster are substantial, industry experts state that it has been a below average year for insured losses from catastrophes and say that losses have already been factored into the premiums. By contrast estimated insured losses for Hurricane Katrina topped $41 Billion, so many believe that the wildfires will have little impact on the financial solvency for the insurers in the region.
State regulators have also warned that they will be carefully monitoring the insurance companies to make sure they live up to their end of the bargain. Lately the industry has gotten a bad reputation for offering low ball settlements for claims and for using delaying tactics to force people to accept their initial offers.
