Swirling like embers are concerns many people who lost their home in the Los Angeleswildfires this week also lost insurance coverage, as their policy was canceled or non-renewed in recent months.
As massive wildfires continue in Los Angeles, California, insurance companies canceling coverage to thousands of homes and businesses in the state is spurring debate and drawing criticism.
“Sadly many insurance companies have canceled insurance for a lot of families who have been affected and will be affected which is only going to delay or place an added burden on their ability to recover and I think that is an important point that must be raised,” Vice President Kamala Harris said on Thursday.
The devastating fires have torn through multiple Los Angeles area communities, burning thousands of homes and stoking fears of a death toll that is likely to rise.
Insurance companies like Allstate and Farmers have reportedly not renewed insurance policies in California, leaving more and more homeowners to turn to the Fair Access to Insurance Requirements Plan (FAIR), with approximately 1,400 of the town’s 9,000 homes covered by the plan in 2024 – over four times the number in 2020, according to insurer data. That compares to about one in seven homeowners previously, according to CBS News.
It was revealed that last year State Farm insurance canceled the policies of 72,000 customers in order to ensure its “long-term sustainability.”
Economic losses from the disaster are projected to reach nearly $50 billion, with insured losses surpassing $20 billion – a figure that could rise if the fires are not brought under control, according to JPMorgan analyst Jimmy Bhullar, as reported by The Wall Street Journal.
State Farm, one of the biggest insurers in California, canceled hundreds of homeowners’ policies last summer in Pacific Palisades—the same area which is now being ravaged by a devastating wildfire.
The move was justified by the company as an attempt to avoid “financial failure” as the frequency and severity of wildfires is growing in the Golden State, especially in at-risk zones. But as the multiple fires currently burning through Southern California threaten to cause devastating losses for residents, many will likely need to rely on their insurers to get back on their feet after the blazes are contained.
“Our number one priority right now is the safety of our customers, agents and employees impacted by the fires and assisting our customers in the midst of this tragedy,” a spokesperson for State Farm said.
Peoplesmind
