FOX Business’ Cheryl Casson analyzes the potential economic impact of the Los Angeles wildfires as they continue to engulf local communities.
With Californians’ homes and iconic landmarks currently suffering damage from the raging Palisades Fire, state legislation to expand access to insurance across the Golden State may have come too late. .
Just before the new year, the California Department of Insurance announced it had reached the final stages of passing a Sustainable Insurance Strategy. Under the wording of the regulation, insurers will be required to expand coverage for high-risk wildfires. Support affected areas and limit costs passed on to customers.
However, as FOX Business’ Cheryl Casson reported, due to a 30-day review period, the bill was approved on Tuesday by five wildfires in Los Angeles: the Hearst Fire, the Eaton Fire, the Woodley Fire, the Palisades Fire, and the Tyler Fire. It was not enforced at the time the fire started. A county that includes the Pacific Palisades and Sylmar areas of Los Angeles and other areas near the city of Pasadena.
Officials told Fox News the fire was zero percent contained and more than 30,000 residents were under mandatory evacuation orders. Gov. Gavin Newsom also declared a state of emergency and warned that the worst winds were expected between 10 p.m. Tuesday and 5 a.m. Wednesday.
Watch live: Wildfire coverage on Fox Weather
“A lot of these residents don’t have home insurance, whether it’s renters insurance or homeowners insurance, for wildfire coverage,” Casone said on “FOX & Friends First.” After mentioning high insurance premiums due to increased destruction, he said: recent years.
Firefighters are called to action as a wildfire rages in Pacific Palisades, California, on Tuesday. (Getty Images)
“So, unfortunately, many of these people may not even be able to make up for their losses.”
The bill, led by Commissioner Ricardo Lara, would require insurers to insure at least 85% of their market share, increase the threshold by 5% annually, set cost caps and increase standard It specifically mandates establishing insurance costs and preventing “model shopping.” ”
Only five of California’s top 12 insurance companies are still writing new policies.
“Californians deserve a reliable insurance market that does not back away from the communities most vulnerable to wildfires and climate change,” Secretary Lara said in a Dec. 30 press release.
“This is a historic moment for California. My Sustainable Insurance Strategy focuses on addressing the challenges we face today and building resilient insurance markets for the future. “I’m guessing,” he continued. “Based on input from thousands of residents across California, this reform balances consumer protection with the need to strengthen markets against climate risks.”
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FOX Business’s Max Gaulden reports on the latest news that Allstate plans to increase home insurance premiums for California’s Varney & Co. by 34%.
The California Department of Insurance also notes that all other states except California allow reinsurance costs in their coverage rates, and a Department-led review in 2023 will allow reinsurance to expand coverage in high-risk climate areas. It has become clear that this is the most important strategy employed by companies to achieve this goal.
Seven of California’s 20 most destructive wildfires occurred in the past five years, according to a Department of Forestry and Fire Protection report. In terms of economic costs, the 2018 Camp Fire caused $10 billion in damage. The 2017 Tubbs Fire cost $8.7 billion. And the 2018 Woolsey Fire cost $4.2 billion.
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