According to ICEYE, the fires have burned more than 30,000 acres and destroyed more than 10,000 buildings. (Photo: Amanda Bronstad/ALM)
The Los Angeles wildfires are spurring action among California lawmakers and insurance leaders.
Late last week, California Insurance Commissioner Ricardo Lara issued a one-year moratorium on insurance companies canceling or non-renewing residential policies in zip codes impacted by the current wildfires. He also issued an order to protect those in the wildfire zones who had received a non-renewal notice in the 90 days before the fires started.
“If you’ve received a non-renewal from your homeowners’ insurance between October 9 and January 7, your insurance company should do the right thing and retain you as a valued policyholder,” Lara said in a press briefing.
Lara also outlined plans for a possible future grant program to help homeowners reduce their wildfire risks. The program would provide financial assistance to low-income residents to install fire-resistant roofs and create defensible space around their properties.
“We need to put money in people’s hands,” Lara said at the briefing. “This measure is critical for protecting homes and improving long-term resilience against wildfire risks.”
Last week, state lawmakers also proposed the FAIR Plan Stabilization Act, which would allow the California Infrastructure and Economic Development Bank to issue catastrophe bonds to support the FAIR Plan in case of a liquidity shortfall.
Speaker of the Assembly Robert Rivas said there are also plans to advance legislation that would expedite insurance claims for homeowners impacted by the wildfires.
On Monday, financial analysts at Wells Fargo Securities said their “base case” estimate for insured losses from the wildfires was $30 billion. About 85% of those losses are expected to come from homeowners’ insurance policies, while 13.5% are commercial property and 1.5% are personal auto losses, according to the analysis. Average property values range around $3 million in the areas affected by the fires, the report said.
According to satellite monitoring from ICEYE, as of Monday morning, the Palisades Fire had burned more than 23,000 acres and destroyed around 4,500 buildings. The Eaton Fire had burned more than 14,000 acres, with about 6,400 buildings destroyed.
In an interview on CNN Saturday afternoon, Sean Kevelighan, CEO of Triple-I, said the industry is well-capitalized and able to pay for recovery.
“There is enough capital on hand,” he said. “All of the claims that are out there will be covered, whether through private insurers or the California FAIR plan. The (insurance) industry is designed to make sure that promises are kept.”
He said the fires could serve as a catalyst for resolving the insurance crisis in the state.
“The big wake-up call here, and it takes a very large catastrophic event to do this, is we need to understand how the state of California is going to prepare itself and become more resilient,” he said. “Because how we’ve been living, how we’ve been even having an insurance market in this state in many ways needs to change.”
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