The fires raging in the Palisades threaten not only one of L.A.’s wealthiest neighborhoods but also exacerbate a crippling homeowners insurance crisis, which has profoundly affected the insurance market.
The potential losses from the wildfires could approach $10 billion, with estimates predicting that uncontrolled fire spread could lead to losses of $30 billion overnight.
California’s insurance commissioner has implemented new policies allowing insurers to factor catastrophic risks into their pricing, which could shift more costs onto homeowners in crisis.
With previous disasters, insurers have faced claims and expenses that exceeded premiums collected, leading to drastic cutbacks in coverage. Allstate’s consideration to re-enter the market shows changes in this troubled landscape.
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