Insured losses from the Los Angeles wildfires are increasing, estimated between $8 billion and $20 billion.

[Chris]

Editor's note: This story has been revised with updated total loss estimates from AccuWeather. With aerial firefighting resuming as Southern California's high winds subsided, assessments of damage from several destructive fires in the Los Angeles area are expected...

Read the full story here...

 

[DonP]

I've seen $150 billion several times . I see were the difference is . Uninsured loses could be $100 billion . Many properties are uninsured because insurers dropped mass policys the last yr .

 

[Allen Trent]

I've seen $150 billion several times . I see were the difference is . Uninsured loses could be $100 billion . Many properties are uninsured because insurers dropped mass policys the last yr .

Wouldnt be surprised to see a lot of consumers looking to sue insurance agent for uninsured losses if policies were written below replacement cost. I sure hope agents used disclaimer documents to have signed acknowledging consumer was choosing to self insure portions to save premiums, etc

 

[marindependent]

My two cents - they have no idea yet.

Look at this "Damage Assessment Tool" on NBC news What you will note here -that there aree HUGE swaths of areas in the fire zone that they have not begun to count. In another report I read - FEMA said they think going through all of this will take 6 months - AFTER the fires are out.

 

[Markthebroker]

Honestly, I think there is a good chance the Ca P&C market will collapse, or the government will take over, which would probably be worse.

 

[Allen Trent]

Honestly, I think there is a good chance the Ca P&C market will collapse, or the government will take over, which would probably be worse.

I think you could be right. Unlike Florida where Citizens is state run or funded, isnt California FAIR plan 100% funded by insurance carriers? wont those carriers want to leave California even more than they wanted to already because of the losses & restrictions on charging adequate rates or underwriting & pricing the most high risk areas.

Couple hundred billion in losses cant be absorbed very easily without a government money printer

 

[marindependent]

I think you could be right. Unlike Florida where Citizens is state run or funded, isnt California FAIR plan 100% funded by insurance carriers? wont those carriers want to leave California even more than they wanted to already because of the losses & restrictions on charging adequate rates or underwriting & pricing the most high risk areas.

Couple hundred billion in losses cant be absorbed very easily without a government money printer

You have kind of hit the nail on the head here. Imagine yourself as an Insurer in California that has a small market share [25,000 policies] and a small amount of market in LA [say 5,000 to 10,000].

Now those 5,000 or 10,000 policies you have in LA:
1. You will likely have some total loss claims
2. You cannot raise the rates as you see fit on those exisiting policies
3. You cannot cancel policies in certain zip codes for 1 year or more
4. You might be on the hook for landslide risk due to the wildfires for homes not destroyed. [Source]
and...
5. You are a member, proportionally, of the CA FAIR plan for those 25,000 policies.

Lastly - AM Best is coming for your head.

 

[Allen Trent]

You have kind of hit the nail on the head here.

So, you are saying my nickname should be the hammer?

 

[marindependent]

So, you are saying my nickname should be the hammer?

Only if @Markthebroker becomes known as the "Nail"