FOX Business' Cheryl Cazon breaks down the potential economic impact of the Los Angeles wildfires as flames continue to engulf local communities.
California residents' homes and iconic landmarks are now at risk from the Palisades fire, and state legislation to expand access to insurance across the Golden State may be too late.
Just before the New Year, the California Department of Insurance announced that it had reached the final step in adopting a “Sustainable Insurance Strategy,” which it said The text of the regulations, It requires insurance companies to increase coverage in high-risk and fire-damaged areas and limit costs imposed on customers.
But because of a 30-day review period, as FOX Business' Cheryl Cazon reported, the rule was put on hold until five wildfires — the Hearst, Eaton, Woodley, Palisades and Tyler fires — started in Los Angeles on Tuesday. They set it on fire, it was not implemented. county, including the Pacific Palisades and Sylmar neighborhoods in Los Angeles and another near the city of Pasadena.
Zero percent of fires have been contained officials told Fox NewsWhile more than 30,000 residents are under mandatory evacuation orders. Gov. Gavin Newsom also declared a state of emergency, warning that the worst winds are expected between 10 p.m. Tuesday and 5 a.m. Wednesday.
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“Many of these residents have not been able to get insurance for their homes (for) fire coverage, either renters insurance or homeowner's insurance,” Cazon said. on “FOX & Friends First” After pointing out high insurance costs due to increased demolitions in recent years.
Firefighters run as a wildfire burns in Pacific Palisades, California, on Tuesday. (Getty Images)
“So many of these people, unfortunately, may not be able to cover their loss as well.”
Led by Commissioner Ricardo Lara, the law specifically requires insurance companies to underwrite at least 85 percent of their market share and raises that threshold by 5 percent each year, establishes cost caps, sets a standard insurance fee. and avoid buying the model. “
Of the top 12 insurance companies in California, only five are still writing new policies.
“Californians deserve a reliable insurance marketplace that doesn't back away from communities vulnerable to wildfires and climate change,” said Commissioner Lara. In a press release on December 30.
“This is a historic moment for California. My sustainable insurance strategy is focused on addressing the challenges we face today and building a resilient insurance market for the future,” he continued. With the participation of thousands of residents across California, these reforms strike a balance between consumer protection and the need to strengthen markets against climate risks.
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FOX Business' Max Gordon reports on the latest news that Allstate is set to raise California home insurance rates by 34% in “Varney & Co.”
The California Department of Insurance also notes that all states except California allow reinsurance costs in coverage rates, and a 2023 survey by the department found reinsurance as the best strategy used by companies. to expand coverage in high-risk climate areas.
Of the 20 most destructive wildfires in California, seven occurred in the past five years. Forestry and Fire Department reports In terms of economic cost, the 2018 Camp Fire caused a loss of $10 billion. The Tubbs fire cost $8.7 billion in 2017. And the Woolsey Fire cost $4.2 billion in 2018.