"Companies started pulling back from the state as earlier fires made it harder to turn a profit. Experts warn the exodus could grow."
"It’s too soon to know the financial cost of the wildfires burning around Los Angeles. But the toll on California’s troubled insurance market could be enormous.
The fires struck just as California officials have been working to stop insurance companies from fleeing their state. That exodus, driven by rising losses from wildfires that have grown larger and more frequent, could accelerate because of this week’s fires, experts said.
“The California insurance market has been balanced on a knife edge,” said Nancy Watkins, an insurance expert and principal actuary at Milliman, a consulting firm. As homeowners begin filing claims, insurers that cover large numbers of dwellings in Southern California could see a drain on their financial reserves, forcing them to drop customers, be punished by investors or exit the state.
If insurers keep leaving California, it would drive up insurance rates that are already elevated and make coverage harder to find, said Sridhar Manyem, senior director for industry research and analytics at AM Best, a company that rates the financial strength of insurers."
Christopher Flavelle reports for the New York Times January 8, 2025.
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