LA wildfires: Is insurance the next battlefront for California residents?
Before the Los Angeles wildfires, insurers such as State Farm started to pull out of fire-prone California.
As wildfires continue to ravage California’s Los Angeles County, attention is now turning to how tens of thousands of people directly affected by the devastation might recoup what they’ve lost – and a potential insurance storm that awaits them.
Thousands of properties have been damaged or destroyed and owners are uncertain whether insurance will cover for them. The ongoing fires could become the most expensive in terms of insured losses in California history, with analysts estimating that losses could approach $20bn.
Here’s what you need to know.
How much damage have the wildfires caused so far?
At least 27 people have been killed in the wildfires.
The wildfires, the first of which broke out in the Pacific Palisades, have engulfed 9,596 hectares (23,713 acres) of land, according to the California Department of Forestry and Fire Protection (Cal Fire). More than 12,300 homes and structures have been destroyed.
Is the climate crisis an insurance crisis?
Wildfires are among environmental disasters that intensify as a changing climate looms over the planet.
A report by the US Environmental Protection Agency (EPA) says climate change has contributed to an increase in the frequency, season length and burned area of wildfires. While wildfires in California were previously limited to a span of a specific few months, the state’s Governor Gavin Newsom recently spoke of how there is no longer a fire “season” in California.
“It’s year-round in the state of California,” Newsom said in a video posted to his X account on January 8.