Insurers face US$10bn in claims as California wildfires cause up to US$150bn in total economic damage
California has implemented a one-year mandatory moratorium preventing insurers from cancelling or refusing to renew residential property policies in Los Angeles neighbourhoods impacted by recent wildfires.
BNN Bloomberg reports that Insurance Commissioner Ricardo Lara issued an order extending to the ZIP codes of the Palisades and Eaton fires.
The order applies to all policies in force as of January 7, the day Governor Gavin Newsom declared a state of emergency.
In a statement, Lara emphasized that the moratorium aims to protect Californians from the added burden of securing new insurance during the crisis.
“Our top priority is protecting Californians during this crisis and helping us recover,” he said.
The California Department of Insurance indicated it may extend the moratorium to additional areas if the wildfires continue to spread.
As of Friday morning, fires in Pacific Palisades and Pasadena remained largely uncontrolled, with 29,000 acres burned and at least 10 fatalities reported.
Accuweather Inc. estimates total economic losses from the wildfires, including uninsured destruction, lost wages, and supply chain disruptions, will range between US$135bn and US$150bn.
Insurers are expected to face claims exceeding US$20bn, according to analysts at JPMorgan Chase & Co., though the figure could rise if the fires worsen.
