Los Angeles Wildfires Update — Claims Payments, Damage Totals & Property Values

California Insurance Commissioner Ricardo Lara is warning insurers to pay upfront payments to claims filed by victims of the Los Angeles area wildfires. He notes that’s California law. It says once an emergency is declared, claimants are entitled to content reimbursement of up to 30% of the value of their home’s contents — $250,000 max — without proving inventory.

They are also entitled to at least four months living expenses.

Most policyholders with total losses have been given advances on their claims, and often more than the claimants are entitled to receive. However, based on feedback received from the Department of Insurance, Lara said some insurers aren’t obeying the consumer protection laws.

“My top priority in this moment is getting claims paid as quickly as possible so survivors can begin the process of rebuilding their lives. Policyholders need these advance funds to help cover the significant expenses related to relocating, childcare, transportation, and other basic needs,” Lara said. “Some insurance companies are going even further than the law demands, with some automatically paying full policy limits when a total loss has been determined. I commend them for stepping up for their policyholders, and urge others to follow suit so that all policyholders and these devastated communities can recover as quickly as possible.”

Lara also noted that these victims are entitled to rebuild or purchase property at a different location.

On another note, Moody’s RMS says insured property losses could hit $30 billion or more. The catastrophe modeler KCC thinks damages and losses will be $28 billion.

Verisk is predicting insured losses to be $28 billion to $35 billion or higher. Keefe Bruyette & Woods analysts peg losses much higher at $40 billion and CoreLogic thinks they’ll be as high as $45 billion.

S&P Global Ratings released a report saying there is another issue to look at as flames continue to engulf large parts of Los Angeles. The firm’s analyst, Patricia Kwan says at issue is home values dropping in high risk areas around the state.

“This will be problematic for a state that has already been experiencing muted population growth as many people leave for more tax-friendly affordable places to reside,” Kwan wrote in the S&P report.

The report — however — did have one positive. It noted California’s credit strength is excellent and S&P’s outlook for the state will remain stable.

“We believe that California’s extraordinarily strong economy and tax base will be resilient through this disaster,” the report stated. “We expect federal funds will cover a significant share of the cleanup and recovery costs, which will alleviate short-term expenditure pressure.”

Source link: California Department of Insurance — https://bit.ly/4hcFzLB

Source link: Claims Journal — https://bit.ly/3CeZ0V6

Source link: Insurance Business America — https://bit.ly/4hde5pj