The cost of the devastation from the fires around Los Angeles cannot be overviewed at present. But much indicates that it will be the most expensive bill to date for a natural disaster in the USA.
Several people have died and the flames have leveled thousands of homes and properties to the ground.
Withdrawing
Many homeowners are also left without insurance. The fires have become increasingly frequent on the US West Coast, which has put pressure on many insurance companies and made it increasingly difficult for private individuals to insure their homes in recent years.
According to Bloomberg, seven of the twelve largest insurance companies in California have limited the possibility of taking out insurance and withdrawn from certain areas over the past two years. The recurring fires are pointed out as an explanation.
One of the largest companies in the state, State Farm, chose last year not to renew around 72,000 insurance contracts, reports the Los Angeles Times.
Ongoing Crisis
Those who do not have access to regular insurance can instead insure themselves through a system provided by the state called California Fair – an insurance with higher premiums and less comprehensive coverage than more traditional insurance. This type of insurance should also be seen as a last resort, but demand has skyrocketed in recent years, writes CNN.
Experts point out that there is a risk that insurance companies will continue to withdraw from California and that the ongoing insurance crisis will deepen further.
The fires will continue to have a long-term, negative effect on the state's insurance market, says Denise Rappmund at the American credit rating agency Moody's to the Los Angeles Times.
