USAA projects $1.8bn in California wildfire losses

By Isha Marathe

Feb 5 - (The Insurer) - USAA has already made $1bn in payments to its members from January's Los Angeles wildfires, with the military community insurer projecting it will pay out a total of $1.8bn.

USAA said that 86 percent of its wildfire claims have received initial payments, "and we have put more than $1bn in the hands of our members".

It added: "With over 3,500 claims received, USAA is dedicated to delivering swift assistance and is financially positioned to payout our members' projected $1.8bn in wildfire losses."

To expedite and streamline payments, USAA activated its Wildfire Response Program, which auto-enrolls eligible members in at-risk areas at no additional cost and offers wildfire response services like property damage assessments and the application of fire retardants.

USAA also offers access to Fema assistance, emergency shelters, financial relief programs, access to a network of professionals for home and auto repairs, and streamlined claim processing and advance payments have been activated to cover immediate needs such as temporary housing, food, and essential supplies.

“USAA is deeply committed to supporting our members during this challenging time,” said Randy Termeer, USAA property and casualty president.

“We understand the significant impact these wildfires have on our members and their families, and by moving quickly to put money in our members’ hands, they are empowered to take the first steps towards rebuilding their lives. Our team is working tirelessly to ensure that our members receive the assistance they need to recover and rebuild.”

Early in January, at the peak of the devastating Los Angeles wildfires, USAA president and CEO Wayne Peacock expressed concerns about the viability of California's insurer of last resort, the Fair Plan, The Insurer reported.

Peacock – who will be succeeded by former Everest CEO Juan Andrade in April – said that USAA would have to increase rates in the state to cope.

“We don't make money in the homeowners business in California, and we're working really hard to trim in every way possible... but if you can't get adequate rate to cover the risk, that creates a challenge that's untenable in the long run,” he said.

He added: "The bigger issue here is getting California to an insurance market that is healthy and reasonable, so that we can take care of customers, members for us in California continue to make us an appropriate profit, so that we can stay in business and provide what is an extremely valuable service to everyone in America."

State Farm General this week said it is seeking a 22 percent rate hike in California as a direct result of the latest bout of wildfires, after receiving 8,700 claims and paying over $1bn in claims to customers, The Insurer reported on Tuesday.