Insurers have paid out $6.9bn to SoCal consumers in wildfire claims

By Isha Marathe

Feb 14 - (The Insurer) - Insurers have so far disbursed $6.9bn to South California consumers affected by January wildfires through expedited and advanced payments, and $73mn for auto insurance claims related to the fires, according to data from insurance commissioner Ricardo Lara's claims tracker.

The advanced payments are intended to provide immediate relief to secure housing and replace personal belongings.

“With so much misinformation and speculation surrounding our insurance market after the Southern California wildfires, it is crucial for the public to track claims and monitor payouts. I want consumers to know that we are closely overseeing the entire claims process to ensure their protection,” Lara said.

“I expect insurance companies, including the Fair Plan, to continue providing essential advance payments to help survivors recover as quickly as possible.”

As of 5 February, 33,717 insurance claims were filed for home, business, living expenses, and other disaster-related needs.

Another 19,854 claims were partially paid under laws requiring advance payments to speed recovery as per Lara's January bulletin, which ordered insurance companies to provide advance funds for replacing personal property or contents in an amount that is 30 percent of the policy’s dwelling limit, up to $250,000, without requiring the policyholder to file an itemized claim and an advance payment of no less than four months of living expenses.

Currently, the bulk of unpaid claims include property damage and debris removal and are expected to be paid when people begin the process of rebuilding and debris removal, as per Lara's office.

On Wednesday, Lara approved the CA Fair Plan’s request for a $1bn assessment from its member companies to help pay consumer claims from the Southern California wildfires, The Insurer reported.

The move, which falls under Lara's Sustainable Insurance Strategy, finalised in 2024, is designed to expand regular insurance coverage in high-risk areas while reducing dependence on the Fair Plan.

On 10 February, the Fair Plan announced it had paid more than $700 million to policyholders from the Palisades and Eaton wildfires, moving it closer to the $900 million deductible on its reinsurance cover.

As of 4 February, the Fair Plan had received 3,485 claims for damage caused by the Palisades Fire and approximately 1,314 claims for damage caused by the Eaton Fire.

The total loss figure is expected to increase with the Fair Plan having a total potential exposure of more than $4bn for the Palisades Fire and $775mn for the Eaton Fire, according to California Department of Forestry and Fire Protection incident maps.