Blazes scorch 29,000 acres in Los Angeles; insurers face US$20bn bill as wildfires remain uncontrolled
California has enacted a one-year moratorium on insurance cancellations and non-renewals for residential property policies in Los Angeles neighbourhoods affected by the Palisades and Eaton fires, as well as adjoining ZIP codes.
According to BNN Bloomberg, Insurance Commissioner Ricardo Lara announced the measure on Thursday to protect residents during the ongoing crisis
The moratorium applies to all residential policies active as of January 7, when Governor Gavin Newsom declared a state of emergency.
Lara stated, “Our top priority is protecting Californians during this crisis and helping us recover.”
He emphasized that the order is intended to prevent residents from facing the additional stress of finding new insurance during such a devastating event.
The California Department of Insurance may extend the moratorium to additional ZIP codes if wildfires spread further.
The fires have already claimed at least 10 lives and scorched over 29,000 acres. As of Friday morning, the blazes in Pacific Palisades and Pasadena remained largely uncontrolled.
Economic losses from the disaster are projected to reach between $135 billion and $150 billion, according to AccuWeather Inc.
This estimate includes uninsured damages and indirect impacts such as lost wages and supply-chain disruptions.
JPMorgan Chase & Co. analysts estimate that insurers could face payouts exceeding US$20bn, a figure that could rise if the devastation spreads further.
Analysts led by Jimmy Bhullar warned in a Thursday note to clients that total insured losses could increase further if the fires remain uncontrolled and the devastation spreads.
On Wednesday, they estimated insurance industry losses nearing US$10bn.
This estimate suggests that this week’s fires could surpass the 2018 Butte County Camp wildfire, which caused approximately US$10bn in insured losses and was previously the costliest wildfire event in California’s history.
