Los Angeles fire victims may not have insurance to rebuild

Fortune

California’s wildfires are devastating the Los Angeles area, but insurance companies previously cut coverage in the state as a result of the increasing likelihood of paying billions in damages each year.

Transcript

00:00Those affected by the devastating wildfires in Los Angeles are also faced with another crisis.

00:05Insurance carriers have been fleeing the state of California in recent years,

00:08driven out by the increasingly costly weather events.

00:11Last year, State Farm, the state's largest insurer, announced it would drop coverage for 30,000 home insurance policies.

00:18That included about 70% of total policyholders in the Pacific Palisades neighborhood,

00:22which was hit particularly hard this week.

00:24And it's not the only company to do so.

00:27The CDI reports that 7 out of the 12 insurers with the biggest market shares have cut coverage in California since 2022.

00:34It's too soon to know the full cost of repair following fires in the L.A. area,

00:38which has already destroyed entire neighborhoods and killed at least 10.

00:41But as big insurers try to protect their profits from natural disasters,

00:45Southern California homeowners are left with inadequate or non-existent coverage.

00:49And with the ever-growing risks of climate change,

00:52it's only a matter of time until other states like Florida and Texas face similar events.

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