California wildfires unveil insurance fallout

BISMARCK, N.D. (KFYR) – The current California wildfires are on pace to be one of, if not the most expensive natural disaster in United States history with damage estimates totaling around $150 billion.

Bạn đang xem: California wildfires unveil insurance fallout

Rising inflation, the increased frequency of natural catastrophes and California’s decades-old insurance policies are forcing insurers to make difficult decisions.

Seven of California’s top 12 insurers cut coverage over the past four years.

Xem thêm : Consumer connection: What is insurance fraud? | News, Sports, Jobs

According to the Insurance Journal, last July, State Farm chose not to renew 30,000 property policies citing the increased risk of wildfires, inflation and insurance regulations that prevented them from adjusting rates in areas where the risk is highest.

“The battle is, each state regulates their own insurance. And, the state regulators will feel like it’s their duty to protect the consumers from the rising cost of insurance. But the other side of that coin is, you could have insurance companies just say, well, if we can’t get the pricing we need to be profitable, then we have to leave your market,” said Kramer Agency Representative Justin Thomas.

The risk of this insurance battle leaves many home and property owners without fire insurance or looking for state-sponsored options like California’s FAIR plan that have higher premiums and less coverage.

The FAIR plan was supposed to be a last resort option, but due to the state’s insurance fallout, homeowner policies have gone up 61% from one year ago. This is what insurance companies are saying they have to do to remain in business.

Xem thêm : Suspect Charged With Killing Insurance Company’s CEO as an Act of Terrorism | News, Sports, Jobs

Premiums have also been rising in North Dakota.

“If we have one of our populated areas hit by hail, like Bismarck’s experienced over half a dozen times in the last nine years, that can also be very costly. And that’s where people see locally insurance rates rising,” said Thomas.

But even with rising premiums across the country, North Dakotans shouldn’t be too worried that their premiums will increase to unsustainable amounts, thanks to regulations that provide a robust insurance marketplace.

A competitive insurance market and the ability of insurers to match the price of premiums to risk across the state provides North Dakotans many options if the wildfires end up affecting the cost of their premiums.

Copyright 2025 KFYR. All rights reserved.