As wildfires destroy homes in Los Angeles, some homeowners might face rebuilding without insurance payouts. This is a consequence of insurers curtailing their business in California.
When insurance companies face higher losses or payouts, they typically respond in two ways: raise premium prices and stop renewing policies or writing new policies.
State Farm said it would no longer accept new homeowners' insurance applications in California, ending coverage for 72,000 homes due to increased risks from catastrophes.
A new rule set for 2025 will require home insurers to provide coverage in fire-prone areas, indicating a shift in regulatory expectations toward insurers.
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