California insurance companies are responding to wildfire damages by agreeing to pay at least 75% of contents coverage to affected homeowners without requiring detailed inventories. This comes after a request from the state's insurance regulator for companies to cover up to 100% without itemization. However, major insurers like State Farm declined this request, potentially affecting over 20% of the state's market. Critics express concern that without itemization, payments might exceed actual losses and impact future insurance prices for residents.
State Farm, which insures more homes in California than any other company, was among the companies that declined the request.
Advancing full policy limits with no inventory can lead to payments that exceed actual losses, raising the price of insurance for all California customers.
Though many victims will now get some relief, State Farm's refusal creates a significant challenge, as they account for 20 percent of the market.
Collectively, the companies that refused to pay without itemization insure over 39 percent of homes in California.
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