CA Fires and Insurance

Once again, a very predictable disaster is ongoing in California. Wildfires in an urban area fed by very dry fuels and high winds. Multiple fires burning in different areas from hillsides all the way down to the Pacific Ocean. All of this was forecasted a couple of days ago. See my previous blog post one weather system-two storms

We have seen the same situation before with clogged roads full of evacuees and limited access into and out of neighborhoods. Traffic all works fine on an average day, but not when everyone has been told to “get out of Dodge now!”  

The one new thing I’ve see for the first time is a firefighting bulldozer dozing abandoned “functional” vehicles off the road to make it possible for first responders to get to the fires. The video I saw included an Audi A5 getting shoved up into another car and pushed out of the way. Reference the bulldozer doing its thing, I’m wondering what the Risk Manager for that agency is thinking right now.  Who is liable for the damages incurred?

Which then leads to the critical topic of property insurance. Given the scope of these fires, which as I write this are still burning, the property loss in homes will be in the hundreds of millions of dollars. This is only going to fuel two actions. An increase in insurance rates for properties in wildfire areas across the nation and the dropping of homeowner insurance by companies looking to limit their liabilities for such losses. Additionally, it is not unimaginable that a company or two will withdraw completely from areas of the nation with wildfire threats, much as we have seen happen in Florida for hurricanes and California already for earthquake risks.

The crisis in home insurance is building one disaster at a time!