California’s Homeowners Insurer of Last Resort Went Bust. It Won’t Be Alone As Nation Follows Suit
This is far from just a California problem. The whole country is struggling to adequately price and prepare for the growing risk of natural disasters as the climate grows more chaotic.
Insurers frequently go bust in Florida and Louisiana, whose own last-resort providers have ballooned. Texas faces hurricanes, wildfires and the hailstorms that are also growing more destructive in Midwestern states.
Too many homes nationwide lack adequate protection from the growing risk of natural disasters.
Last week, surprising no one, California’s FAIR Plan said it didn’t have enough money to cover claims from the recent Los Angeles wildfires. The plan, which insures people who can’t obtain coverage from private insurers, has doubled in size in the past four years to cover more than 450,000 homes.
It faces possible exposure of $4 billion for the Palisades Fire and $775 million for the Eaton Fire but had just $700 million in cash when the fires began and a $900 million deductible on its $2.6 billion reinsurance policy. Running out of money was never a question of if for FAIR, but how quickly and by how much.
The inevitable result of a fracturing private insurance market will be the socialization of disaster losses, as seen in California, Florida and other places where FAIR plans must go begging.
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Remainder Of The Article: Definitive Resource Covering The Homeowner’s Insurance Market: https://dpl-surveillance-equipment.com/miscellaneous/definitive-resource-covering-the-homeowner-s-insurance-market/ 
