(Reuters) – California Insurance Commissioner Ricardo Lara has requested $1 billion in additional funds from the commission’s member insurers to shore up the state-backed FAIR Plan after wildfires ravaged swathes of land in and around Los Angeles last month.
Lara also directed those responsible for implementing the FAIR Plan – an insurance program designed to help property owners who cannot find private market coverage – to hire more staff and utilize all available funds, including reserves and reinsurance funds.
Two fires on either side of Los Angeles burned an area nearly the size of Washington, D.C., from January 7 until they were fully contained, killing 29 people and damaging or destroying more than 16,000 structures, officials have said.
As of February 9, the FAIR Plan has received around 3,469 claims for damage caused by the Palisades Fire and around 1,325 claims for damage in the Eaton Fire, its website showed. The program has paid out more than $914 million to policyholders.
“The FAIR Plan must pay claims just like any other insurance company,” Lara said in a statement on Tuesday.
The funding request is necessary for the FAIR Plan to continue meeting its obligations to Californians, the Department of Insurance said in the statement.
The funds request could exacerbate financial strain on insurers who have been hit hard by rising catastrophe claims following several wildfires and other natural disasters over the past couple of years.
Catastrophe risk modeling firm KCC last month estimated insured loss of about $28 billion from the Los Angeles wildfires, making them the costliest in U.S. history.
(Reporting by Kanjyik Ghosh in Bengaluru; Editing by Christopher Cushing)
Comments