Farmers Insurance, the second largest home insurer of the state, said that it is expected to lose at least $ 600 million of the Los Angeles fires, a considerably smaller figure than some other large insurers have announced.
The company established in Los Angeles said that the figure includes payments of its reinsurance program, but no expected assessment of the fair plan, the home insurer of the state of the last resort, which is supported by the recognized California carriers and almost $ 1 billion needed has to pay his claims.
Farmers said that his “targeted approach to supervising their coverage portfolio in the state, a strong capital basis and an extensive reinsurance program” are losses, including the individual Farmers Insurance Exchange, fire insurance exchange and truck insurance exchange companies.
Read more: La Wildfires increases the pressure on the insurance commissioner of California for tires in the industry
Like other carriers in recent years, farmers had withdrawn from the State’s home insurance market, which limits the number of policies that it would spend. But in December it announced that it would write more house insurance policies and accept new customers who are looking for apartments, tenants and other coverage of real estate.
It mentioned improvements in the market and legal reforms that came into force this year. They include allowing insurers to charge their Californian policy holders for the costs of reinsurance, which are taken over from other insurers to limit potential damage costs after a catastrophic event such as the LA County fires.
The Blazes is expected to be the most expensive forest fires in the history of the country, whereby insurers may pay no less than $ 45 billion in claims. Ratings Agency S&P Global expects it to increase real estate insurance rates or reduce coverage options in the state.
State Farm, the largest home insurer in California, has not announced his losses. However, S&P Capital IQ estimates that they will amount to a total of $ 6.5 billion before reinsurance payments. De Bloomington, ill.-Based insurer is looking for an emergency increase of 22%, but was rejected by state security commissioner Ricardo Lara, unless the company can provide additional information to support its request.
Read more: Insurance Commissioner rejects the request of the State Farm at 22% emergency increases
Other insurers who have announced losses are Allstate at $ 1.1 billion, Chubb for $ 1.5 billion and travelers at $ 1.7 billion, a figure that includes the estimated assessment of the fair plan.
Mercury Insurance, also based in Los Angeles, said that the gross losses could be up to $ 2 billion, but after reinsurance and possible recovery from Edison in South California, if the utility is held liable because it has fueled the Eaton Fire .
