California Wildfires to Cost Insurers Up to $45 Billion

Major insurers report billions in payouts, with rate hikes and policy restrictions likely for homeowners across the state.

Allstate projects $1.1 billion in claims from Southern California wildfires, reflecting its reduced presence in the state's homeowners market.
Total insured losses from the fires are estimated between $35 billion and $45 billion, making it one of the costliest natural disasters in U.S. history.
State Farm, California's largest insurer, has already paid over $1 billion in claims and is seeking a 22% emergency rate hike to stabilize its finances.
Insurers are increasingly withdrawing from fire-prone areas, leaving many homeowners reliant on the state's FAIR Plan, which offers limited coverage.
New regulations now allow insurers to include reinsurance costs and FAIR Plan assessments in their rate hike calculations, likely driving premiums higher.