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Farmers Insurance Projects $600 Million Loss from California Wildfires

The insurer's losses, partially offset by reinsurance, exclude an expected contribution to the FAIR Plan, as wildfire claims across the state reach historic levels.

Overview

  • Farmers Insurance estimates a $600 million loss from the Los Angeles wildfires, accounting for reinsurance payments but excluding FAIR Plan contributions.
  • The FAIR Plan, California's insurer of last resort, requires nearly $1 billion to cover claims, with assessments expected from licensed carriers like Farmers.
  • The wildfires are projected to be the most expensive in U.S. history, with total insurance claims potentially reaching $45 billion.
  • Farmers recently committed to expanding coverage in California, citing regulatory reforms allowing insurers to pass reinsurance costs to policyholders.
  • Other major insurers, including State Farm, Allstate, and Mercury, have announced substantial losses, with some seeking rate increases or reducing coverage options in the state.