California fires: VP Harris called out over claim about insurance companies
Kaya Stanley, CEO of CRMBC and insurance industry expert, explains how there is no government surplus to cover the catastrophic economic losses associated with the Los Angeles wildfires.
The insurance industry is pushing back Vice President Kamala Harris have suggested insurance companies cancel policies for victims of the California wildfires, calling her lawsuit “false, erroneous and dangerous.”
During a press conference about the ongoing wildfires on Thursday, Harris said: “Many insurance companies have canceled coverage for many families that have been affected and will be affected, which will only delay or put an additional burden on their abilities. restore”.
Vice President Kamala Harris spoke to the media on Thursday at the White House in Washington about the federal response to the Los Angeles wildfires. (Tasos Katopodis/Getty Images/Getty Images)
“I think it’s an important point that needs to be addressed,” he continued, “and hopefully there can be some way to address that because these families, a lot of them, wouldn’t have the resources otherwise. on the road to recovery, and many of them have lost everything.”
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David Sampson, president and CEO of the Property Casualty Insurance Association of America (APCIA), said: FOX Business:“It’s false, wrong, and dangerous to even suggest that insurers are abandoning their customers, and it’s especially troubling coming from a former elected official in the state of California who should know the law.”
He added: “Insurers are committed to protecting the safety of victims and providing prompt relief to their policyholders for covered losses.”
Smoke plumes from a wildfire in Pacific Palisades, California on Tuesday. (David Swanson/AFP via Getty Images/Getty Images)
Sampson noted that California law prohibits insurers from canceling a policy while it’s in effect, with very limited exceptions such as nonpayment of premiums or fraud.
“So to suggest that people with insurance coverage effective Jan. 7 are being canceled just to give people that impression and create that fear is, in my opinion, irresponsible.”
FOX Business has reached out to the White House for comment.
CALIFORNIA’S INSURANCE CRISIS.
Even before this week’s wildfires began, California was in the midst of an insurance crisis, with many residents unable to obtain homeowner’s insurance as several carriers limited their exposure in the state or pulled out entirely in recent years due to heavy losses and an inability to adequately raise premiums or assess risk due to California regulations.
Malibu resident Safia Hall reports on California’s catastrophic wildfires on Making Money.
State Farm, the state’s largest homeowner’s insurance carrier, announced last March that it would not renew about 72,000 home and condo policies this summer, citing inflation, regulatory costs and increased catastrophe risk, and had previously stopped accepting new applications in the state. :
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Several other leading insurers, including All State, Farmers and USAA, have also held back on new policies in California in recent years as part of a bid to limit their exposure to policies they say carry unnecessary risk given the , which state regulators have allowed to be charged to policyholders. Those decisions cited similar reasons for increased risk, higher repair costs, and higher reinsurance premiums.
While it is illegal insurance companies With California canceling policies before they expire, many homeowners without renewed policies have struggled to obtain or afford coverage as the number of carriers in the state continues to shrink.
Houses are burning in Pasadena, California on Tuesday due to high winds. (David McNew/Getty Images/Getty Images)
Because of that situation, many homes destroyed by the ongoing wildfires were not insured.
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In the wake of the recent wildfires in Southern California, some critics blamed the insurance companies for refusing to cover property in the state’s fire-prone areas.But Sampson says he has warned California regulators about the vulnerability of the state’s insurance market.
He explained. “Over the last almost decade, we’ve paid $1.09 in claims for every dollar we’ve collected in homeownership premiums, and that’s not sustainable.”
FOX Business’ Eric Revell contributed to this report.
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