"Thousands of people's fire insurance get cancelled before LA fires how much of an effect did this put on people" --Paloma bastos 6th grade
What Is Going On In LA?
If you don’t know what has happened in LA, you must live under a rock. As most of us know, many people have suffered from the tragic fires in LA. A disaster like this would be unfortunate for most people. They might not have somewhere to stay for a while, but they might have fire insurance. The difference with the people in LA is that many got their insurance cancelled weeks before disaster struck.
LA TIMES stated in an article, “Before the fires burned more than 10,000 structures in Los Angeles County, insurers chose not to renew thousands of home insurance policies in Pacific Palisades, Altadena and other fire-prone areas.”
There are many questions about this tragedy. Why did State Farm drop thousands of people before the fires? Was this planned? How did this affect the lower- to middle-class folks? Many people are wondering what's next. Many have become homeless because they are uninsured.
Why Did Insurance Companies Drop Thousands From Fire Insurance?
State Farm and Allstate started cancelling home insurance policies in areas prone to fires. But why? State Farm has a portfolio of 250,000 homes in LA County. In July 2024, State Farm dropped 1,600 policies in the Palisades and more than 2,000 policies in other LA zip codes.
According to the California Department of Insurance, between 2020 and 2022, insurance companies refused to renew 2.8 million homeowner policies in the state, over half a million were in Los Angeles County.
Many fire victims reported that insurers had dropped their policies last year. In March, State Farm announced that it would not renew 30,000 homeowner and condominium policies, including 1,626 in Pacific Palisades.
An article by CBS says "since 2019, more than 100,000 Californians have lost their insurance, leaving homeowners, business owners, and families without insurance coverage because insurance companies are cancelling"
They aren't writing any new insurance, causing less and less being covered. People continue to pay higher prices for even less coverage In California, State Farm last year said it was discontinuing coverage for 72,000 houses and apartments in the state.
the CA FAIR Plan
These fires are likely to place added stress on the state's already fragile insurance market. But people are now transitioning to a new plan, the CA FAIR plan. Although the price isn’t “fair” the coverage is fair. Euronews said “insuring a home under FAIR is expensive. According to Bankrate, the average cost of a policy on the FAIR Plan is around $3,200, more than double that of a standard policy.”
CA FAIR reports that in September 2024, 1,430 homeowners in the Pacific Palisades zip code alone were covered by FAIR, 85%more than the previous year.
CA FAIR’s website states they are the fire insurance you should go to when traditional insurance companies don’t work out. Their slogan is “Can’t find fire insurance? The FAIR plan provides basic fire insurance coverage for high-risk properties when traditional insurance companies can not”
Is This Going To Change In The Future?
Now, after everything that has happened, will this change decisions in the future? Many people are going to CA FAIR because of its coverage, but for the POC neighbourhoods, most can’t afford the high insurance price or even rebuilding. The government is deducting money from GoFundMe pages with the word “RE-BUILD/RE-BUILDING.”
So remember, if you have extra money, even if it is a few cents, DONATE to GoFundMe, and fundraisers for the people who suffered from these awful fires and people who DON’T HAVE A HOME anymore, a basic human necessity.
If you don’t know what has happened in LA, you must live under a rock. As most of us know, many people have suffered from the tragic fires in LA. A disaster like this would be unfortunate for most people. They might not have somewhere to stay for a while, but they might have fire insurance. The difference with the people in LA is that many got their insurance cancelled weeks before disaster struck.
LA TIMES stated in an article, “Before the fires burned more than 10,000 structures in Los Angeles County, insurers chose not to renew thousands of home insurance policies in Pacific Palisades, Altadena and other fire-prone areas.”
There are many questions about this tragedy. Why did State Farm drop thousands of people before the fires? Was this planned? How did this affect the lower- to middle-class folks? Many people are wondering what's next. Many have become homeless because they are uninsured.
Why Did Insurance Companies Drop Thousands From Fire Insurance?
State Farm and Allstate started cancelling home insurance policies in areas prone to fires. But why? State Farm has a portfolio of 250,000 homes in LA County. In July 2024, State Farm dropped 1,600 policies in the Palisades and more than 2,000 policies in other LA zip codes.
According to the California Department of Insurance, between 2020 and 2022, insurance companies refused to renew 2.8 million homeowner policies in the state, over half a million were in Los Angeles County.
Many fire victims reported that insurers had dropped their policies last year. In March, State Farm announced that it would not renew 30,000 homeowner and condominium policies, including 1,626 in Pacific Palisades.
An article by CBS says "since 2019, more than 100,000 Californians have lost their insurance, leaving homeowners, business owners, and families without insurance coverage because insurance companies are cancelling"
They aren't writing any new insurance, causing less and less being covered. People continue to pay higher prices for even less coverage In California, State Farm last year said it was discontinuing coverage for 72,000 houses and apartments in the state.
the CA FAIR Plan
These fires are likely to place added stress on the state's already fragile insurance market. But people are now transitioning to a new plan, the CA FAIR plan. Although the price isn’t “fair” the coverage is fair. Euronews said “insuring a home under FAIR is expensive. According to Bankrate, the average cost of a policy on the FAIR Plan is around $3,200, more than double that of a standard policy.”
CA FAIR reports that in September 2024, 1,430 homeowners in the Pacific Palisades zip code alone were covered by FAIR, 85%more than the previous year.
CA FAIR’s website states they are the fire insurance you should go to when traditional insurance companies don’t work out. Their slogan is “Can’t find fire insurance? The FAIR plan provides basic fire insurance coverage for high-risk properties when traditional insurance companies can not”
Is This Going To Change In The Future?
Now, after everything that has happened, will this change decisions in the future? Many people are going to CA FAIR because of its coverage, but for the POC neighbourhoods, most can’t afford the high insurance price or even rebuilding. The government is deducting money from GoFundMe pages with the word “RE-BUILD/RE-BUILDING.”
So remember, if you have extra money, even if it is a few cents, DONATE to GoFundMe, and fundraisers for the people who suffered from these awful fires and people who DON’T HAVE A HOME anymore, a basic human necessity.
