Reporting from Altadena, California, construction worker Ivan De La Torre pondered the daunting task of rebuilding a neighborhood ravaged by wildfires. Concerns loomed over whether insurance companies would be able to cover the massive costs faced by hundreds of residents returning to find their homes reduced to ashes.
De La Torre, along with many others in Altadena, feared that their insurance policies might fall short in covering the expenses of reconstruction, leading to potentially exorbitant future premiums. The devastation left by the wildfires has left a sense of unease among residents, with worries that insurers could struggle to meet all the claims and even face bankruptcy.
Leo Frank III, an actor who lost his family home in the fires, expressed concerns that insurers may delay payments and not fully cover the rebuilding costs. Despite the challenges ahead, he remained determined to rebuild, stating emphatically, “We will rebuild. No one is taking our house.”
Some residents, like Frank, were fortunate to still have insurance coverage, as some insurers had pulled out of fire-prone regions in California prior to the wildfires. However, there were worries among those affected about potential delays in receiving payouts and uncertainties about the future of their coverage.
In response to the crisis, California Insurance Commissioner Ricardo Lara implemented a one-year moratorium on policy non-renewals and cancellations by insurance companies. Efforts were also being made to assist policyholders in making claims and navigating the insurance process through workshops and support services.
The wildfires, described as one of California’s worst natural disasters, have resulted in significant losses, with estimates suggesting insurance costs could exceed $20 billion. The total damage and economic impact were forecasted to be in the range of $135 billion to $150 billion, potentially leading to a surge in homeowners’ insurance premiums.
Altadena, located at the foot of the fire-prone San Gabriel Mountains, faced challenges in obtaining fire insurance due to its geographical risks. Many residents turned to the California FAIR Plan, a state-backed insurance program, when private insurers declined coverage in high-risk areas. The FAIR Plan has seen a rise in policyholders in Altadena as more homeowners sought alternative insurance options amid increasing wildfire threats.
While the road ahead may be challenging for Altadena and other affected communities, efforts were underway to provide support and guidance to residents grappling with the aftermath of the devastating wildfires.
Ravaged by wildfires this week, the escalation in the utilization of the FAIR plan has been notably pronounced. According to data from the insurer, there are now 1,430 residences encompassed by the plan, marking an 85% surge from the previous year and a quadrupling from the figure recorded in 2020.
Gabby Reyes, a resident of Altadena whose dwelling succumbed to flames on Wednesday morning, expressed gratitude for the assistance provided by FAIR Plan personnel. However, she voiced apprehension regarding the adequacy of her policy in financing the reconstruction of her residence, where she resides with her mother and daughter. The aftermath of the fire has left only the bare foundations in its wake.
“They have been in communication with us, showing considerable support,” mentioned Reyes to Reuters. She also highlighted unwelcome solicitations from property investors who contacted her inquiring about the potential sale of her land. “You can’t approach individuals in such a manner when they are grappling with devastation.”
The unfolding situation underscores the pressing challenges faced by individuals impacted by the recent spate of wildfires. As they navigate through the tumultuous aftermath, the complexities of insurance coverage and property rehabilitation loom large, shaping their immediate concerns and decisions.
(Reporting by Joe Brock and Chad Terhune; Additional reporting by Jonathan Allen; Editing by Mary Milliken and Sandra Maler)
