Calif fires - insurance losses not adding up

[Donald]

So State Farm is $6.7B and they are the largest. I know another is $1.7B. Add up the casualty loss from all the major players and it's $20B maybe stretch to $25B to $30B.

The fire loss was estimated at $100B.

So a huge uninsured loss. More than a few people without insurance who lost everything.

Then there is the society view. People say they love living in the woods up in the mountains or canyons. But also a recipe for a fire disaster as we saw. Especially as dense as they were built. What does society say, rebuild every tenth house. The rest, sorry.

Before places are uninhabitable they will be uninsurable.

 

[Mainia]

Concrete houses with metal design ascetics are the answer, and I would assume will be the only way to get any form of insurance in the future. We have proof, as this style all survived the fire.

 

[Donald]

If I ran an insurance company for fire prone homes I would send out inspectors yearly to inspect the home, gardens, shrubs, outbuilding, lawn, fields, trees.

And tell homeowners where things are not right and what needs to be changed if they want a renewal.

 

[SC Maintenance]

It was private property and hence a private problem.

Some were insured. The answer is clear. Anyone with a mortgage would presumably been insured, so the banks should be made whole assuming the insurer doesn't go under.

If it was uninsured then its a function of how much money they had - possibly many have enough money to rebuild. Others may have owned their home outright but are not wealthy, so now they either need to get a mortgage and rebuild, or sell the lot and move on.

Public property - schools, city buildings, etc - are likely the taxpayers problem.

As for the woods - forest fires are a natural event. You either cut and remove the underbrush, or have a forest fire every now and then. Your choice.

 

[BMWTurboDzl]

So State Farm is $6.7B and they are the largest. I know another is $1.7B. Add up the casualty loss from all the major players and it's $20B maybe stretch to $25B to $30B.

The fire loss was estimated at $100B.

So a huge uninsured loss. More than a few people without insurance who lost everything.

Then there is the society view. People say they love living in the woods up in the mountains or canyons. But also a recipe for a fire disaster as we saw. Especially as dense as they were built. What does society say, rebuild every tenth house. The rest, sorry.

Before places are uninhabitable they will be uninsurable.

I suspect underinsured is a bigger issue. As for rebuilding I haven't seen anything where the City of LA has updated their building code to account for fire resistance. In fact the mayor suspended the code requirement for all electric appliances.

 

[BMWTurboDzl]

If I ran an insurance company for fire prone homes I would send out inspectors yearly to inspect the home, gardens, shrubs, outbuilding, lawn, fields, trees.

And tell homeowners where things are not right and what needs to be changed if they want a renewal.

Insurers were aware of the risk. It's why State Farm stopped issuing new policies last year and placed California book of business under a separate legal entity in order to shield the parent company.

The wind was a big contributor to the fire. Embers getting blown hundreds of yards and starting fires on roofs and such.

 

[97prizm]

So State Farm is $6.7B and they are the largest. I know another is $1.7B. Add up the casualty loss from all the major players and it's $20B maybe stretch to $25B to $30B.

The fire loss was estimated at $100B.

So a huge uninsured loss. More than a few people without insurance who lost everything.

Then there is the society view. People say they love living in the woods up in the mountains or canyons. But also a recipe for a fire disaster as we saw. Especially as dense as they were built. What does society say, rebuild every tenth house. The rest, sorry.

Before places are uninhabitable they will be uninsurable.

This happened in Boulder Colorado many years ago. People want huge secluded housing that fire crews have a difficult time getting trucks and equipment to. Many of these people didn't take advantage of the FREE fire mitigation that the county and firefighters offered until their backyard was already on fire. I'd be curious to know how much could have been saved had people used fire mitigation on their homes.

 

[KGMtech]

man plans, God laughs.

 

[CKN]

So State Farm is $6.7B and they are the largest. I know another is $1.7B. Add up the casualty loss from all the major players and it's $20B maybe stretch to $25B to $30B.

The fire loss was estimated at $100B.

So a huge uninsured loss. More than a few people without insurance who lost everything.

Then there is the society view. People say they love living in the woods up in the mountains or canyons. But also a recipe for a fire disaster as we saw. Especially as dense as they were built. What does society say, rebuild every tenth house. The rest, sorry.

Before places are uninhabitable they will be uninsurable.

If you knew anything about California-the vast majority of the homes located in Pacific Palisades are not "in the mountains". As is the same situation in Alta Dena . Yes the mountains are not far away-but these sub divisions are normal cul-de-sacs and the such on normal streets. And yes-houses in the West where people want to live have a tendency to be packed a little closer together.

This thread is no different than posters telling others they should drive a pickup, etc., because I don't agree with your choice because it's only used for groceries. The state of California already has a "risk pool" for Earthquake insurance-it will be no different for fire insurance. What you don't mention (and probably don't know) is will the owners still have their old tax basis under proposition 13 as they had before?

 

[Donald]

It was private property and hence a private problem.

Some were insured. The answer is clear. Anyone with a mortgage would presumably been insured, so the banks should be made whole assuming the insurer doesn't go under.

If it was uninsured then its a function of how much money they had - possibly many have enough money to rebuild. Others may have owned their home outright but are not wealthy, so now they either need to get a mortgage and rebuild, or sell the lot and move on.

Public property - schools, city buildings, etc - are likely the taxpayers problem.

As for the woods - forest fires are a natural event. You either cut and remove the underbrush, or have a forest fire every now and then. Your choice.

Apparently with all the houses built they could no longer do controlled burns. That's a problem.

 

[Donald]

If you knew anything about California-the vast majority of the homes located in Pacific Palisades are not "in the mountains". As is the same situation in Alta Dena . Yes the mountains are not far away-but these sub divisions are normal cul-de-sacs and the such on normal streets. And yes-houses in the West where people want to live have a tendency to be packed a little closer together.

This thread is no different than posters telling others they should drive a pickup, etc., because I don't agree with your choice because it's only used for groceries. The state of California already has a "risk pool" for Earthquake insurance-it will be no different for fire insurance. What you don't mention (and probably don't know) is will the owners still have their old tax basis under proposition 13 as they had before?

Not saying anything needs to be done. Just pointing out there appears to be.a huge uninsured loss here maybe $50B. Some rich people can just write a check and build a new home. But probably most cannot.

On TV one family said they could not afford homeowners insurance. Unfortunately that person probably needs to move to where they can afford all the various pieces to housing expenses.

 

[Nessism1]

My house, in So Calif, is valued over $1M. But it's not the structure that holds the big value, it's the dirt. Point being, published stats about loss may be skewed; if looking at total property value vs just the structure value.

 

[SC Maintenance]

Apparently with all the houses built they could no longer do controlled burns. That's a problem.

I am sure there are many places where you cannot do a controlled burn. You manage things in other ways, like clearing the brush, or log and replant. Seems like an excuse not a reason.

On TV one family said they could not afford homeowners insurance. Unfortunately that person probably needs to move to where they can afford all the various pieces to housing expenses.

You either can afford to live there or can't. Can't afford insurance means you can't. There are plenty of places I can't afford to live. They should have moved long ago. I carry flood insurance. I know most of my neighbors do not. I truly hope we all never need to find out which do and which don't, but I am guessing we will at some point.

My house, in So Calif, is valued over $1M. But it's not the structure that holds the big value, it's the dirt. Point being, published stats about loss may be skewed; if looking at total property value vs just the structure value.

^^ This. Even here, where housing is pretty modestly priced, and identical brand new builder grade home can be double the price in one neighborhood vs another. I am sure its more expensive to build a house in California than here, but the build cost is xxx per square, and the rest is location.

 

[Nessism1]

Funny thing, even in places where dirt is cheap, the builders are cramming homes together into really small lots. I can only assume that a $300,000 new house, on a 5,000 sqft lot, sells faster than a $320,000 house on a 1/3 acre

 

[SC Maintenance]

Funny thing, even in places where dirt is cheap, the builders are cramming homes together into really small lots. I can only assume that a $300,000 new house, on a 5,000 sqft lot, sells faster than a $320,000 house on a 1/3 acre

That describes here. My neighbor is retired public works. He said they do it because its not just the land, its pulling utilities, building streets, etc - which the builder is responsible for until there turned over to the city/county. Every nickel.

 

[doitmyself]

California is a very complicated state with lots of challenges. The only judgement I can pass is that my former students that migrated into wildland fire fighting say that is one state they prefer not to get sent on work assignment.

 

[Zee09]

Insurance is the biggest cost these days...Homeowners, health, and now car insurance....crazy and often unaffordable by most..

 

[CKN]

My house, in So Calif, is valued over $1M. But it's not the structure that holds the big value, it's the dirt. Point being, published stats about loss may be skewed; if looking at total property value vs just the structure value.

This is why the wild fire areas (especially Pacific Palisades) will change for ever. There are many owners who bought before things there got very, very expensive. Like Torrance. I sold a house in Hawthorne, CA-not a very nice one 20 years ago for close to $300,000.00. That still not very nice home is now a million dollars.
If you are in your 70's-are you going to rebuild? OR-if someone offers you 2 or 3 million for the land are cashing out? It's a compelling thought to go live near your grandkids in Des Moines, pay cash for a townhouse-and use the reminder to live out the rest of your days.

We will see how long this thread lasts before the politics kick in. When Jimmy Carter passed away some on here couldn't help themselves and that thread was shut down in short order.

 

[Owen Lucas]

Many of these people didn't take advantage of the FREE fire mitigation that the county and firefighters offered until their backyard was already on fire. I'd be curious to know how much could have been saved had people used fire mitigation on their homes.

What fire mitigation was being offered? Cutting back vegetation, or some type of fire consulting?

I'd love to live in a wooded area away from other humans one day.

My thoughts are to have plenty of open land around the house with possibly some type of hardscaping to prevent fire from spreading onto the property. Dealing with falling embers is another issue, one can build a roof top sprinkler system but it better be reliable and self powered.

 

[AZjeff]

I am sure there are many places where you cannot do a controlled burn. You manage things in other ways, like clearing the brush, or log and replant. Seems like an excuse not a reason.

Here in central Az controlled burns are used far far away from any structures in case they lose control. There are crews who thin the woods by hand. It's unbelievable to me they can make much difference but they do it. They also have big machines that chew the brush and small trees into small sticks and mulch.