California’s wildfires are devastating the Los Angeles area, but insurance companies previously cut coverage in the state as a result of the increasing likelihood of paying billions in damages each year.
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00:00Those affected by the devastating wildfires in Los Angeles are also faced with another crisis.
00:05Insurance carriers have been fleeing the state of California in recent years,
00:08driven out by the increasingly costly weather events.
00:11Last year, State Farm, the state's largest insurer, announced it would drop coverage for 30,000 home insurance policies.
00:18That included about 70% of total policyholders in the Pacific Palisades neighborhood,
00:22which was hit particularly hard this week.
00:24And it's not the only company to do so.
00:27The CDI reports that 7 out of the 12 insurers with the biggest market shares have cut coverage in California since 2022.
00:34It's too soon to know the full cost of repair following fires in the L.A. area,
00:38which has already destroyed entire neighborhoods and killed at least 10.
00:41But as big insurers try to protect their profits from natural disasters,
00:45Southern California homeowners are left with inadequate or non-existent coverage.
00:49And with the ever-growing risks of climate change,
00:52it's only a matter of time until other states like Florida and Texas face similar events.